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Who and what are really behind Baltimore’s Superblock project?

ANALYSIS: New York developers, not a black-owned Atlanta firm, are the guiding group behind a development project that remains troublingly vague.

Stephanie IMG_1213-1

Mayor Stephanie Rawlings-Blake gestures to Bailey Pope, a principal at Dawson Co., at start of the Superblock tour last week.

Photo by: Mark Reutter

Last week, Baltimore was treated to several days of political theater over the forlorn downtown district known as “The Superblock.”

Before TV cameras and review panels, local pastors, civil rights activists, preservationists and Mayor Stephanie Rawlings-Blake took turns supporting or denouncing plans for the “Lexington Square” project there – the biggest and longest-languishing redevelopment scheme in central Baltimore.

They argued about jobs, preservation of old buildings and the value of commemorating the site of a 1955 civil rights sit-in at an ex-Read’s Drug Store. By week’s end, the Commission for Historical and Architectural Preservation (CHAP) and Urban Design and Architectural Review Panel (UDARP) let the plan proceed without requiring full preservation of Read’s or other historic properties on the site.

Missing from the hoopla were not only the key business players, but a clear-eyed assessment of whether the $150 million plan is really viable.

First, the players.

In 2006, four New York families – Goldman, Chera, Feil and Nakash – were given exclusive rights by the city to redevelop the large block bounded by Lexington, Howard and Fayette streets and Park Ave.

New York real estate mogul Lloyd Goldman is one of the partners behind Superblock. (Photo from greenpearl.com)

New York real estate mogul Lloyd Goldman is one of the partners behind Superblock. (Photo from greenpearl.com)

The Goldman and Chera families control commercial and residential property in Manhattan and Brooklyn, with the Goldman group involved in the World Trade Center redevelopment, as well as the Four Seasons and Peninsula hotels.

The Feil Organization manages more than 26 million square feet of retail and commercial property. The Nakash family owns Jordache Jeans.

City documents show that the families control 80 percent of the development company under the collective name of Lexington Square Developers LLC and through four entities: BLDG Baltimore, ICS Baltimore, Feil-Baltimore and Nakash-Baltimore.

Shaul Nakash, whose family is a Superblock investor, attends a Jordache Jeans launch with supermodel Heidi Klum in 2008. (Celebritywonder.com)

Shaul Nakash, whose family is a Superblock investor, attends a Jordache Jeans launch with supermodel Heidi Klum in 2008. (Photo by Celebritywonder.com)

The documents are signed by Lloyd Goldman, president of BLDG Associates, and Isaac Chera, manager of ICS Baltimore and a principal in Crown Acquisitions.

Minority Firm the Public Face

The families did not make an appearance in Baltimore last week, although at least one emissary from the Goldman group was present as an observer.

Instead, the public face of the project was presented by the Dawson Co., a black-owned firm from Atlanta.

Bailey T. Pope and other Dawson officials appeared alongside Mayor Rawlings-Blake in her tour of the project last Monday and made presentations before city preservation and design panels.

With a 20 percent stake in the project, Dawson actually plays a relatively small role in the plan. In his presentation before UDARP, architect Peter Fillat repeatedly cited “the guys from New York” as calling the shots on Superblock.

It’s the New Yorkers who have insisted that their business model requires that 19 of 22 buildings on the Superblock be demolished in part or full, so that new buildings can accommodate “big-box” national retailers with large floorplates.

But so far the developer has not yet signed a single tenant, raising a question about how economically viable the project is when downtown Baltimore is suffering from a glut of retail space.

Changing Plans

Originally, the project was to include 64,500 square feet of retail, 225 apartment units and a 170-space parking deck.

In its current iteration, a 28-story apartment building would tower over Park Ave. (Peter Fillat Architects)

In its current iteration, a 28-story apartment building would tower over Park Ave. (Peter Fillat Architects)

At the height of the real-estate boom in 2007, the group resubmitted plans for nearly five times more retail (312,595 square feet), 400 apartment units and a 925-space deck. That was downsized last fall to 184,372 square feet of retail, 260 apartments, 725 parking spaces and a 125-room “boutique hotel.”

Last week, Pope said the boutique hotel was up in the air, and that the developer was now weighing whether to pursue office space or residential lofts in lieu of a hotel.

In other words, except for hoping to attract retailers like Bed, Bath & Beyond and a grocery store like Whole Foods, the developers have nothing concrete about the actual mix of retailers for Lexington Square– and no more grip on potential demand from hotel or office users.

Equally unclear is precisely which buildings they want to demolish. Over the course of the last seven years, the group has slated 21 of 22 buildings (all owned by the city) for demolition.

Last week, Pope told CHAP that only the Brager-Gutman Building on Park Ave. would be retained in full, but later amended that to include Howard Furniture and Paul’s Luncheon, a small building on Park Ave.

