Strip center still not built, Port Covington languishing

Broker says developer wants tenants in hand before breaking ground

July 23, 2002|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Nearly a year after it expected to announce tenants, the developer of the Port Covington retail project, home of Sam's Club and Wal-Mart, has not broken ground on the project's third leg, a 100,000-square-foot retail strip center.

When details of the project were unveiled in June last year, the developer, Fairfield, Conn.-based Starwood Ceruzzi Inc., said it planned to have 10 to 15 strip center tenants signed by Labor Day.

The site - a wide swath of land in front of the Wal-Mart and Sam's Club stores - is dormant now, empty of construction equipment or mobile offices. The dirt is peppered with stones and other debris to stabilize the soil and minimize runoff. Only parking lot lights, fire hydrants and sewer pipes are in place.

The developer did not respond to phone calls seeking comment. The site's contractor, Konover Construction Corp. of Farmington, Conn., declined to comment.

Susan B. Anderson, a retail real estate broker and vice president with Timonium-based H&R Retail Inc., said she has a client with a fully negotiated lease for a 10,000-square-foot store in the strip center. But the developer hasn't signed the document yet. "We've been told that when they get enough leases signed, they'll be ready to build, which makes perfect sense," Anderson said.

Many retailers curtailed expansion plans in the aftermath of the terrorist attacks of Sept. 11, as the economic downturn eroded retail sales. Adding to the difficult leasing environment is Port Covington's hard-to-find location in an old industrial area of southern Baltimore, local officials and real estate professionals said.

The 45-acre former rail yard, with access off East Cromwell Street, is not easily seen from nearby Hanover Street and the expressways entering the city from the south. The cost of the entire retail development project was estimated at $30 million to $50 million.

Wal-Mart opened in April and Sam's Club in May. Both stores are part of Wal-Mart Stores Inc. of Bentonville, Ark.

Larisa Salamacha, director of economic development for Baltimore Development Corp., the city's business development arm, said Port Covington presents a challenge as a retail destination.

"But I believe that it's going to be overcome," Salamacha said.

Salamacha said she approached officials at the stores after she visited the Sam's Club about six weeks after it opened and noticed that customer traffic seemed low. She said she has been working with Ceruzzi, Sam's and Wal-Mart to find ways of drawing attention to the center.

"To me, it's got perfect access," she said. "Initially it's a little confusing. ... I just think it's a matter of people becoming familiar with it as a location."

Wal-Mart and Sam's put up a billboard off of Interstate 95 that gives directions to the stores from the Hanover Street exit. Other, smaller signs are at Hanover and Cromwell streets.

Keith Morris, a Wal-Mart spokesman, said he didn't have information on the stores' financial performance or customer traffic. But he said the decision to put up directional billboards is not uncommon for the mass discounter and that it is usually made by individual stores.

Paul Kram, the Wal-Mart store manager, said his store had expected to benefit from the planned strip center..

"While the foot traffic isn't up to our original estimates, our original estimates were made with the idea that there would be more of a shopping center around us," he said.

"Part of the problem there is visibility," said City Councilwoman Lois Garey, whose district includes Port Covington.

"You have to be right on top of the Wal-Mart to know where it is. You better be paying attention and know that you're going into Port Covington, because it looks like you're going into the wilds of the industrial area.

"As far as I'm concerned, it's in everybody's best interests for the site to succeed, but the visibility issue is a problem, and the ability to get there, and that needs to be corrected somehow."

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