Oriole Park forced fish firm to move

DIAMOND CUT INTO BUSINESS

July 16, 1994|By Patricia Horn | Patricia Horn,Sun Staff Writer

When Robert C. Millhauser thinks of Camden Yards he doesn't think of the romance of a grassy diamond and a summer night. He thinks of the day he watched the home of his family's seafood business blow up -- a day, he remembers, he got sick.

For Mr. Millhauser, that explosion in 1989 foreshadowed many of the troubles that led the Southern Seafood Co., one of the region's premier seafood distributors, to seek Chapter 11 bankruptcy protection last week.

The construction of Oriole Park at Camden Yards was bad timing for Southern. The company's forced move from its 400 block of Eutaw Street warehouse -- now the site of Jeffrey Hammonds in right field -- to a more expensive location on Reisterstown Road came just as the recession started, just as the company was buying out another family member, and just as changes in the industry cut into its business.

Bit by bit, the combination pushed Southern into bankruptcy court.

"It's like a chemistry experiment where you have a test tube of blue liquid, then you add another liquid drop by drop, then another drop, and suddenly it's completely clear. It has been a slowly emerging trend over the last two years, with cash flow shrinking bit by bit. Then it became an insurmount able problem," said Mr. Millhauser, 55, sitting in his office at Jessup's Maryland Wholesale Seafood Market.

Customers can still buy their frozen fish from Southern Seafood's four retail stores in Baltimore, Towson, Dundalk and Catonsville. For now, the bankruptcy filing has allowed the company to obtain the operating cash it has needed to pay employees and restock inventory.

Like other businesses that file for Chapter 11 bankruptcy protection, Southern Seafood is hoping to reduce its debt payments and regain its business footing. The company also hopes to become again a powerhouse in the Baltimore-Washington seafood industry.

Almost from the start, Southern Seafood -- originally Southern Seafood Cash & Carry -- has specialized in frozen fish. Even today, despite the trend among restaurants and customers toward fresh fish, Southern has remained the local giant in frozen fish. It offers 150 types of seafood from $20 per pound lobster tails to $1 per pound whiting. The company buys whiting from Argentina, orange roughy from New Zealand, and flounder from Northern Europe.

"They were a quiet giant in the business," said William E. Isaac, known in the business as Billy Martin, of Martin Seafood Co. "They did things years ago when I was just getting started in the business that no one else was doing."

Like many other seafood distribu tors, the company is a family busi ness. Founded in 1922 by Robert Millhauser's uncle -- David Millhauser, then a Baltimore American reporter -- the company gained a reputation as an innovator for trading frozen fish globally and as one of the first wholesalers to sell directly to fancy restaurants, hotels and individuals.

Southern Seafood's troubles started in the late 1980s. In 1988, Robert's cousin Richard, son of founder David, retired from the business and Southern Seafood bought him out. "We knew we had to take out debt for that," Robert Millhauser said.

Mr. Millhauser and Southern had planned on that debt, but not the debt to buy a new facility. The Maryland Stadium Authority paid Southern $1.9 million for the Eutaw Street property and just under $79,000 in moving expenses, according to the Authority. But only half the $1.9 million stayed with Southern because the rest belonged to his cousin's family, Mr. Millhauser said.

That meant taking on more debt to purchase the Reisterstown Road facility, which cost about $1.5 million, he said. After that move, the company's operating costs climbed 50 percent because of debt, higher utility bills and other costs.

Southern has moved once before for an urban renewal project -- in 1976 -- and that experience prompted both Richard and Robert to protest the company's dislocation from Camden Yards. In a March 25, 1987, letter to The Sun, the Millhausers wrote that "Our present location is irreplaceable. During December over 3,200 retail consumers came to our warehouse on Eutaw Street. Free on-site parking is available. We would lose all of this business."

They were right. "Relocating because of Camden Yards turned out to be a lot more damaging than we expected it to be," Robert Millhauser said.

Despite what most Baltimoreans thought of the old warehouses lining Camden Yards, for Southern and other businesses, the location near the interstate freeways couldn't be beat. And Southern's retail store there was the company's cash cow. According to Mr. Millhauser, that old crusty-looking warehouse store sold more frozen seafood than its current four retail stores combined.

Then the recession hit. Southern's sales volume and margins dropped at the same time its operating costs grew, and the Wal-Marts of seafood, as Mr. Millhauser refers to them, moved in on Southern's turf.

In general, seafood is just not as profitable as it used to be, said Peter C. Redmayne, publisher of Seafood Leader and Simply Seafood. At the Jessup market, three other distributors have folded over the past several years, while others are barely surviving, according to merchants.

Since the late 1980s, Southern's sales volume has fallen from about $17 million to about $10 million, Mr. Millhauser said. In its bankruptcy filing, Southern listed assets of $1.8 million and liabilities of $2 million.

Robert Millhauser does hope to hang on. Despite its cash flow problems, he said the business was still profitable. And the company cut costs by selling off a portion of its Reisterstown building last year. "I'm looking forward, not looking back. I'm focusing on what I need to do for the future," he said.

Yet, despite being a fan, Mr. Millhauser has never set foot in Camden Yards. "I don't want to be in a place I can't enjoy. What is the point in my going?" he asked.

lTC

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