That leaves 19 of 22 buildings to be demolished in full or with only the street facade left.

The charming Lexington St. storefront of McCrory's will be demolished because it's not in keeping with the developer's retail model, but the tilework (see detail) may be saved and used in the hotel or parking deck. (Photo by Mark Reutter)

The Lexington St. storefront of McCrory's will be razed because it's not in keeping with the developer's retail model. They say the Deco tilework (see detail) may be saved and used in the parking deck or hotel. (Photo by Mark Reutter)

History “Floating” above Modern Facades?

The public controversy over demolition has centered on Read’s. Civil rights activists say the full building should be preserved to commemorate the sit-in at the store’s lunch counter that played a part in the national civil rights movement.

The developer has only agreed to retain parts of two street walls of the building.

Their “conceptual” plan, unveiled last week, would preserve the upper floors of the Art-Deco facade, but the ground level would feature all-glass display windows in keeping with modern retail design.

This led Ronald Kreitner, executive director of WestSide Renaissance, to question how a historic building would look “floating” above a glass base. “I don’t think Baltimore needs another token example of preservation that winds up looking silly,” he said.

Other historic facades would get similar treatment. Preservationists say this approach is a direct violation of a written agreement in 2001 between then-Mayor Martin O’Malley and the Maryland Historical Trust (MHT) calling for the full restoration of as many as 17 buildings. They also say the approach risks the inadvertent collapse of the old facades.

After planning to tear it down, the developer now says it will retain as much as possible of the iron and masonry facades of the McCrory Buildings on Howard St. (Photo by Mark Reutter)

The developer says it will retain as much as possible of the iron and masonry facade of the McCrory buildings on Howard St. and demolish the rest to make way for a larger retail floorplate. (Photo by Mark Reutter)

How Many Jobs – and When?

Seeking to portray preservationists as out-of-touch, if not elitist, advocates of the project, including Rawlings-Blake, say that historic preservation must be balanced with job opportunities for city residents.

In a press release, the mayor said that 650 construction jobs would be jeopardized if the preservation panels did not swiftly approve the developer’s plans.

The pastors’ group that accompanied the mayor said they backed the project because it would spur the creation of new jobs. “There are many nameless, faceless people who are hoping this project will move forward” because they need jobs, said the Rev. Sheridan Todd Yeary, senior pastor of Douglas Memorial Community Church.

But again without leases or financing in place, it would take the developer at least another year, if not longer, for construction to start and jobs to materialize.

Preservationists argue that the best way to move the Superblock past dilapidation and limbo is to restore the old buildings. Preservation-based redevelopment, they say, creates more construction jobs than new building construction.

Their position was endorsed by the Urban Land Institute, which said last December that Lexington Square Partners should come up with a plan that complies with the preservation requirements or be replaced. (Superblock had four bidders when the city originally put it out to contract; the current developer was rated “among the least desirable when viewed from a preservation standpoint” by the Maryland Historical Trust.)

The blocks along Lexington, Fayette and Howard streets once featured dozens of low-end shops and small businesses. Hundreds of employees lost their jobs when the properties were sold to the city and boarded up.

According to the mayor, the Lexington Square project would bring back “approximately 750 permanent jobs” upon completion.

This figure contrasts sharply with the estimate of “permanent employment for as many as 325 people in retail, service and management positions” made by the developer in a October 21, 2010 report to M.J. “Jay” Brodie, president of the Baltimore Development Corp.

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  • KAS

    Setting aside the issue of whether this project is a good idea in the first place and focusing on Read’s: how about we let the developers go ahead with some version of their plan for the building in exchange for money and space for a monument commemorating the sit-in? 

  • CM

     The original sin here is the improper use of Eminent Domain in the first place. Instead of taking steps to generate organic growth within the existing buildings, we chose to wipe the slate clean all so uncreative developers could build the same crap every other city has.

    I’d like to see the BDC either abolished or significantly changed. Their failures in this town far outweigh their successes.

  • http://www.alhathaway.com Dr Al Hathaway

    As one of the Principals of Community Churches for Community Development, we stood with Mayor Rawlings-Blake in support of the project. We understand that in development assumptions and financial projections are made. Those plans are not finalized until you fully vex and test them when one seeks financing. The collective partnership has the ability
    to secure financing. The interest of CCCD is the creative of an Economic Inclusion Plan that addresses local hiring, local businesses and training for workers, MBE and WBE. We also recognize that some mediation will be necessary to bring all the parties to the table to agree upon the proper manner to commemorate the Civil Rights Sit-in. We believe that historic preservation and economic development can be compatible. We understand that the development process takes time and that jobs will come on line once all the proverbial ducks are in a row.

