Industrial heart of Baltimore beats to a new rhythm; Canton: After seeing its industry die, the waterfront neighborhood on the city's east side is reborn as a sizzling residential and commercial real estate market.

THE BALTIMORE SUN

Two men climbed onto a hill of rocks near a half-sunken freighter on Canton's industrial waterfront one evening in 1978. Around them was a landscape of rotting piers, boarded-up factories, discarded mattresses and junked cars.

One saw the future home of a lumberyard. The other saw something more improbable.

"Don't put your lumberyard here," Mayor William Donald Schaefer told lumber business owner Louis J. Grasmick. "You should build real nice townhouses.

"This could be Baltimore's Gold Coast."

The Tin Coast would have been a more appropriate title, except that almost all of the area's once-thriving canneries, tin factories and fertilizer plants were closed and shrouded in weeds and barbed wire.

"He looked at me like I was just crazy," Schaefer said of Grasmick. "But he built the townhouses."

After two decades of boom and bust and boom again, the once-depressed blue-collar neighborhood of Canton has become one of the hottest real estate markets in the region, with its crumbling wharves and packing houses reborn as upscale apartments, marinas and high-tech offices.

In Baltimore, which has lost nearly one of every five residents since 1980, the story of how Canton has risen above the death of its industry to create computer jobs and boost its population by a third contains lessons about how parts of economically troubled cities can reinvent themselves under the right conditions.

But the ingredients for Canton's success might strike some as being as unlikely as the former mayor's vision of yacht piers springing up next to oil terminals.

Canton's rise can be attributed to its failures.

The neighborhood suffered through the demolition of 300 homes in 1968 for a superhighway that was never built. The death of the East-West Expressway, which would have connected the Jones Falls Expressway with Interstate 95, left a two-block-wide swath along the waterfront that turned out to be a rare opportunity for development in a densely packed city.

Canton had lost thousands of industrial jobs from the 1960s through the 1980s as its factories were hurt by foreign competition and increased mechanization.

But the plant closings allowed the city to rezone the entire waterfront from industrial to residential. And they removed pollution and heavy truck traffic that would have been incompatible with the development of apartments, shops and offices.

After an initial burst of development in the 1980s, builders late in that decade and the early 1990s were hampered by community activists and the recession.

But the defeat of plans to build a row of view-blocking, glass-and-steel high-rises along the water prevented the demolition of the American Can Co. complex, which is now the area's biggest retail draw. It also preserved the neighborhood's old-world character, which attracts wealthy residents.

Canton has also been fortunate to be isolated. Even after its factories closed, the neighborhood remained a stable, churchgoing, largely Polish-American community protected from crime and homelessness on three sides by the water, an industrial area and relatively affluent Fells Point.

Boom in modest houses

Over the past five years, Canton has experienced a real estate boom that has almost doubled annual home sales (from 174 in 1996 to 304 in 1999) and more than quadrupled building permits for renovations and construction (from 172 in 1995 to 706 in 1999), according to city records.

In a stock-market-driven era of prosperity when many Americans are demanding oversized houses, two-SUV garages and sprawling lawns, Canton's modest worker houses are multiplying in value despite their lack of parking, grass or trees.

The average price of a rowhouse in Canton has risen from $61,718 in 1996 to $101,331 in 1999. Home prices, 17 percent lower than the city average of $75,005 in 1996, jumped to 22 percent higher than the city average of $82,633 in 1999, according to sales data from Metropolitan Regional Information Systems Inc.

The population along Canton's waterfront has grown 36 percent since 1980, to 5,018, even as the city's has fallen by 20 percent, to 635,581.

The people flooding into Canton since 1995 tend to be in their 20s or 30s, single, from the suburbs and a few years out of college or graduate school. Others are parents in their 50s or older who want to flee suburbia after their children move away.

Amenities at a price

John Simmons, a 25-year-old television advertising manager from Atlanta, paid $222,000 last August for an 80-year-old rowhouse on Essex Street for which M & M Restoration Co. paid $20,000 in 1997. The company ripped out the inside of the vacant house and added a hot tub, hardwood floors, exposed-brick walls, a gas fireplace and a rooftop deck.

"I liked this area because real estate values are rising, there are a lot of young people, and it seems to be the part of the city where all the best night life is," said Simmons.

Many longtime residents say the success of the new bars and cafes is making Canton increasingly noisy and frustrating for parking.

Walter A. Jasinski, a former copper smelter who's lived in the same rowhouse on Elliott Street since his birth 84 years ago, remembers when O'Donnell Square held a market where shoppers could buy pigs' feet and live chickens.

Jasinski recalls the market as a bustling place where he'd go to breathe in the smells of Polish sausage, coconut cake and taffy.

The square today is the site of upscale restaurants such as Helen's Garden, a fashion boutique, a gourmet shop, Internet companies and a compact disc store.

The nearby industrial waterfront - which once had packing houses, coal barges, ships full of crude oil and bananas from South America - is now dominated by yachting centers, apartment complexes, restaurants, a health club, a sushi bar and high-tech offices.

