Baltimore Fund's dollars to help employer grow

Maker of equipment for dredging expected to expand, add 40 jobs

October 15, 2003|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

A venture fund created last year to stimulate economic growth in Baltimore announced its first investment yesterday, more than $1 million to a manufacturing company that intends to nearly double its local work force.

The Baltimore Fund, financed primarily by the Open Society Institute-Baltimore and the Annie E. Casey Foundation, expects its investment in Baltimore Dredge Enterprises LLC to allow the company to expand into more markets and add 40 jobs to its 50-person work force in the city.

"It has promise in both growth - meaning financial return - as well as real social return for Baltimore City," said Patrice M. Cromwell, work force and economic development fellow for Open Society Institute-Baltimore.

Baltimore Dredge Enterprises, in the Camden Carroll Industrial Park, manufactures dredging equipment used for handling industrial waste, maintaining wastewater treatment plants, extracting sand, removing silt and other activities.

Officials would not reveal the amount of the Baltimore Fund's investment but said it was between $1 million and $3 million. The fund began with $15 million to spread among local businesses in an effort to produce more than 1,000 jobs for low-income workers and good returns for its investors, mostly nonprofits.

"This first investment is a great example of how Baltimore has great economic assets that, with the right capital and the right attention, can really be nurtured and grown to the benefit of families and neighborhoods," said Robert Giloth, director of family economic success at the Casey foundation.

The company traces its history to Ellicott Machine Corp. International, formed in 1885. Ellicott Machine liquidated its assets and laid off all of its employees last year after a business dispute stemming from a deal to sell three dredges to Thailand that went bad.

Baltimore Dredge Enterprises was created in July when Baltimore Dredges - the successor of Ellicott Machine - merged with Liquid Waste Technology. A Kansas City company was acquired at the same time. Urban Growth Partners, which manages the Baltimore Fund, also invested in that reorganization deal.

"We have confidence in the management," said fund manager Erik Johnson, a principal of Urban Growth Partners.

Baltimore Dredge Enterprises appreciates the fund's hands-on nature of investing, which includes assistance with work force development and other issues."We've been looking to grow the business, and the UGP folks offered us the best package," said Peter Bowe, the company's president. "We're getting not only money, but expertise in all facets of our business."

He said it's becoming increasingly difficult to find potential employees with the manufacturing skills his company requires. He'll need to hire welders, painters, mechanics and machinists to fill the 40 new positions, at starting wages ranging from $11 to $14 an hour.

Johnson said the fund will look for people who can step into the jobs immediately but will also coordinate training for those who lack some of the skills needed. "We try and take some of that burden away from the company because we want the company to focus on making its ... dredges," he said.

The Baltimore Fund is part of a larger, $50 million fund managed by Urban Growth Partners, the venture capital arm of the Reinvestment Fund, a Philadelphia nonprofit.

Giloth said the Casey foundation worked with the Reinvestment Fund on a campaign in Philadelphia to spur growth by investing private money into businesses.

The $10 million effort created about 1,000 jobs, he said, helping convince the foundation that the same approach could work in Baltimore.

Such investment is always helpful, said Richard Clinch, director of economic research for the University of Baltimore's Jacob France Institute. Some argue that cities are not properly served by financial institutions, he said, and urban areas have been hit hardest by job losses in manufacturing.

"This is one way of fighting that," he said. "It's unambiguously good for the regional economy."

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