PUBLISHED ON DECEMBER 20, 2004
© 2004 - THE BALTIMORE SUN
A partnership between a publicly traded Cleveland company and a group that includes three prominent local minority builders has been selected to develop the first phase of a major East Baltimore redevelopment project centered around a biotech park.
Forest City-New East Baltimore Partnership LLC - a group that includes Forest City Enterprises and minority builders Ronald H. Lipscomb, Dean Harrison and Kenneth Banks - was selected over two other finalists to turn a blighted, 30-acre swath north of the Johns Hopkins medical complex into a mixed-use community with life sciences buildings, retail space, and new rowhouses and apartments. A & R Development, another well-known minority firm, will assist in the construction of 850 housing units but will not have an equity stake, officials said.
A formal announcement of the selection of the developer for the project - expected to take 10 years to complete and be worth $500 million - is scheduled for this morning at the offices of East Baltimore Development Inc., the nonprofit set up to oversee the effort.
"We are now in a position to begin the development of the community that we promised when we began this planning process" in early 2001, said Jack Shannon, president and chief executive of East Baltimore Development.
The biotech project is being counted on not only to transform a decayed area of the city whose downward momentum has defied previous efforts at revitalization, but also to boost employment by providing up to 8,000 new jobs.
Forest City, a well-established real estate owner, developer and manager listed on the New York Stock Exchange, says it has total assets of $5.9 billion. Among the company's best-known projects are University Park at MIT in Cambridge, Mass., and Stapleton, a huge residential and commercial development in Denver.
Lipscomb, the head of Doracon Contracting, is involved in projects ranging from the Spinnaker Bay luxury condominiums in Harbor East to the conversion of the historic Railway Express building to loft apartments in the Station North Arts District, with which Banks is also involved.
Harrison's projects include the Zenith, a luxury apartment tower planned for downtown, and an industrial complex on the site of the demolished Hollander Ridge public housing project off Pulaski Highway near the Baltimore County line in East Baltimore.
A fourth member of the group is Dan Wilkinson, a defensive tackle with the Detroit Lions who played five seasons with the Washington Redskins.
The Forest City team was chosen in part because it offered a higher price for the land - $6 million, payable in 10 guaranteed yearly installments of $600,000 each - than the other two teams that were under consideration, Shannon said. It is anticipated that most of that money would be used to finance property acquisition for the second and third phases of the project, which covers a total of about 80 acres, he said.
Other factors that swayed the selection were the Forest City team's willingness to put $2.5 million in escrow to be paid if it doesn't meet the deadlines for the development and its plan to create and maintain three acres of open space throughout the project, Shannon said.
Although Forest City will own the five planned life sciences buildings, the city and East Baltimore Development will receive additional funds if their rental payments exceed certain benchmarks, according to Shannon.
Construction of the first biotech building could begin by the middle of next year and be completed by the end of 2007, along with most of the housing units. The remainder of the life sciences buildings would be completed by 2014.
The project would also include three community buildings, three parking garages with a total of 2,300 spaces, and some 80,000 square feet of retail space, mostly on the ground floor of the garages and biotech buildings.
The city and East Baltimore Development have already acquired more than half of the 874 properties in the first phase of the project - many of which are boarded-up and bricked-up homes and vacant lots - and are gaining title to the rest.
Included are 16 vacant properties purchased from Kennedy Krieger Institute for $47,300 and 102 properties that are being donated by Johns Hopkins.
About 260 properties in the first phase of the development were occupied, and residents in about 60 of them have been relocated outside of the path of the development.
Plans call for wholesale demolition of the remaining buildings in the first phase of the project, with the exception of a handful of historic properties.
The city had begun razing properties on the site of the first biotech building - a block bounded by Madison Street on the south, Rutland Avenue on the west, Ashland Avenue on the north and Wolfe Street on the east. But demolition was halted last spring after concerns were raised by members of the community about health hazards, primarily from lead dust.
East Baltimore Development and the city are working with the community and health officials to develop a set of procedures that would minimize such risks, Shannon said.
The Forest City team will receive no direct public subsidies for the development but would make use of federal low-income tax credits and public housing development funds, he said.
Of the housing to be built, plans call for the units to be split equally between low-income units, moderate affordable units and market-rate units.
"This team offered home ownership as well as rental opportunities in each of those areas," Shannon said.
Besides the Forest City-New East Baltimore Partnership, the other two finalists were a group led by Republic Properties Corp., a privately owned Washington development firm, and a team headed by Massachusetts-based Lyme Properties that included local developer Struever Bros., Eccles & Rouse.
The three finalists were selected in June from a group of seven.