Hope for Essex center

Developer aims to buy Diamond Point, add retailers

June 18, 2008|By Lorraine Mirabella | Lorraine Mirabella,SUN REPORTER

A mostly closed shopping center in Essex could become the home of big-box retailers and a supermarket.

The Diamond Point Plaza, which has struggled since losing Sam's Club and Ames stores, is under contract to a Pikesville developer who is lining up retailers.

America's Realty LLC, which turns around distressed shopping centers, expects to close on the $18 million purchase of the center and 6 additional acres on Eastern Boulevard and Diamond Point Road within 60 days, said Carl Verstandig, company chief executive officer.

The seller, Dallas-based ORIX Capital Markets LLC, gained control of the center that it had financed after the major retailers pulled out, according to Baltimore County officials. Doug Miller, a director of ORIX Capital, could not be reached yesterday.

The 300,000-square-foot shopping center, just east of the Beltway and Eastpoint Mall, has been mostly vacant for the past five years, since Sam's Club closed to relocate to a redeveloped Golden Ring shopping center in Rosedale, and Ames shut down as part of that chain's bankruptcy. For more than a year, the Sam's Club space had been used as a sound stage in the production of the HBO series The Wire.

"When [Sam's Club] ... left, it sort of sucked the life out of the center," said Chris McCollum, commercial revitalization specialist for the ounty Department of Economic Development. "It's going to take good vision to redevelop it in a way that will be successful for the long term and helpful for that area. With the right ideas, it can be a great center."

Both Food Lion and Shop Rite supermarkets are interested in moving into the 65,000-square-foot former Ames space, and both have signed letters of intent, Verstandig said.

BJ's Wholesale Club and Lowe's home improvement chain also have expressed interest in the 160,000-square-foot former Sam's Club space, he said.

Another letter of intent has been signed by Price Busters Discount Furniture for 20,000 square feet in one of the 15 smaller store spaces. Three stand-alone sites in front of the center would likely be leased to a bank, a drugstore and an auto parts store.

"In 25 years of doing this, I've never had so much activity on a location," Verstandig said.

Target also is reportedly interested, according to a real estate source.

Verstandig said retailers are reacting to the residential growth, with more expected, in a densely populated but underserved area. The parcel is one of the largest available for redevelopment in the Essex areas.

The east side of the county has been undergoing a transformation over the past several years with development of new housing driving demand for additional retail, McCollum said.

Martin's Plaza shopping center has been redeveloped with a Target store. In Middle River, Ryland homes built the 800-townhouse Miramar Landing, while single-family homes at Waterview were built on the former site of World War II-era Riverdale Apartments. And plans are under way to transform an historic World War II aircraft manufacturing plant in Middle River from industrial space to other uses by a team known as Middle River Station Development LLC, which purchased the former Glenn L. Martin Co. plant from the federal government.

Eastern Baltimore County is expecting more growth when new jobs come to Maryland as a result of the federal base realignment.

"There's a big market there that has been underserved [with retail], and that parcel is in a prime location to meet that need," most likely drawing shoppers from the eastern county and city neighborhoods such as Fells Point, McCollum said.

America's Realty plans to invest about $12 million to $14 million in a new parking lot, new lighting and updated facades, which should take about two years, Verstandig said. He said he has a commitment for financing from PNC Bank.

Though the credit crunch has made it tougher for commercial and residential, projects to get financing, "retail and commercial properties still have financing opportunities, but lenders have been much more closely analyzing each transaction," scrutinizing borrowers' experience and the project locations, said Y. Jeffrey Spatz, an attorney with attorney Gordon, Feinblatt, Rothman, Hoffberger & Hollander LLC of Baltimore.

The firm is representing America's Realty in the Diamond Point purchase.

America's Realty owns 163 retail centers in eight states, including 96 shopping centers in Maryland. The company bought 31 centers last year alone.

lorraine.mirabella@baltsun.com

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