Continental Foods looks at port site Distribution center may be installed at Port Convington

City, state woo company

Covenants for area need to be rewritten to allow for project

February 13, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The city and state are working to persuade Continental Foods to develop a major distribution center at Port Covington, even though covenants crafted years ago appear to restrict warehouse development in the South Baltimore business park.

Continental Foods, which has tentatively committed to purchase more than half of the available land in the 135-acre park for about $5.3 million, would build a distribution center covering as much as 400,000 square feet, sources said.

The $15 million project would open with slightly more than 100 people, but city officials believe the food distributor's work force could swell to 500 employees within a few years.

But for the city, an agreement between Port Covington developer CSX Realty Inc. and Continental Foods would significantly alter the mid-1980s plans for Port Covington, conceived at the height of the area's office boom.

At the time, the city envisioned Port Covington as a business hub complete with 2 million square feet of office space, a 450-room hotel, an 800-slip marina, shops and a health club. The city contributed $36 million in bonds and other financing to its development.

Between 1990 and 2000, the city expected the $500 million waterfront park to become the site of 6,000 jobs.

Since then, however, demand for local office space has stagnated while the need for distribution space has exploded, forcing economic development officials to consider alternatives. Today, fewer than 1,000 work at Port Covington.

"We're perfectly satisfied that legally Continental's plan fits in with the restrictions in place," said M. J. Brodie, president of the Baltimore Development Corp., the city's economic development agency.

"The uses for Port Covington are written more broadly than we originally thought," he added. "And now, we need to look at the realities of the market and ask who our customers are. The alternative is to sit back and watch the grass grow there."

Port Covington is particularly attractive for distributors because of its proximity to Interstate 95, Brodie and others said.

The city and state have offered Continental Foods a potential "multimillion dollar financial incentive package" to locate in Port Covington, sources said. The details of the incentive package could not be determined, and neither Brodie nor company officials would discuss it.

Continental Foods, a division of Rykoff-Sexton Inc., currently distributes its products from a 180,000-square-foot building at 2730 Wilmarco Ave. that was completed in 1947. Rykoff-Sexton, which ended its 1996 fiscal year with $1.7 billion in sales, has 74,000 square feet of warehouse space in Howard County, where its lease expires at the end of this year.

The company plans to make a decision on the Port Covington land purchase by mid-April.

"Our business operates in Baltimore City now, and we want to continue to do that," said Joseph I. Abramson, Continental's president. "But at this point we're not ready to discuss it because there's nothing definitive and because Rykoff-Sexton hasn't approved it."

If the new warehouse is built, Continental would join The Baltimore Sun Co. as the major tenants at Port Covington. In 1992, the newspaper company completed a $165 million printing and packaging facility there.

Pub Date: 2/13/97

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