A hotel and office skyscraper planned for one of the last prime undeveloped parcels at the Inner Harbor is on indefinite hold, a victim of the recession, the project's developer said.
But UrbanAmerica, the developer and owner of the parking lot near Harborplace at 300 E. Pratt St., still intends to build the tower once the economy shows signs of recovery.
That's according to Richmond S. McCoy, president and chief executive of the New York-based real estate private equity firm that had hoped to have construction of one of the city's largest skyscrapers under way by now. It initially called for condos priced at $720,000 and up.
"At the very least, we need to see a stop in job loss for a couple of quarters, perhaps that would bring some stability back to the economy, and the major financial institutions need to get underpinnings," McCoy said. "Until that happens, we certainly won't be moving forward with any project there."
Commercial development in Baltimore and elsewhere has slowed amid the credit crunch, with many developers abandoning or scaling back plans. The slump is expected to keep the commercial real estate market depressed this year, according to a forecast released yesterday by the National Association of Realtors.
Another proposed mixed-use tower at the Inner Harbor, slated for a parking lot at 414 Light St., has also faced delays. In 2006, Philadelphia-based developer ARCWheeler proposed a 59-story skyscraper housing a hotel, condos, loft homes, offices and shops between the Hyatt Regency and InterContinental Harbor Court hotels. It's the former site of a McCormick & Co. spice factory.
Yesterday, an ARCWheeler partner said a revised design calls for minimal residential units but still includes up to 500,000 square feet of office space, a 250-room hotel and ground floor retail. Contracting with a signature tenant is taking longer than anticipated, said John Voneiff, the partner.
"Things remain on hold in anticipation of" that, Voneiff said in an e-mail. He said pre-construction work is continuing.
UrbanAmerica's Pratt Street site, which has been vacant since 1990 and once housed the News American building, was acquired in August 2006 for $28 million in a partnership with Baltimore developer Doracon LLC. At that time, the partners planned a $250 million project with 300 condos; a 250-room, five-star hotel; and 40,000 square feet of shops and restaurants.
About a year ago, the owners revised the design and mix of uses, scaling it back from 800,000 square feet and 50 stories to 600,000 square feet and 40 stories. They also abandoned the idea of condos amid the housing slump. Revised plans call for a 270-room hotel and about 300,000 square feet of office space and street-level shops.
The owners have been operating the site between South and Commerce streets as a parking lot.
When it comes time to court tenants, "We would start all over," McCoy said. "We're in an era many of us haven't seen in a generation in terms of people's ability to see forward where their business is going."
A city official said yesterday that he would not expect any large, speculative development to proceed in the current economy.
But "my sense is Baltimore is better positioned than a lot of places to withstand the recession and come out with some positive results," said Thomas J. Stosur, acting director of the city's Department of Planning. "We may be able to have some projects move forward that others will not, because of the proximity to Washington, D.C.," and because the area's housing market has not suffered as badly as other parts of the country.
One large, mixed-use project in Locust Point, anchored by a Harris Teeter supermarket, came to a halt after construction financing fell through. But work is set to resume next week, the developer said yesterday.
Developer Mark Sapperstein said he was able to get construction financing because he had signed several tenants for the project. He expects a January opening for a 65,000-square-foot office building, which is now half-leased, and a July or August 2010 opening for the 250 apartments and retail, including Harris Teeter, two banks and a Greene Turtle restaurant.
"Even with the market the way it is, we've had a tremendous amount of interest," he said.
Despite the challenges of financing and attracting tenants, UrbanAmerica finds itself in a comfortable position to ride out the turmoil, McCoy said.
The company, which has not sought a construction loan for the hotel-office project, given its early stage, has no construction debt on the Pratt Street land but does have income from the parking lot, McCoy said. Still, he believes the tower eventually will be built there.
"I can't imagine what else would really work there," he said. "It's such a fine site. It certainly deserves a maximum use of the site and the views and the waterfront location."