Baltimore may not have a more successful risk-taker than John Paterakis Sr. After taking over the family bakery following his father’s death, he started investing in equipment to automate the process of churning out breads, muffins and rolls, building a small empire as other mom-and-pop bakeries went under. In the 1960s, he poured money into equipment to make buns for McDonald’s before he had a contract to bake the first one. His lawyer at the time thought it was financial suicide. Now just one of his company’s plants churns out as many as 2 million McDonald’s buns in a day.
But it was a favor Mr. Paterakis did for his friend William Donald Schaefer that represents his biggest risk, biggest reward and defining legacy in the city where he was born. Concerned after a development plan for a large swath of land at the foot of President Street fell through, the then-mayor persuaded Mr. Paterakis to buy what he hoped would serve as a connection between the Inner Harbor and Fells Point. Mr. Paterakis had no intention to develop it — Mr. Schaefer had promised to buy it back but reneged. So Mr. Paterakis embarked on the gutsiest real estate move Baltimore had seen in generations.
Today, with Harbor East firmly established as Baltimore’s glitziest neighborhood, with more development rising to the east and beyond-audacious plans under consideration in Port Covington, it may be hard to recall what a spectacularly bad business move it seemed Mr. Paterakis was making at the time. To be sure, he benefited from substantial tax breaks, but he also put his own money into his projects in a way developers simply do not do. At various points he was personally on the hook for tens if not hundreds of millions of dollars if things didn’t work out. But they did.
“There were a number of people who told him to send his money elsewhere. They thought the momentum for harbor development had stopped,” said University of Baltimore President Kurt L. Schmoke, who was mayor when Mr. Paterakis began developing Harbor East. “He had the foresight to believe it was going to continue.”