Baltimore's Port Covington development team will begin the next phase of construction on the waterfront revitalization project with more than 1 million sq. ft. of residential, retail and office space after finalizing a $650 million financing deal.
Construction on the massive, mixed-use development had begun late in 2019 on the project's $500 million first phase of building. The team suspended work on the once-industrial South Baltimore riverfront site in April to protect worker safety during the coronavirus pandemic.
But closing on the next phase's financing — which included $137 million in tax increment financing (TIF) bonds — ensures that the project's momentum has not been lost, those involved with the 235-acre undertaking said Jan. 5.
"The TIF bond sale was met with overwhelming demand, and the overall deal successfully closed, which is significant proof of institutional investors' belief in the future success of the project," Kevin Plank, Under Armour's founder and a partial owner of the land through his Sagamore Ventures, said in a statement. "We are thrilled about this important milestone, and what it means in validating our vision."
Supporters of the redevelopment have long held that investment in Port Covington will activate the largely fallow swath of land along East Cromwell Street site on the Patapsco River's Middle Branch, creating jobs, public parks and economic stimulation. Already, several potential tenants have posed laying the groundwork there for a cybersecurity hub dubbed "Cyber Town USA."
City officials in 2016 approved a controversial tax increment financing deal, Baltimore's largest ever, in which the city will float $660 million in bonds to build infrastructure over the course of the project's construction and the developer will repay the bonds through future taxes. In 2017, New York investment bank Goldman Sachs invested $233 million and became a partner in the development.
The team has committed to supporting affordable housing and reinvestment in Port Covington's surrounding communities. In conjunction with the closing, the developers granted $9 million to the South Baltimore Seven Coalition, a neighborhood group composed of Brooklyn, Cherry Hill, Curtis Bay, Lakeland, Mount Winans and Westport, according to the development team's Jan. 5 news release.
Mike Middleton, chair of the South Baltimore Seven, said in a statement that the closing brings each neighborhood a step closer to receiving more resources.
When Baltimore officials approved the TIF financing plan, the developers entered into an agreement with the city to commit $100 million to fund education, workforce development, community initiatives and other area priorities. With the $9 million included with closing the financing, the Port Covington team has funded more than $19 million toward its commitments to date, according to the release.
"There are many things to be proud of, but what rises to the surface most is the emphasis the team has put on equity and diversity of participation in the project — minority owned businesses, women owned businesses, local hiring, and all the jobs that are being created," said Marc Weller, whose Weller Development Co. is overseeing the work, in a statement. "We have worked alongside the South Baltimore community for years to ensure that the rising tide of Port Covington does in fact lift all boats in Baltimore."
Plank's Sagamore Ventures, a lead investor in Port Covington, began assembling land about five years ago for a "mini-city" to be anchored by a new corporate campus for Under Armour. The sports apparel brand has its headquarters in Locust Point but maintains offices and a small manufacturing facility in Port Covington.
The neighborhood also is home to Plank's Sagamore Spirit whiskey distillery and tavern, Nick's Fish House, City Garage, Impact Village — a complimentary office space for startup businesses — and The Baltimore Sun, which has a long-term lease with the developer for its newsroom and printing plant.
The next phase of development includes five buildings, a portion of what eventually is planned to include 18 million sq. ft. of development, with 2.5 mi. of restored waterfront and more than 40 acres of parks and green space, according to the development team.
The team consists of investors Sagamore Ventures and Goldman Sachs Urban Investment Group, developer Weller Development and builder Whiting-Turning Contracting Co., headquartered in Baltimore.
Margaret Anadu, managing director and head of the Goldman Sachs Urban Investment Group, said the project's focus on strengthening its neighboring communities sparked the bank's interest.
"What's different here, is you have the clear, binding, long-term commitment not just with one community, but with several," she said.
Tenants could begin moving into the spaces as early as 2022, the team said.
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