Old P&G site about to sell again Polun expecting to close deal soon with unnamed firm

September 17, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF Staff writer Joe Mathews contributed to this article.

The former Procter & Gamble site on 26 acres in Locust Point may change hands for the second time in two years. P&G vacated the waterfront site in 1995 and sold it a year later for nearly $7 million to A&E International Ltd., a Korean spirits maker that said it would manufacture Korean liquor there.

Those plans never crystallized, and now Gerson P. Polun, a local architect and president of Fort Carroll Associates, a development company, said he has a contract for an undisclosed amount on the sprawling brick complex.

"Negotiations with the seller are concluding," Polun said. "We have a contract, but we have not closed. Closing is imminent."

The attorney for A&E said the deal is weeks away from being final.

"The property is under contract, and Polun is the principal of the company" that intends to buy it, said Wilbert Sirota, an attorney with Piper & Marbury in Baltimore. He would not disclose the terms of the agreement.

Prior to the contract with Polun, A&E was in continuing discussions with people about acquiring or co-developing the property, Sirota said.

There has been a lot of interest in the site, especially to redevelop it into office space, real estate sources said.

"There is something compelling about the water, although it's a somewhat unproven market for potential office redevelopment," said a source who declined to be identified. "Historically, waterfront office projects have done well on the north side of the harbor, in Canton and in Fells Point."

Polun said he has formed a new corporation, P&G Development Co., that has joined with GOW International, a construction firm, to buy and develop the property. Its intended use is under review, Polun said.

The first hint of the purchase came Monday night, during a public hearing in Locust Point on the Baltimore Development Corp.'s proposal for an expansion of South Baltimore's enterprise zone.

At the end of the meeting, Polun rose and said, "As the new owners of the Procter & Gamble plant, I'd like to say we support the enterprise zone."

BDC officials are set to meet with Polun next week "so they can introduce themselves and we can see how we can work together on what they are doing," said Michele Whelley, BDC's executive vice president.

"There have been a number of potential buyers," Whelley said. The site is "absolutely a prime piece of real estate in the city for significant office, warehouse and light industrial operations," she said. "It's very well-situated for pier access."

The original concept for the property -- to import raw materials and manufacture soju, a clear, vodka-like liquor similar to sake -- would have taken full advantage of that access, but the idea "fell by the wayside," Sirota said.

Under a plan developed by A&E, the company would have imported raw materials and distilled them at the 1422 Nicholson St. plant and shipped the finished product to Asia through the port of Baltimore.

The company's plan was to initially hire about 100 workers -- and up to 250 workers over time -- and begin operations in the spring of 1997.

Jim Hughes, director of the Office of International Business for the Maryland Department of Business and Economic Development, said A&E officials were developing their plan when an economic crisis hit Korea and delayed the project indefinitely.

"The liquor deal heavily involved Korean investors and selling to the Korean market," Hughes said. "With the currency devaluations, the plan is not in the works anymore. Nothing has been manufacturered."

The state is "very interested in having the site used productively," he said. "It's a valuable piece of property."

DBED and BDC met with A&E as recently as two months ago to discuss plans for the property, Hughes said. "They said they were looking at a variety of opportunities," he added.

Procter & Gamble Co., which was a stalwart of Baltimore's industrial waterfront for six decades, closed its Locust Point manufacturing plant in 1995, eliminating 215 jobs.

The complex, which opened in 1930, produced Ivory, Dawn and Joy dishwashing liquids, as well as refined glycerin for industrial use.

"It's encouraging to hear [Polun is] buying it, but it's hard to tell what it will mean for the neighborhood," said Bob Davis, president of the Fort McHenry Business Association. "I'm not sure they know yet what their business plan is.

"At the same time, it's disheartening to see the Koreans had to pull out of there. They had some interesting plans."

Pub Date: 9/17/98

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