Struever scales back Charles Village plans

Housing slump noted in shift from luxury condos to rentals

May 24, 2007|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

A vision to inject luxury living into Baltimore's Charles Village has foundered amid a slumping housing market.

Instead of spacious condominiums with price tags as high as $700,000, developer Struever Bros. Eccles & Rouse is now proposing smaller, market-rate and affordable apartments on a key site in the builder's "College Town" redevelopment project.

Named the Olmsted, the building in the 3200 block of St. Paul St. could end up taller and include about twice the number of units first proposed. The shift would be a marked contrast to the original plan to bring high-end housing and affluent residents to a neighborhood characterized by mostly modest rowhouses and businesses catering to students at nearby Johns Hopkins University.

When it was first unveiled, the plan called for an $83 million, 12-floor building with 107 condominiums, 15,000 square feet of stores, and a parking garage wrapped and hidden by the condos. The Olmsted was to be the last piece in a Struever-led revitalization of several blocks that has included two recently completed projects - Hopkins' Charles Commons student housing, anchored by a Barnes & Noble bookstore, and Village Lofts, 68 condominiums with ground-floor shops, across St. Paul Street.

But yesterday, company president and chief executive C. William Struever acknowledged that the scenario wasn't playing out as he had envisioned. Sales at the Village Lofts, completed about six weeks ago, have been slower than expected, Struever said. And after leveling a block of rowhouses on the west side of the street for the Olmsted, the fenced site has sat idle for months, with no activity and a sign heralding the condos removed. Crosswalks and sidewalks remain unfinished.

Struever blamed the national slowdown in the housing market and rising construction costs. "The market has been changing for about a year, in terms of the for-sale market," Struever said. Late last year, "we were ready to go and close our financing, and we mutually agreed to hold off," he said.

"We mutually agreed, with our partner and lender, to re-look at these things," Struever said.

Officials at Struever's partner, Canyon Johnson Urban Fund II, started by retired basketball star Earvin "Magic" Johnson, said yesterday they would defer to Struever as spokesman.

John McIlwain, a senior fellow for housing at the Urban Land Institute, said developers in many cities are now faced with similar decisions.

"It's easier to transform a neighborhood when the market is very strong, and obviously now we're in a trough," McIlwain said. "But we're in a period where rents are rising, and so the rental market is stronger."

Other developers of Baltimore condo projects have scaled back or delayed their plans in the wake of the slowdown.

Richard W. Naing of RWN Development Group, planning two towers on Guilford Avenue downtown that would be among the tallest in Baltimore, said they will not be built until the condo market picks up, possibly in three to four years. New York-based UrbanAmerica now says its proposed Pratt Street building in the Inner Harbor might have more hotel rooms and fewer condos than first planned. And Philadelphia-based ARCWheeler, taking another look at plans for its Light Street skyscraper, thinks it will keep the loft and condo component below 200 units instead of nearly 300.

In Charles Village, residents and business owners, including some who were skeptical of the viability of a high-end project from the start, worry about the future of a prime plot in the heart of the neighborhood.

"People are upset about the lack of development," said Dana Peterson Moore, president of the Charles Village Civic Association. "They've torn the buildings down and nothing is coming up. It looks bad and people are disappointed."

Stopping work on the streetscape has been disruptive, said Jerry Gordon, owner of Eddie's Market in Charles Village.

"They took out some trees and then all of a sudden everything stopped," Gordon said. "Crosswalks go halfway across the street and there's a big empty lot across the street. It's an unfinished symphony."

Struever said he plans to propose a modestly taller building, perhaps 14 stories, with about 200 rental units, including about 40 to 60 apartments that would qualify as affordable housing. He said the company planned to request tax-increment financing from the city to subsidize the cost of the affordable housing.

"We're saying, let's embrace affordable housing," Struever said. "Today it's the strongest part of the market, but hardly anything is being built for less than $400,000. ... We have a lot of people who make $50,000 or $60,000 and would love to live in the city and can't afford $400,000."

The revised plans would double the amount of retail space to 25,000 to 35,000 square feet, and would add about 60,000 square feet of office space.

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