A development boom that revitalized huge swaths of downtown Baltimore this decade slowed last year, with plans scaled back or delayed amid the recession and tightened credit markets.
Vacancies increased 2 percent in downtown offices, and about 1,000 jobs were lost, the Downtown Partnership of Baltimore says in a report to be unveiled Thursday. Job losses are expected to continue mounting this year as layoffs continue in the financial services sector.
But even as 2009 promises to be a tougher year, the State of Downtown Baltimore report makes the case that downtown is better positioned now than it was in the early 1990s to weather a recession and likely to fare better than some harder hit parts of the country.
"Given the very tough times ... in the U.S., downtown Baltimore has held its own," said J. Kirby Fowler, president of the Downtown Partnership.
According to a ranking of the top 25 biggest metro areas, downtown Baltimore added 2,000 residents and 1,100 new housing units to rank seventh in population within a one-mile radius. With nearly 40,000 residents, Baltimore's core downtown population tops that of Boston, San Diego and Denver. Also in the one-mile radius of downtown, Baltimore jumped to 11th place in median income, at $34,446, and climbed to eighth place in number of households with more than $75,000 in annual income, beating downtown areas of San Diego, Denver and Dallas.
Last year, completion of hotel, hospital and mixed-use projects pushed investment for completed projects to $1.38 billion, up from $261 million in 2007, thanks to such undertakings as the $301 million Hilton Baltimore Convention Center hotel, a mix of projects in Harbor East and offices in the University of Maryland BioPark.
This spring, $1.5 billion worth of projects are under construction or scheduled to be finished downtown, including Mercy Medical Center's $400 million Mary Catherine Bunting Center.
The pace of projects is expected to slow in the second half of the year. No new housing projects are expected to start as the market struggles to absorb newly constructed homes and condos. Still, apartment buildings had average occupancy rates of more than 90 percent last year, and rents increased by an average 3 percent.
Increasing layoffs in financial firms have had a ripple effect, hurting service and retail-oriented businesses downtown, said Daraius Irani, director of applied economics for the RESI consulting arm of Towson University. The unemployment rate, which reached 6.9 percent in Maryland in March, will not likely begin to decrease until later in 2010, he said.
Richard Clinch, director of economic research for University of Baltimore's Jacob France Institute, also said he expects more challenges ahead this year.
But he and other economists say once a recovery begins to take hold, likely in 2010, Baltimore will be poised to move forward.
"The city will have a large base of new commercial space, office and retail, and more residential than really at any time in the last 15 years," Clinch said. "Projects are clearly going to be delayed somewhat ... but the prognosis for the city and downtown area is quite good."
Baltimore at a glance
Downtown one-mile radius totals, 2008:
Employment: 113,500
Residents: 39,983
Hotel rooms: 7,639
Office space: 21 million square feet
Rental and for-sale housing units completed:
623 (2007)
1,100 (2008)
Hotel rooms completed:
112 (2007)
757 (2008)
