Waterfront shopping proposed

2 warehouse stores would anchor center in South Baltimore

45 acres at Port Covington

`Big box' plan would require OK from City Council

March 25, 2000|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

In a bid to tap into a resurgence in the urban retail market, a Connecticut-based developer wants to build the city's first "big box" shopping center on a former rail yard in Port Covington, an estimated $50 million project that could bring up to 600 jobs.

Starwood Ceruzzi is proposing a 400,000-square-foot waterfront center anchored by two warehouse-style superstores on Cromwell Street in South Baltimore, the company said yesterday.

The developer has a contract with CSX Corp. to purchase about 45 acres on part of a peninsula east of Hanover Street, but has not yet closed the deal, Ken Goldberg, a Starwood Ceruzzi senior vice president, said yesterday.

The company hopes to anchor the shopping center with national retailers, including a home improvement warehouse and a wholesale club. Other tenants would likely include large, high-volume "category-killer" retailers and food and service shops, Goldberg said. The center would most likely house seven or eight larger tenants, including anchors of more than 100,000 square feet and stores of at least 10,000 square feet, as well as six or seven smaller merchants.

"We think it's going to be a great addition to the city, giving everyone who lives and works in the city the opportunity to have that shopping at their fingertips," Goldberg said. "They will not have to travel the distance they have been traveling to shop in these types of stores."

The Port Covington project as well as its pending redevelopment of Hunt Valley Mall in northern Baltimore County represent Starwood Ceruzzi's first ventures in Maryland. The developer, an affiliate of Starwood Capital Group, owner of Westin Hotels and ITT Sheraton Corp., expects to close a deal to buy the mall March 31.

Goldberg, who is based in Bethesda, said he hopes to start construction on the Port Covington center by the beginning of next year and open in late 2001 or early 2002.

The project, however, is contingent on City Council's approving an amendment to the current ordinance governing the site, which calls for a mixed use of office space, a hotel, convention meeting space, industrial use and retail.

City officials said they have not yet decided whether to support the amendment, which would allow a predominantly retail use.

"This is the first proposal we've seen of this nature," said Larisa Salamacha, a director of economic development for the Baltimore Development Corp. "It's a well-developed and, from what we can tell, well-financed project, but we are in the process of doing due diligence, so there are no decisions."

The developer plans to meet with council representatives about the necessary amendment, said Jon Laria, an attorney for the developer. Starwood Ceruzzi will then meet with business and community members in the Federal Hill and South Baltimore neighborhoods, he said.

City officials have long been trying to lure "big box" retailers, typically mass merchandisers, such as Target, Wal-mart and Kmart; warehouse style stores such as Sam's Club or Home Depot, and category killer mega- stores that offer discounts on a specific category such as toys, linens or sporting goods.

Several decades after retailers began abandoning the inner city in Baltimore and elsewhere to follow the migration to the suburbs, many chains have begun recognizing underserved urban areas as the newest frontier for growth.

Lack of land

But national big box chains such as Home Depot and Office Depot have come into Baltimore as individual stores, not as part of entire centers. One of the biggest obstacles in urban locations is the lack of available land.

Laurie Schwartz, the city's deputy mayor for economic development, said Starwood's proposal to bring in more national chains appears intriguing, though the plan still requires city review and community input. "It looks very interesting and could be a good addition to the retail mix in the city," Schwartz said. "We do believe there's a strong demand in the city for national retailers and particularly big box retailers."

But, she said, the current city administration wants to build up existing commercial districts as well as attract national retailers.

"We believe there's a market for both, the smaller unique specialty retail as well as the national retailers," she said.

Sonny Morstein, owner of Morstein's Jewelers in Federal Hill and president of the South Baltimore Federal Hill /Marketplace Business Association, said he received a letter from the developer describing the project as one that will complement existing businesses. "I'm curious to hear how we're going to co-exist rather than compete," he said. "On the surface, it's something to be alarmed about if you're a retailer. On the surface, it's not something we'd look forward to, another large shopping area in our district."

Former rail yard

The Port Covington site is part of an original 130 acres owned by CSX and once used as a rail yard by Western Maryland Railway. About 60 acres were sold to the Baltimore Sun Co., parent of The Sun, which opened a printing plant there in 1992.

The remaining parcel has been on and off the market for a decade, said Robert L. Gould, a spokesman for CSX in Washington.

First District Councilman John Cain, who said he has not yet seen details of the project, said he believes the area could use a large retail project to attract people.

"Fortunately, this area is a non-residential area and is already vacant, so it's not going to impact, I don't believe, on neighborhoods," he said.

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