Quiet start, noisy debate
Stealthy at first, Port Covington plan ended up front and center
A large waterfront parcel in Port Covington sold for $2 million in 2012 to an investor who declined to identify himself.
Then a second large property sold nearby. Then a third. Each time, the investor’s identity was hidden behind hard-to-trace limited liability corporations.
Speculation abounded. Who was the mystery buyer? What was being planned in South Baltimore?
Keisha Allen, head of the nearby Westport Neighborhood Association, fired off a letter to her city councilman that foreshadowed the fights to come.
“When it’s time to sit down with this developer … you need to make sure we have a seat at the table,” Allen recalled writing. “I knew it was going to be big. I just didn’t know it was going to be that big.”
Four years later, legal entities connected to Under Armour CEO Kevin Plank have spent more than $114 million to purchase more than 150 acres on a partially vacant peninsula jutting into the trash-filled Patapsco River’s Middle Branch.
Plank’s Sagamore Development Co. has come out of the shadows and launched an unprecedented campaign, pushing for a $5.5 billion redevelopment, home of a new headquarters campus for the nation’s No. 2 sports apparel company.
After the secretive start, plans for the development have advanced publicly and loudly. On Monday, the Baltimore City Council is poised to give final approval to $660 million in bonds that would pay for
public infrastructure in Port Covington, where Sagamore plans restaurants, shops, housing and manufacturing space. The developer would have to repay the bonds through future taxes.
The decision, like a preliminary vote last week, is expected to go heavily in Under Armour’s favor. Mayor Stephanie RawlingsBlake has said she would sign legislation authorizing the bonds.
Some observers marvel at how efficient Plank’s team has been at winning over community members, religious groups and politicians since announcing the redevelopment in early 2016. Even other Baltimore businessmen — who sometimes fight over whether each other’s projects would cannibalize the market — have enthusiastically endorsed Port Covington.
“I can sum up my feelings in one word: It’s a miracle,” said real estate developer David S. Cordish, the man behind Maryland Live Casino.
While Plank has not personally attended City Council hearings on the issue, his development team is acting on his wishes, said Tom Geddes, the CEO of Sagamore parent company Plank Industries.
“He’s given his input on planning and design. He’s given direction for robust community benefits,” Geddes said of Plank. “This is definitely his vision. The commitment to the city comes from him.”
The pace of Under Armour’s growth has been rapid.
Plank launched the company from his mother’s basement in Washington in 1996, before moving to Baltimore. After outgrowing a few smaller spots, Under Armour set up shop in the Tide Point complex in Locust Point, recalled developer Bill Struever, who previously owned the former detergent plant that serves as the brand’s headquarters.
“They had a little place in CamdenCarroll when they were just getting started,” Struever said. “It wasn’t too long ago they were just a few people.”
Even then, other cities were trying to lure Under Armour away, said M.J. “Jay” Brodie, who as longtime chief of the Baltimore Development Corp. tried to find a home for Plank’s company.
“They were clearly being wooed by other cities,” Brodie said. “We thought it was very important they find a future home in Baltimore.”
Birth of an idea
In 2008, the company projected that it would outgrow its Tide Point headquarters in about five years. Company officials considered moves to other sites — including an industrial swath of the Middle Branch called West Covington and an expansion in Locust Point, near its current headquarters — but business and property owners fought those efforts.
“They were trying to do acquisitions, but the process became stalled with politics and zoning,” said Marc Weller, Sagamore Development’s president, who previously worked in the Washington real estate market. “There was an unwillingness of certain tenants to sell at prices that were reasonable. Kevin called me out of the blue, and said, ‘Marc, I’d really like to talk with you about the future of Under Armour.’”
Eager to stay in Baltimore, Under Armour officials printed out aerial maps of the city to look for open space.
“It became incredibly obvious Port Covington was ripe for development,” Weller said.
But to make the plan work, they needed to move quickly and quietly, the developers said. If sellers believed the properties were needed for an Under Armour campus, they likely would jack up the price, Weller said.
“The use of names and addresses that didn’t tie back to Kevin was all very intentional,” Weller said. “We wanted to be successful in acquiring as much as possible as quickly as possible.”
Assembling property
Companies discreetly owned by Plank purchased his first Port Covington property at a foreclosure auction. A Plank-owned whiskey distillery is now under construction on that site. His second purchase, 101 W. Dickman St., reopened last year as the City Garage incubator and event space. The third, a roughly $35 million deal revealed in January 2014 that included a Walmart and a former Sam’s Club building, made it clear that someone was assembling property in the area.
Later that year, a Plank entity bought a 60-acre property there that includes the site of The Baltimore Sun’s printing plant from the newspaper’s former parent, Tribune Media, for $46.5 million, more than twice the $21 million it was valued for tax purposes. The Sun has a long-term lease for the property.
As its plans moved forward, Sagamore continued to consolidate its hold on the area, negotiating rights of way and ground rents, and picking up many of the remaining parcels, including six rowhouses that sit in the shadow of Interstate 95 on West McComas Street.
Some of those residents, like Joseph Meyers and his wife, Sandra, are now Plank tenants. They said they have confidence in their new landlord, pointing to freshly cut grass and flowers that now dress up the block.
