A zoning law that protects the city's industrial waterfront from becoming overrun by housing, shops and restaurants could be significantly watered down under a proposal from Mayor Sheila Dixon's administration.

The legislation, which is pending in the City Council, would make it easier for maritime businesses to sell their desirable real estate to developers for other uses beginning in 2014.

Allowing more encroachment into industrial zones could cripple the traditional engine of the city's economy, some argue. But others say that as manufacturing jobs dry up, Baltimore must avoid getting stuck with abandoned industrial property that cannot be redeveloped.

The bill could tip the balance in an uneasy coexistence that has developed between new homes and old businesses, and help determine the character of the harbor for years to come.

"I'm happy that the conversation is occurring because the discussion needs to be had," said Stuart FitzGibbon, refinery manager at American Sugar Refining Inc., which owns the Domino Sugars plant. "Nobody wants to hear tractor-trailers rumbling down their street at 2 o'clock in the morning."

Baltimore enacted the special maritime zoning district along the waterfront in 2004 to prohibit development in large swaths of the harbor, from Curtis Bay to the Canton Industrial Area. The stricter regulations - which are set to expire in 2014 - forbid new hotels, offices and homes on certain properties.

The regulations, city officials said at the time, would help preserve city-based manufacturing jobs by relieving the pressure on industrial businesses to sell their property to developers. Those properties can fetch large sums from developers competing for views of the water.

FitzGibbon - who opposes allowing property to opt out of the regulations - said the zoning rules act as an important buffer between residential and industrial properties. When homes get too close to industry, he said, residents often discover that they don't want to live with the noise, smells and truck traffic associated with those businesses.

The administration's proposal would extend the maritime overlay by a decade to 2024 - a provision that city officials promoted - but it would also allow businesses to opt out of the regulations beginning in 2014. To opt out would require approval from the City Council, and requests for an exemption would be considered on a case-by-case basis.

Sterling Clifford, a spokesman for the mayor, said the new provision gives more flexibility to property owners and that it was a key compromise to persuade all stakeholders to agree to extend the life of the zoning district.

"The port continues to be an economic engine for the city," Clifford said. "It will be into the foreseeable future, and we are interested in protecting industrial, port-related businesses."

As president of the City Council, Dixon supported the original legislation to create the district in 2004.

City Councilwoman Rochelle "Rikki" Spector, who also sits on the city's Planning Commission, noted that the bill does not automatically allow businesses to opt out, only that it creates a procedure that allows them to make their pitch to the council.

"You need to give property owners a right to challenge their zoning," Spector said. "This would be that window of opportunity."

But if approved, the change would be a break with the previous mayoral administration of Martin O'Malley, which did not allow exceptions. In 2006, owners of Little Havana, a Key Highway restaurant, sought an exemption to the law to move into a property they had purchased just inside the protected area. The city balked. The restaurant's owners, who purchased the property about the same time the regulation was enacted, are still fighting the city.

A spokesman for the Maryland Port Administration - which supports the zoning district, often referred to as the MIZOD - said that the agency is looking forward to working with the city on the proposal but that it does not support an opt-out provision.

"The MPA feels the city should not focus on opting out but should focus solely on extending the MIZOD," said the spokesman, Richard Scher. "The focus should be on maintaining the MIZOD boundaries and granting the extension."

The legislation is expected to receive a hearing from the council's land-use committee this year. The committee is chaired by the council's vice president, Edward L. Reisinger, whose district includes much of the city's waterfront. Reisinger said he also is wary of the escape clause.

Councilman Robert W. Curran, who worked for years at the sugar plant, said keeping the current zoning requirements intact is important for the city's long-term economic health.

"It's very important, these manufacturing jobs," Curran said. "I know these jobs are important, and I want to do everything I can to have the administration keep these jobs here."

john.fritze@baltsun.com