Homes vs. industry on the waterfront

12.14.2003

The Baltimore Sun

Face of shore property may be in for change.

Baltimore is embroiled in a waterfront battle.

Maritime companies whose livelihoods depend on being near the harbor to ship products in or out want to see most of the city's prime waterfront property remain industrially zoned.

Developers are much more interested in building luxury homes, offices, hotels and retail with a beautiful view - and they're inching farther and farther away from the Inner Harbor, into the aged industrial strongholds.

The city's economic future is likely to be shaped to an important extent by what happens to its 45 miles of shoreline property. From Miami to Boston, cities have used their extensive waterfronts to jump-start renewal and job growth.

In Baltimore, city leaders agree, the successful revitalization of the Inner Harbor has sparked a renaissance. Now they have to decide how far that nontraditional use of scenic property should spread.

Some cast the debate as a struggle over the city's soul: blue- collar jobs vs. white-collar work and gracious living - the industrial port vs. the Digital Harbor.

"You have this encroachment of gentrification," said Tom Koch, a Maryland port commissioner and president of Curtis Engine & Equipment. "We have to be very careful that we don't work ourselves into a corner, where we have a lot of townhouses right up to the water's edge and we have a second-class port."

Developers think the conversion is inevitable and beneficial, and call attempts to stop it misguided.

"Baltimore's changed," said Edwin F. Hale Sr., a banker and real estate entrepreneur who once owned a maritime trucking company. "The industrial component is going to go away from here, from the waterfront. ... The land values are going up. The highest and best use is not for small marine terminals anymore; it's for offices and condos."

Many port cities are struggling with the issue because port and city leaders usually have different ideas about how waterfronts should be used. Only rarely have they worked together on a vision.

"When you have a port, you have the push-pull," said Ann Breen, co-director of the Waterfront Center, a Washington nonprofit that studies waterfront development.

No agency has a master plan to manage Baltimore's extensive shoreline. Officials are trying to look at the big picture, with efforts ranging from an anticipated report on waterfront land use pressures to comprehensive rezoning. A state task force will begin weighing in on port development next month.

"The Ehrlich administration has grave concerns about the overall trend," said Robert L. Flanagan, state secretary of transportation. "We need to ... make Baltimore City more aware of the value of preserving port property. I'm afraid that the vision of leaders in Baltimore City has been blurred by developers' dollars."

The almost-300-year-old port of Baltimore directly accounts for 15,700 jobs - private and public - and helps support about 17,000 additional jobs through local purchases made by those employers and employees, according to the state Department of Transportation. Maritime activities generate more than $200 million in state and local taxes.

The Maryland Port Administration says that fewer ships slide into the harbor nowadays but that they're bigger and carry more freight. Last year it was the third-busiest auto-import port in the nation, according to the American Association of Port Authorities.

"I think the port of Baltimore is doing better than it ever was," said Richard L. Sheckells Jr., the state agency's director of planning. "The public terminals hit an all-time high of over 7 million tons of general cargo this year."

As business expands, so does the need for more land abutting deep water to hold the automobiles, paper and other products shipped in. Most maritime operations must sit beside or near watery depths of 30 to 50 feet.

A report prepared for the state's Port Land Use Development Advisory Council two years ago said the Port Administration expected to need about 130 acres over the decade to expand its terminals. Several private operators said they would require 285 extra acres over the same period.

Several terminals sit in Anne Arundel and Baltimore counties, but most of the activity is in the city, particularly Canton and Locust Point.

Those two communities are also hot areas for redevelopment.

Townhouses are popping up on the Canton waterfront, and Hale's Canton Crossing development has brought offices, a bank and an athletic club to Clinton Street, an area dominated by hulking ships and storage facilities. Construction on Hale's site, a former Exxon refinery, will include offices, hotels, condos, shops and marina slips.

Locust Point has Tide Point, a factory-turned-office-campus that sits in the shadow of Domino Sugar. A developer who bought a nearby grain terminal this year wants to rezone the land for townhouses, condos, offices and a hotel.

The Tide Point land sat unused for several years after Procter & Gamble left in 1995, one of the examples developers point to in arguing that adapting vacant industrial buildings brings significant benefits to the city in tax dollars and vitality.

Clearly, there is demand for new uses. At North Shore at Canton, an 82-unit townhouse development on Boston Street, prices range from almost $400,000 to more than $1 million. The final buildings won't be finished until spring, but the Cignal Corp. project sold out in September.