"Back then, it was a financially poor class of people living in Canton, so everybody needed each other, and people stayed close to one another," said Jasinski, the son of Polish immigrants. "It was a very close-knit neighborhood.

"Now the people moving in have jobs that make a lot more money, and they don't feel the need to mess with people. They're not rich, but they have an attitude."

A name from China

The Canton now associated with night life and double-parked BMWs was long known as the industrial heart of Baltimore.

Canton was founded by Capt. John O'Donnell, an Irish-born merchant who landed in Baltimore in 1780 with a ship full of teas, silks and satins from the Orient, according to Norman S. Rukert's book "Historic Canton."

Using profits from the sale of his cargo, O'Donnell bought enough land to create a 1,981-acre plantation along the waterfront. He named it after the Chinese port where he bought many of his goods.

Canton was where shipbuilders made the frigate Constellation in 1797. Canton Iron Works, one of the largest factories in the nation in the 1850s and 1860s, forged armored plates for the warship Monitor, which the Union used to defeat the Confederate ship Merrimack.

In the late 19th and early 20th centuries, the waterfront was a sulfurous landscape of copper factories, oil refineries, breweries, canneries, oyster packing houses and fertilizer plants.

Polish, Irish and German immigrants lugged crates of vegetables off ships. Workers ground oyster shells to make chicken feed. Tugboats churned the water around coal piers. Trains rumbled down what is now Boston Street.

Changes bring slump

Canton's apex as an industrial powerhouse stretched from World War II until about 1958. Then dockworkers started losing their jobs when the shipping industry shifted from the manual unloading of cargo to vessels that used cranes to lift large containers directly onto flatbed trucks.

Also in the 1960s, families with young children began moving to the suburbs, leaving mostly grandparents on fixed incomes. Stores closed along the once-prosperous O'Donnell Square. Banks stopped making loans in the neighborhood.

Canton became known to some as "the white ghetto," according to Rukert's book. Despite their lack of wealth, residents boasted that their narrow streets between closely packed Formstone rowhouses were the cleanest in Baltimore.

In 1968, the city demolished about 300 rowhouses along Boston and Elliott streets to clear the way for a 16-lane waterfront highway, the East-West Expressway.

In 1969, a group of activists persuaded the state not to build the highway, because it would have blasted through not only Canton, but also Fells Point and the Inner Harbor - cutting off most of the city from its waterfront. Other cities, such as Boston and New Haven, Conn., have suffered from the paving of their scenic shorelines.

The alternative for Baltimore was the Fort McHenry Tunnel.

"The Battle of the Expressway, as I call it sometimes, saved the neighborhood," said one of the leading activists, Barbara A. Mikulski, now Maryland's junior U.S. senator, who launched her political career by opposing the highway. "If we had lost that fight, none of what we see today would be happening."

The reversal of the highway project left a long stretch of vacant land along the waterfront - an unusually large blank slate for development.

Vision inspired by Boston

The idea of converting this weedy strip into upscale housing came from Schaefer, who was inspired during a trip to Boston by condominiums he had seen that were built from waterfront warehouses.

When the Inner Harbor redevelopment was starting to transform downtown Baltimore in the late 1970s, Schaefer turned his attention eastward to a city-owned finger of land called Pier 6. For 27 years, the pier had held a lumberyard owned by Grasmick. Schaefer wanted to build a concert pavilion there.

The mayor told his friend that he had to move but that the city would help him find a new home for his business. Grasmick wanted to move his lumberyard a half-mile east to Boston Street in Canton. But Schaefer had a more grandiose vision for the trash-strewn waterfront.

Grasmick recalled his conversation with Schaefer: "He told me to build housing there. He didn't ask me - he told me. ... I had never built anything before. But that's the way Schaefer was. He really challenged people."

Grasmick moved his lumber company several miles east to 6715 Quad Ave., underneath an elevated section of I-95. Working with builders Frank Favazza & Sons, he developed the first 40 waterfront homes in Canton and built several hundred boating piers. They finished Anchorage Townhouses in 1982.

It was a tough battle trying to win approvals from the neighborhood and city, state and federal governments for his project, Grasmick said. The National Oceanic and Atmospheric Administration opposed the construction, saying the project would destroy a potentially important breeding ground for blue crabs.

"I couldn't believe it. They said even the crabs stood in our way," said Grasmick.

New developments follow

Other developers were encouraged by Grasmick's ability to sell his townhouses for more than $150,000 per unit when most Canton townhouses were selling for $30,000.

A few blocks east on Boston Street, developer C. William Struever was driving one day and saw a rusty "For Sale" sign on the wall of the long-closed Tin Decorating Co. factory.

From 1914 until the plant closed in 1965, as many as 3,000 employees worked there making elaborately decorated tobacco tins, aspirin containers, Sterno cans and, during World War II, clips for machine guns. The tin container business eventually was killed by the plastics industry.

"By the 1980s, the waterfront was decrepit," said Struever. "It was like the movie set for an Arnold Schwarzenegger film about urban decay. But we walked up onto the roof of the Tin Decorating plant and saw the sun setting over the harbor and thought, 'This is the coolest place.' And so we turned around and got an option to buy it the next day."

