Downtown apartment plan stalls

Developer says progress is halted by rising costs

October 07, 2006|By Jill Rosen | Jill Rosen,Sun reporter

The developer Baltimore tagged to build luxury apartments on an uninspiring downtown corner blames a softened real estate market and soaring construction costs for stalling the project for more than a year and a half.

City development officials announced in January 2005 that a team led by Mark Sapperstein would build a high-rise called Cityscape near Calvert and Lombard streets. Twenty months later, Sapperstein is still deciding what to build.

This week, officials with Baltimore Development Corp., the city's development arm, were expecting Sapperstein to ask for yet another extension of what began as a 90-day exclusive negotiating period with the agency.

"In any business, you have to make adjustments depending on the economy, etc., and that's what I'm doing here," Sapperstein said. "The reason we're in flux is we're deciding what makes sense to do."

Meanwhile, impatience is building over the lack of progress on the corner. This week, Downtown Partnership President Kirby Fowler asked BDC to prioritize the project.

"We hope that the parties will move forward on a more aggressive schedule," Fowler said. "The buildings have sat empty, and it's a critical site."

BDC has been working to redevelop the area, which is just a block away from the Gallery at Harborplace, since 2001. The agency acquired a number of properties through eminent domain, and in the summer of 2004 it began accepting bids for the site, which is bounded by Calvert, Lombard, Mercer and Grant streets.

Sapperstein's was one of three teams to express interest in the property. The city chose his luxury apartment-based plan, the most ambitious, over the other hotel-oriented proposals.

Unveiled at a news conference at BDC headquarters, the $71 million Cityscape was to include 300 apartments renting for as much as $3,000 a month, street-level shops and a 542-space parking garage. A pool was to go on the roof of the 25-story building.

In the original deal, Sapperstein was going to pay the city $6 million for the site and apply for tax breaks.

The city's Board of Estimates would have to approve the purchase while the City Council needs to sign off on the PILOT (payment in lieu of taxes) arrangement.

Neither of those things can happen until Sapperstein and the BDC hammer out a deal - and Sapperstein is still requesting more time.

Kim Clark, a BDC economic development director, said that Sapperstein verbally requested another extension of his negotiating period. She said she's waiting for the request in writing in order "to get things moving."

Sapperstein said that market changes have him thinking differently about how he wants to use the property.

He said he's "kicking around" an idea with Brookshire Hotel - which is next door to the BDC site but was not part of the original deal. It involves expanding the hotel by about 100 rooms and cutting the number of residential units in his plan.

Additionally, Sapperstein said he's no longer sure if he wants to build apartments, which he sees a need for in the market, or condominiums, which he thinks would bring in easier profits.

"The issue is apartment versus condo," he said. "We're working on this on a daily basis."

With rents at over $2 per square foot per month, Cityscape would be one of the most expensive downtown buildings - rivaling waterfront properties such as Spinnaker Bay.

Unsure if there would be interest in apartments that expensive off the water, Sapperstein thinks it might be smart to expand the Brookshire to the lower levels of his building, then start the apartments or condos on the 10th floor - where he would be able to sell the view.

He said the residences and the hotel could share a lobby and tenants could take advantage of hotel cleaning and concierge services.

Sapperstein said his partners on the project remain the same. They include Arrow Parking, Harbor Bank of Maryland Chief Executive Joseph Haskins Jr., and Savannah Development Corp.

Savannah is owned by BettyJean Murphy, who is involved in a dispute with the city over $1.3 million she made by selling a building bought with a public grant that she was supposed to convert into low-income housing.

Sapperstein said last week that Murphy is still part of his team, despite her "issues" with the city.

On BDC's Web site, the agency still puts Cityscape's completion date at July 1 of next year. "It's closer to fall of 2008," Sapperstein said, adding that's only if things begin soon.

Still, BDC officials appear patient.

"I think people feel like when this happens," Clark said, "it will happen."

Meanwhile, if anyone is happy over the Cityscape delays, it's the young artists getting free gallery space in the vacant buildings until demolition begins.

When the city turned over the 30 S. Calvert St. building to Currents in January 2005, officials promised the artists only six months. The idea was to have something vibrant in the space during the lull.

"It's been great," said Hans Petrich, one of the gallery founders. "Every time we talk to them, they push it back another six months.

"It's been almost two years."

jill.rosen@baltsun.com

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.