Cignal announced last week that it's planning to build another waterfront townhouse development on Boston Street, not far from Canton Crossing.

Peter Fillat, a Baltimore architect best known for his work along the waterfront, would like to see the Port Administration "liberating" its land in the city and moving closer to the Chesapeake Bay. He sees empty waterfront spaces, reminders of industry that went elsewhere, and wonders whether the city is ideal for modern maritime operations.

"Why not take advantage of what we can be instead of being nostalgic?" said Fillat, whose office is half a block from the water. "It's just a natural to see it be changed from what it was ... into another source of jobs and industry, the industry of living and working in offices and shopping."

C. William Struever, whose development company Struever Bros. Eccles & Rouse Inc. handled Tide Point, doesn't advocate a complete makeover but wonders whether industrial businesses are a good fit in north Locust Point, cheek-to-cheek with the community's rowhouses.

Across the city line

Developers point out that hundreds of acres of unused industrial land owned by Bethlehem Steel's successor is available at Sparrows Point in Baltimore County. County planners see it as an excellent place for port businesses, with pockets of deep-water access in a historically industrial area.

Some in the maritime industry say partial relocation is worth considering. "Maybe we should just retreat from Locust Point," said Koch, the port commissioner.

Others - including George "Bud" Nixon Jr., chairman of the Private Sector Port Coalition - say developers are suggesting an inadequate replacement for sites that have expensive infrastructure.

Nixon, who is on the board of directors of Rukert Terminals Corp., a 125-acre site in Canton, thinks planning is the answer, not moving.

Redevelopment in Fells Point makes sense to him because the water there isn't deep enough and the piers aren't long enough for modern ships. But Canton, Locust Point and Port Covington to the east are prime locations for maritime uses, he said.

It's a sore point among the maritime crowd that a Wal-Mart and Sam's Club were built at the water's edge in Port Covington last year.

"We need to divide areas that can be developed for adaptive reuse and areas that are set aside for deep-water marine use," Nixon said.

John Mitchell, manager for Westway Terminal Co.'s Baltimore location on Hull Street in Locust Point, has fielded calls from office tenants at adjacent Tide Point about noises and smells. The company processes raw molasses into liquid animal feed.

He's not eager to see residents occupying the former Archer Daniels Midland Co. grain elevator, also next door.

"`Condo creep' is what we call it," Mitchell said. "You don't want an industrial operation right next to a house. I'm a 24-hour facility."

Mark Sapperstein, one of the principals of Silo Point LLC, which bought the 15-acre grain site, said it's not suited for industrial use anymore.

His company intends to remake it into hotel rooms with offices or condos above. Townhouses would be built on the vacant land.

Standing on the roof recently, the city spread out below, Sapperstein said he thinks the industrial backdrop with its ships and tugboats is beautiful.

"What you have is moving art," he said.

Patrick Turner, who's developing the site with Sapperstein, argues that the conversion they have in mind will clearly benefit the city. The real estate and personal property taxes are $150,000 a year now, but redevelopment would push the real estate taxes alone up to $5.5 million, he said.

M.J. "Jay" Brodie, president of the quasi-public Baltimore Development Corp., said city leaders have handled each waterfront proposal outside the Inner Harbor individually, without a big- picture guide.

"We'd like to move beyond that," he said.

The Baltimore Development Corp. and the city planning department expect to release a consultant's report on waterfront land pressures by the end of the month, looking for public comment before they offer recommendations on the best mix of revitalization and industrialization.

Not `either-or'

"We're very cognizant of the importance of the port and the folks who relate to the port ... but we also see the potential from an economic development perspective of a change that could produce something like a Tide Point," Brodie said. "We don't see this as an either-or question."

City planners are embarking on the first comprehensive rezoning in Baltimore since 1971, with the waterfront a key area for review.

Otis Rolley III, Baltimore's new planning director, said his department will assess where the traditional waterfront industry is strong and where it's shrinking, "and start making realistic plans for the future."

The city is in an enviable position because nearly any waterfront development can be good for Baltimore, said Joe Cronyn, a partner at the Columbia real-estate consulting firm Lipman Frizzell & Mitchell LLC.

Cronyn said planning is crucial because a bad mix means conflicts, whether it's sailboats crossing major shipping lanes or warehouses surrounded by townhouses. And once industrial land is rezoned, especially for homes, it's not likely to go back.

"It's a hard choice because in a lot of ways it's a choice that can't be reversed," Cronyn said. "The stakes are high."