Choice Of Arena Developer Delayed

Project Unlikely To Go Ahead Until Economy Improves, Financing Becomes More Available

July 08, 2009|By Lorraine Mirabella | Lorraine Mirabella,

Baltimore officials have put off selecting a developer for a downtown sports and entertainment venue but say they remain committed to the project, a replacement for the aging 1st Mariner Arena that could cost at least $300 million.

"It is a complicated and large project in any time, but in this trying economic situation, there is no reason to rush," M.J. "Jay" Brodie, president of the Baltimore Development Corp., said Tuesday. "It would seem arbitrary, not meaningful, to pick a team in light of the current financial markets."

In December, the BDC had said it would begin reviewing proposals submitted by four development teams with a goal of making a decision by midyear on whether to select one. But the project is unlikely to move forward until the economy improves and financing becomes more readily available, he said.

"The real question is the degree to which we can produce a private-public partnership on financing and how much private financing might be brought," Brodie said. "It's a critical question."

All four development groups are still interested in pursuing the project, Brodie said. An advisory panel of state and city officials that is reviewing the proposals recently asked each group to notify the city about any changes in the makeup of its team or proposal.

The proposals, submitted in response to a city request for bids, all called for an 18,500-seat facility on the current site of 1st Mariner Arena, one large enough to draw big concerts and acts and potentially attract a professional basketball or hockey team. But each had ideas for other uses that would help enliven the Baltimore Street site on the city's west side, including a seven-screen movie theater, a hotel, a concert hall, offices or street-level shops.

Plans unveiled in December included one from Struever Bros. Eccles & Rouse that would include two public parks - one atop the arena - a 300-room hotel and street-level retail.

ESmith Legacy Inc., which includes ESmith Legacy and Dallas-based Garfield Traub Development as the developers, proposed incorporating a seven-screen movie theater, a 1,000-seat concert venue, 20,000 square feet of shops and a garage.

A third proposal, by the Arena Development Group, called for a garage as well as 100,000 square feet of shops.

A fourth group, Cormony Development, proposed a 400-room hotel, 240,000 square feet of offices, up to 20,000 square feet of shops and a garage.

"We're still very interested ... in pushing forward on the project," said Sean MacCarthy, a member of Arena Development Group.

Obtaining money for the project would depend partly on the design, which would determine its cost, and on arriving at a mix of uses that lenders would be willing to finance.

Vernon Marrow, a member of the ESmith Legacy team, said the group has not changed its proposal.

"The economy has changed, but that has not necessarily changed our program," Marrow said. "We continue to try to identify creative ways to recommend to the city and the BDC to try to get the deal financed in light of the economy changing."

In many ways, he said, making that assessment is no different now than during a robust economy.

"How are lenders looking at things, and how are investors looking at things?" he said. "Developers have to be creative in identifying possible solutions."

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