The Harry and Jeanette Weinberg Foundation is proposing to invest $71 million to rebuild a beleaguered downtown landmark -- its decaying Stewart's department store on Howard Street -- while building an adjoining middle-income apartment complex and parking garage on Lexington Street.
The foundation has unveiled a plan to remake the Stewart's building, an 1899 department store that closed in 1979, into a call center, a building outfitted with telephone lines for private mail-order catalog sales, credit card account assistance and telemarketers.
The building could employ 1,500 to 2,000 people at hourly wages of about $7 to $14.
The project would be the largest private initiative to clean up and revive downtown's west side, between Charles Center and the University of Maryland's downtown campus.
While local merchants are balking at the proposal, it appears to have the support of city officials, who introduced a bill in the City Council on Dec. 7 to condemn and take a number of privately held businesses -- including the Stewart's building -- along with those on the north side of Lexington Street between Howard and Liberty streets, a stretch of clothing stores, jewelers, wig shops and electronic gadget outlets.
M. Jay Brodie, president of the Baltimore Development Corp., the city's economic development agency, said $7 million in public funds will be needed for the project. "This is a superb leverage ratio," Brodie said.
The apartment component of the project would have 174 units and ground-floor retail shops, east of the Stewart's building on Lexington Street; the garage, at Liberty and Lexington streets, could handle 550 cars.
The estimated $71.7 million price tag includes $31 million for the Stewart's building renovation, $27.5 million for the apartments, and $13.2 million for the garage.
Some property owners who could lose their locations are protesting the condemnation.
Owner opposes plan
One is Nam George Koo, 51, the largest private real estate owner -- other than the Weinberg Foundation -- on the targeted block of Lexington Street. His nine-store chain, New York Fashion, has its headquarters here, and the former New Theatre on Park Avenue is the chain's warehouse.
"I wouldn't oppose the plan if they wanted to put an art museum or an old people's home here, but they're tearing me down so other merchants can come here," said Koo. "Everything downtown is controlled by two people -- Peter Angelos and the Weinberg Foundation."
Harry Weinberg purchased the Stewart's department store property 19 years ago as the store was closing. Only its ground floor has been rented.
Weinberg, who invested in downtown real estate, died in 1990. The real estate investor often said he "had a good feeling about the corner of Howard and Lexington," but refused to pour money into that or the string of aged retailing buildings he acquired over the years.
"Harry Weinberg was a tough businessman, a very unique individual. He didn't believe in giving money to art and culture," said state Comptroller-elect William Donald Schaefer, a former governor and Baltimore mayor. "He left a billion dollars, but he never had the joy of seeing what his money could do."
The Weinberg Foundation today has extensive real estate holdings on the west side of downtown, including the former Hochschild Kohn warehouse at Centre Street and Park Avenue, which now houses the Aegon USA insurance company.
The foundation, one of the area's largest property owners with assets estimated at $1.2 billion, is tied with the Annie E. Casey Foundation as the state's largest foundation.
Bernard Siegel, the foundation's president, said Weinberg demonstrated sound business judgment by sitting on his property. "It was evident to Harry Weinberg 19 years ago as it is to us today, with the benefit of hindsight, that investment of a single owner in the middle of a wasteland would be money thrown away," he said.
"Even the current effort anticipates massive infusions of capital by many private developers, as well as the University of Maryland. It will have little chance of success without the investment and cooperation of the city and state. For the first time, right now, it seems that all the stars are in the proper alignment."
Said Joel Winegarden, the foundation's real estate head, "We see this as a very large risk, but the concept needs to be sold."
The foundation underwrote the costs of the Westside Master Plan, a document released in June that outlines the ambitious development. "The intention of the foundation is not to develop the whole area. We're hoping that other people see the opportunity of the place," said foundation staff member David Stein.
C. William Struever, a principal of the Struever Brothers, Eccles and Rouse construction company, toured the Stewart's building several times before estimating the rehabilitation costs. "It's a great building, structurally sound, with a good floor plate," he said, referring to the uncluttered interior.
The 1899-1900 Stewart's building, constructed by local merchant Samuel Posner, is considered one of Howard Street's major landmarks. Designed by Baltimore architect Charles E. Cassell, it is six stories with Italian Renaissance Revival facades facing Howard and Lexington streets.
The proposal to renovate it and topple surrounding properties would have to pass a number of hurdles -- most notably from merchants -- before it could begin.
"We are making an offer [for the two-block site]. It would have to be opened to other developers, too," Winegarden said.
Scott Mun, 32, owner of the Wig House in the 100 block of W. Lexington St., echoed the sentiments of many merchants when he questioned the proposal's merits and the exclusion of most area business owners. "I wasn't given any input into the plan," he said.
Pub Date: 12/20/98