State a warehouse capital, but Baltimore goes begging

Economy

October 02, 1995|By Jay Hancock

If Nebraska is the nation's breadbasket, Maryland is turning into its storage closet.

Dozens of companies are building warehouses from Aberdeen to Landover for staplers, snacks, suits, stereos, magazines, toys, stationery, T-shirts and most anything else you can think of.

Merchants have rediscovered what investors figured out 168 years ago when they chartered the Baltimore & Ohio, the nation's first (some say second) railroad: Maryland is close to everything.

Starting here, an 18-wheeler can reach a third of the country's people, stores and factories with an overnight run. At Maryland's center is one of the world's great ports. Its spine is one of the world's great roads.

What better place to store, sort and ship goods? Saks Fifth Avenue, McCormick, Clark Group, Time Warner, Pier I, Clorox, Toys R Us, Office Depot can't think of any. All have new warehouses in Maryland or blueprints ready. But the best-connected spot of all, the axle of the commercial hub, is not sharing in the boom. The City of Baltimore is at the epicenter of rail, road and water. Almost all port facilities are inside the city. I-95 is a few hundred yards away. But the city, which needs new construction and new jobs, is landing few warehouse projects.

It's hardly for lack of demand. "The city has a lot to offer," said Tim Bahr, who specializes in industrial real estate for KLNB Inc., a Towson brokerage. "It has the infrastructure. It has the labor force. You can attract some good companies to the city."

And it's hardly for lack of space. Baltimore has more than 600 acres of empty or underused land in pieces of 10 acres or more that is zoned for industrial use, according to a recent inventory taken by the city's planning department.

What the city doesn't have is usable land. More than half its empty industrial acreage is known or strongly suspected to have soil pollution from previous users. Most of the rest exists in isolated parcels, not all of them near the veins of transportation.

Lenders these days are wary of financing factories and warehouses that aren't in prepackaged industrial parks. And they're scared down to their wing-tips of financing projects with even a rumor of dirty dirt.

As a result, the free markets are not exactly raining warehouse projects on Baltimore. Why take a risk on a contaminated city outparcel when you can get 10 sweet, green acres in a Harford County business park? The city has lost more than 3,000 wholesale jobs since 1992; the state has gained more than 1,000, according to the U.S. Labor Department. Those figures probably underestimate the state's warehouse growth because they don't include distribution centers set up by retailers like Office Depot.

But what free markets withhold, government sometimes can help provide. The Abell Foundation, a local philanthropic group, recently issued a report showing how City Hall can put Baltimore in a position to win warehouses and other industrial projects.

The city, the study said, should develop warehouse parks on vacant land, possibly setting up a separate industrial authority to do so. And it should commit substantial financial resources, selling bonds or guaranteeing loans. The money would be repaid with taxes from the new facilities.

The toughest issue is pollution. The city's whole budget isn't enough to clean contaminated sites. What's needed, many policy-makers say, are federal and state money, lower standards for some industrial sites and guarantees that tenants and owners won't be sued after a tract is deemed clean enough.

People in city, state and federal government are studying ways to redevelop these "brownfields."

The city has Abell's proposal. Mayor Schmoke has referred it to his business advisory council and is waiting for an evaluation. Evans Paull, executive planner with the city, had some quibbles with the study but called it "a strong rationale for more aggressive action by the city in promoting industrial development."

One of his objections was that warehouses provide fewer jobs than factories and stores. But good warehouse stock in the city might lure some manufacturers, said Michael Conte, director of the Regional Economic Studies Program at the University of Baltimore. And right now, warehouses are what companies want from Maryland. They just don't see any places to put them in Baltimore.

"If no one else is going to do it," Mr. Conte said, "it's up to the city fathers to make it happen."

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