Lipitz to lead board of BDC Schmoke picks entrepreneur for development effort

October 05, 1995|By JoAnna Daemmrich | JoAnna Daemmrich,SUN STAFF Sun staff writer Kevin McQuaid contributed to this report.

Promising a fresh start with the Baltimore business community, Mayor Kurt L. Schmoke is appointing a prominent entrepreneur to be the architect of an overhaul of the city's much-criticized economic development agency.

Mr. Schmoke confirmed yesterday that he is putting Roger C. Lipitz, the former chairman of Meridian Healthcare Inc. and the University of Maryland Medical System, in charge of leading a revamped board of the Baltimore Development Corp. (BDC).

The move is expected to spark a transformation of the agency, which came under attack by corporate critics for its lack of responsiveness and inability to retain key businesses. Among likely changes is a less-extensive role in BDC for Shapiro and Olander, the law firm of the mayor's top political advisers.

While defending his efforts to create and retain jobs in the past eight years, Mr. Schmoke acknowledged yesterday that he often is seen as not doing enough to promote business publicly.

It was one of the blunt conclusions reached by a nine-member panel that studied the agency at the mayor's behest. City Council President Mary Pat Clarke also criticized the mayor's economic development record, pointing to the loss of thousands of jobs, in her failed attempt to unseat him in the Democratic primary.

"I think if you took a poll of business leaders they would say he doesn't make contact with us enough," Mr. Schmoke said. "I visited businesses, but either the word was not getting around, or the way I did it wasn't as effective as I thought. So I'm trying to change my style. If I run again, I don't want to have people asking, 'What's he done?' "

The mayor said he intends to devote more time and energy to being a corporate booster in his third term. He is stepping up his business rounds to meet with more company owners and working to create more of a "pro-business image."

One of his first actions to strengthen relations with the business community -- appointing Mr. Lipitz to chair an expanded and more activist BDC board -- already is drawing praise.

Morton I. Rapoport, chief executive of the University of Maryland Medical System, strongly recommended Mr. Lipitz to the mayor.

"He instituted business principles and discipline, and helped us craft the systems we have in place today," Mr. Rapoport said.

"He either knows or knows people who know every critical decision-maker in town, and he can talk to them as equals," said A. B. "Buzzy" Krongard, chairman and chief executive officer of Alex. Brown Inc.

For much of the past year, business leaders and the City Council have debated the effectiveness of BDC, a quasi-public agency that was created in 1991 by melding two distinct economic development groups. Criticism grew as insurance giant USF&G Corp. announced plans to leave its downtown headquarters and consolidate in Mount Washington. AAA Mid-Atlantic Inc. moved to Cecil County, and the vacancy rate in downtown commercial space approached 25 percent.

The role of Shapiro and Olander at BDC also became an issue. Honora M. Freeman, the agency's previous director who had been a lawyer with the firm, was reassigned by the mayor last spring. And in mid-July, the city disclosed $18 million in taxpayer funds for legal work done by private firms in the preceding 4 1/2 years, including $2 million to Shapiro and Olander. The firm's work included representing BDC and several other quasi-public agencies.

Two weeks ago, Mr. Schmoke said he wanted to have the city's own legal staff take on more of the work again, including some done by private firms for BDC and other agencies.

Mr. Lipitz is expected to shore up BDC by acting on the panel's recommendations to create a stronger board and to lead a search for a new director. The agency has been run on an interim basis by John Sundergill, director of economic development for Baltimore Gas and Electric Co., who is leaving in November.

Mr. Lipitz, 53, is perhaps best known as the chairman of Meridian -- the privately held, Towson-based nursing home operator that was sold in 1993 to a Pennsylvania company for $205 million. He was chairman of the board of the University of Maryland Medical System, where he instituted cost-control measures, and has had extensive contact with public and quasi-public institutions.

"He's not involved in politics, but he's politically savvy, and he shares my goals of making our economic development efforts inclusive," Mr. Schmoke said.

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