    In the meantime, to continue to pigeon hole this project by law suits and bureaucratic leads us nowhere. If the decision is made to rebid the project, this site may languish for another decade. Since the decision was made to move forward and to report to CHAP within a year the progress that has been made, we believe that all elements in the City should place our shoulders to the wheel and with a rigorous due diligence move this project forward. 

  • Ed Dobbins

    Be Careful in Promises

    “The developer says it will retain as much as possible of the iron and masonry facade of the McCrory buildings on Howard St”

    The same thing was said about the Grand Theater, and at the  last minute (two weeks before demolishion ) “We’ve determined that the Grand is too far gone, and cannot be saved”. Of course, after the fact it came out the the City/Library never had any intention on saving any part of the historic theater.

  • Wacko21204

     Isn’t Stringer Bell involved in this?Isn’t Stringer Bell involved in this?

  • http://twitter.com/dsmeek36 D. Scott Meek

    i know it’s all about bringing money into that space, but damn, do we really want a stupid Bed Bath & Beyond?  how revolting!

  • Curtis

    The article portrays the non-minority, out-of-town equity stake in a negative light, which I understand, but what must be understood is that equity stake in development projects come down to how much cash a partner puts up to fill the non-debt portion of development costs.  This is the golden rule:  the person with the gold rules.  Sweat equity in development is marginal and would only really apply if the smaller outfit came-up with the project from scratch or provides a key piece (ie. land).  A relatively small outfit like Dawson Company would neither want nor be able to withstand (I’m willing to guess) the awesome amount of predevelopment costs and fincial risk this project bears. 

    The city mandates local, WMBE involvement in city funded projects as a way to grow and improve such businesses, but that should not be understood by the public as “free money”.  The city goals for local WMBE will be met, and the Super Block should be given some credit for that.   

  • Klaus

    Thanks for the thorough reporting. The “jobs” and the economic development argument has been used in countless cases to demolish valuable history. As an architect I cannot competently judge the vailidity of the developer’s retail strategy. But as a planner I can see that it is closer to the original Weinberg Foundation’s approach to the Westside than the ultimately approved masterplan and the MOA which brought Preservation into focus as the Leitmotiv for the Westside. The proposed plans violate the MOA and if the developers would just adjust their plans sufficiently to make them work with the rules, we wouldn’t have this stalemate. It is really foolish to blame the preservationists for the lack of progress. Baltimore, time and again imposes rules and then abandons them when it counts. This will never bring us excellence, just foul compromises.

  • http://profiles.google.com/jamiehunt344 James Hunt

    Three aspects of this article that need further elaboration: (1) Almost all of the historic buildings on the Centerpoint project just across Howard Street  had significant chunks lopped off to accommodate a parking garage. Why is it a problem now that the same thing is being proposed at Lexington Square? (2) if downtown has a glut of retail space (mostly the smaller, oddly-shaped spaces in older buildings) what makes the author think that complete rehabs of the existing buildings would attract tenants? (3) why would a prospective big box tenant sign up for the current project before it was approved?

  • http://twitter.com/BaltoSpectator Baltimore Spectator

    The Mayor and these various groups who are backing this need to slow down and take a seriously sober, cold hard look at this.  Is this truly what the city needs right now?  Is this truly the best use of this area.  Another mega-construction development financed in part by tons of city tax incentives, that in the end will bring negligible results while the developers smile all the way to the bank.

    As usual, I GUARANTEE you, the job creation estimates are WAY OVERSTATED.  They always are!  The financial costs to the city are vastly understated.

    Big box stores? Are you kidding me?  I just don’t see a ton of them tripping over each other to set up in Baltimore.  Besides, there’s a ton of trend research showing by and large, we’re getting over our obsession with cold, soulless, heartless big box retailers. They pay minimal wages while making maximal profits.

    Baltimore should lead the way and be a front runner example of a new old kind of development.  The kind where the business and shop owners are your neighbors, not some faceless corporate HQed in another state.

    With so many fundamental issues completely out of whack in this town, we need a city government that works hard to fix our brokenness first, before kissing the feet of this developer or that.  Gimme a break already!

  • Howard

    Who cares about these piece of crap buildings anyways? They need to bulldoze the entire area and then move on to old town and demolish that mall clean out all the empty rowhouses too and announce to the world Baltimore has space to build without no bullshit just clean empty lots looking for construction. The rowhouses by Westport should go first so we could develop the nice waterfront properties in that area.

  • Jason

    sorry for being so late, but i am property owner on that streets, but not one person should care about doing anything about that block cause of the condition that it is currently in. there should be no reason for anyone to bicker about what happens to this block as far as historical value because if it meant anything to anyone they would not allow what goes on down there to continue for this long.

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