The transition occurred as Sandra Meyers was diagnosed with cancer, and the couple credits Sagamore with relocating them to a better property on the block and accommodating the strain on their finances.
“We’d be on the street right now if it wasn’t for them,” said Joseph Meyers, 55. “When I see that stuff on TV about whether they’ll take care of people — I know they will.”
Businessman Russell Johnson, the former president of Atlantic Forest Products, was involved in the sale of a parcel to Sagamore last year. He said Weller’s approach was preferable to past efforts to develop the area.
In 2008, when the city proposed to take properties in the area by eminent domain, some businesses lawyered up and blocked the attempt, Johnson said.
“His whole approach was much different, much better,” Johnson said of Weller. “I think that kind of changed the business owners in that area to ‘Let’s talk to these people.’ ”
In an interview with The Sun last year, Plank said his interest in real estate was first piqued by a conversation with Orioles owner Peter Angelos.
“I’m not going to have a great campus unless I have a great city that surrounds it,” Plank said. “We’re not saying Baltimore needs Under Armour but Under Armour can certainly help Baltimore . ... Individually I don’t think this land is particularly valuable, but when you put them all together and you have the assemblage in one place and the ability to literally paint a vision, the land gets exponentially more valuable.”
Gathering support
But Plank couldn’t accomplish his vision without community and political support.
Plank representatives spent hours meeting with business and community groups as well as political leaders across the city, courting their support. Some came around slowly, while others, such as the Downtown Partnership, quickly rallied, citing Under Armour’s importance to the city.
His team launched an advertising campaign to influence public opinion that analysts estimate has cost more than $1 million — including more than $500,000 in television and radio commercials, plus advertising in The Sun and a robust social media presence.
When details of the plan started to trickle out, businesses in the area were on alert for signs that the development might cause problems the way residential growth in other industrial zones had, said Rusty Erdman, chair of the South Baltimore Business Alliance, a coalition of largely industrial firms.
“There was polite dancing and posturing at the table to try to figure things out. Were we their enemy or were we their advocate? There was some head bumping at the beginning,” he said.
“We’d have loved to have seen it stay completely industrial, sure, but that’s not a reality anymore. I think this is really a win-win for the city overall.”
Steven A. Siegel, vice president of Sagamore, said plans for the development have evolved as community members provided feedback.
“We started with our neighbors and incorporated ideas,” he said.
After weeks of meetings with community associations near Port Covington, such as those for Cherry Hill and Westport, a $39 million community benefits agreement was reached with six neighborhoods near the project.
But as the size of Sagamore’s bond request sank in, a larger citywide fight over the public financing broke out. Community and labor activists led by the nonprofit BUILD questioned whether Plank planned to build yet another white, upper-class enclave using city money without helping the rest of the city.
Even as activists publicly voiced skepticism and opposition to the project, they joined city officials in negotiating with Sagamore and, this month, a $100 million citywide benefits agreement was announced. The deal includes $25 million to train workers at a new Port Covington training center and $10 million in nointerest loans or other funding streams for minority- and women-owned startups.
Seeking mutual benefit
Allen, of Westport, said the six South Baltimore neighborhoods were determined to strike a deal with Plank that benefited the community. She said poor and middle-class people were left out of previous development deals, like the one the city struck with the developer of Harbor Point.
She praised Sagamore, saying they had been “better communicators than the city.”
“Some residents and some elected officials have pretty much deemed us redheaded stepchildren of the city. We don’t get resources trickling down here,” Allen said. Now, “people no longer take us as a joke.”
The developers have agreed to hire at least 30 percent of all infrastructure construction workers from Baltimore, pay at least $17.48 an hour, and set aside 20 percent of housing units for poor and middle-class families, though 40 percent of that housing may be built elsewhere in the city.
Critics call the affordable housing agreement weak. It requires 10 percent of Port Covington’s affordable units to be built for people who make less than $26,000, and contains what critics call a “loophole” that allows the developer to pay money into a fund instead of building the units.
And they argue that a subsidized development should pay “prevailing wages” — several dollars higher than proposed — on all construction jobs, and living wages thereafter.
Charly Carter, director of Maryland Working Families, a progressive political organization protesting the tax deal, said the community benefits agreement isn’t as good as it sounds.
“When you unpack the numbers in this $100 million proposal, it’s just not there,” she said. “They have the ability to buy their way out of affordable housing very cheaply. There are no guarantees about permanent jobs . ... If we are investing our money, we should invest in good-paying jobs.”
Geddes said the development team has tried to be as inclusive as possible.
“There’s no way to make everybody happy,” he said. “There are economic realities. The line we have to walk is between maximum inclusivity on the one hand and economic viability on the other.”
Baltimore officials, including RawlingsBlake, are happy. She said the city has engaged in efforts to keep Under Armour in Baltimore for years. And she’s impressed with the way communities near Port Covington have advocated for themselves.
“I’m pleased the plans are moving at a good pace,” Rawlings-Blake said. “The city is making significant investments to make this project happen. At the end of the day, we all benefit.”