From 1984 to 1986, Struever's firm, Struever Brothers Eccles and Rouse, converted the dilapidated buildings into Tindeco Wharf, with 240 apartments, a health club and heated pool.

It was difficult working with buildings that had been closed for decades, Struever said. To help customers imagine living in a rundown factory, Struever built penthouse demonstration units with breathtaking views of the harbor.

But he forgot to fix the roof first, and when it rained, water poured through the building, destroying the model apartments. After that, the $34 million project went well. Today the apartments rent for $900 to $1,850 a month.

"Young people love being in these wonderful old buildings in a neighborhood where they don't have to drive to get to work," Struever said.

Not 'affordable'

From 1986 to 1988, Theo Rodgers, founder of A & R Development Corp., built the $18 million, 166-townhouse Canton Square project on 7 acres that had been cleared along Boston Street for the canceled highway project.

"We ran into some opposition from the neighbors, who thought the new houses would be affordable and available to the children of those displaced by the road project," said Rodgers.

"But Schaefer said, 'We don't want affordable housing. I want you to build the most expensive housing we can have in the city, because we need taxes and these kinds of professionals in the city.'"

Rodgers was shocked to find so few families interested in his houses. Only two school-age children moved into the 166 townhouses.

Neighborhood groups played an important role in killing three huge high-rise projects in the late 1980s that would have destroyed Canton's small-town feel, according to City Counciman John L. Cain.

The recession also hit the city hard, helping to defeat plans to create gaudy towers that would have separated the community from the water.

Canceled projects included a proposal to level the American Can Co. factory on Boston Street and replace it with two 27-story towers; a dense row of nine-story condominiums proposed at the 2200 block of Boston St.; and a 23-story glass tower next to Tindeco Wharf.

Proposal shouted down

On a July night in 1987, at least 200 people packed into the basement room of St. Casimir's Catholic Church to see developer Michael Swerdlow unfurl drawings of a glass-and-steel high-rise behemoth called American Plaza.

"He never knew what hit him," said Cain, who remembers the uproar against the proposal as a turning point for Canton. "Here was this out-of-town guy telling the people he was going to replace the Can Company with a modern high-rise building that didn't look like anything else in Canton. ... He got shouted down."

The meeting helped motivate local residents to form the Waterfront Coalition, a band of 10 to 15 activists who played a key role in limiting high-rise development in Canton.

Though not always successful, the group fights to keep new buildings from rising higher than four stories, limit the density of new housing, and ensure that architecture has a look similar to the buildings found in the area.

When the city dropped Swerdlow's plans for the American Can Co. site, the activists worked with architects to develop plans to preserve most of the historic buildings there.

Listen to community

"They fought the good fight. They [the activists] made the city and the developers take notice that down here you better listen to what the community wants," said state Sen. Perry Sfikas, a city councilman during the 1980s. "In the end both sides bent a little. It's a nice model of cooperation for the city."

Development along the waterfront almost died out from the late 1980s until the mid-1990s.

In August 1996, Safeway built a $9 million, 35,000-square-foot supermarket on a 5-acre lot created by the demolition of a warehouse on Boston Street.Struever completed his $27 million renovation of the 1913 American Can Co. factory in 1998, transforming it into an office and retail complex with 10 stores including a Bibelot bookstore and coffee shop, the Atlantic Restaurant, Austin Grill, Brocato's Studio of Hair Design and a Crestar Bank branch.

Next wave

The Safeway and Can Company projects sparked a new wave of development.

This second phase has centered around not high-rise towers, but expensive renovations of the rowhouses of dockworkers. The city has granted contractors 1,855 permits to renovate homes and build in Canton since 1996, according to city records.

From 1995 to 1999, Dr. Selven Passen, a retired pathologist who became a developer, built 250 boat slips, a 200-boat storage warehouse and a strip of shops in his Lighthouse Point complex at 2701 Boston St.

By this summer, he plans to open a waterfront restaurant for the Bo Brooks crab house, a yacht dealership and 80 apartments.

Although the plans are in early phases, Passen said he also hopes to build 125 to 150 waterfront apartments, a marina for up to 85 boats and another waterfront restaurant on 3 acres of vacant land at 2301 Boston St., across from the Gin Mill.

In front of the Can Company complex on Boston Street in September, Struever plans to build a 10,000-square-foot, contemporary-looking, wing-shaped retail building that will hold a health club or retail stores.

Struever also recently signed a contract to buy the long-closed National brewery at O'Donnell and Conkling streets. He is looking into converting it into apartments and high-tech offices.

"It's a different world," said Passen. "The U.S. has become a service economy. It is not an industrial economy anymore. That's why you're seeing all this change in Canton."

Reason to be proud

Today, when Grasmick drives past the apartments and cafes where there were once only weeds and rotting warehouses, he appreciates Schaefer's formula for transforming tin into gold.

"When we stood on those rocks, and he [Schaefer] said, 'Housing goes here,' I couldn't believe it," Grasmick said.

"Because absolutely no one up to that point had thought of building apartments in that rundown area."

"But he said it, and he believed it," Grasmick said. "And now I can't help but be proud of what this old city has done."

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