During An Unprecedented Year, A Baltimore Development Team Launches A Transformational Project And Keeps Its Promise To The Community
In 2016, the Port Covington Development Team, which today is composed of lead investors Sagamore Ventures and Goldman Sachs Urban Investment Group and lead developer Weller Development Co., made a promise to the people of Baltimore: It would revitalize the formerly industrial waterfront and bring new residences, retail, office space, and job opportunities to the area by redeveloping a sprawling 235-acre piece of the waterfront neighborhood of Port Covington.
Construction on the project infrastructure for Phase 1 of the development kicked off in 2019. Then, the coronavirus pandemic halted momentum.
Now, despite the setbacks due to the pandemic, the team recently secured the financing it needs to move forward with the project and keep its promise to the city.
“Port Covington is a long-term, bold vision for helping to build a better Baltimore,” Kevin Plank, founder and executive chairman of Under Armour and one of the lead investors in Port Covington, said in a statement. “The TIF bond sale was met with overwhelming demand, and the overall deal successfully closed [on Dec. 30], which is significant proof of institutional investors’ belief in the future success of the project. We are thrilled about this important milestone, and what it means in validating our vision. Port Covington will have a fundamental and far-reaching impact on Baltimore’s future.”
The financing package, totaling more than $650M, comes from lead investors Goldman Sachs Urban Investment Group, Sagamore Ventures and other investors, and includes tax increment financing bonds, opportunity zone equity and various debt sources.
For the Port Covington Development Team, the financing represents the faith that investors have in the project and the revitalization of South Baltimore.
“To close on such a massive project in the middle of a pandemic demonstrates the power of our community partnerships as well as the strength of our team and the merits of this project,” Weller Development Co. founding partner Marc Weller said. “We’ve been waiting for this moment for years and can’t wait to get started on this world-class neighborhood destination.”
Phase 1 of the development project was paused due to safety concerns during the pandemic, but Chapter 1B, which is what the team is calling this next phase, is already underway.
It involves constructing more than 1.1M SF across five buildings expected to be delivered in late 2022.
“Pulling together more than $650M in financing was certainly not easy, but for a project like this it just makes these milestones even sweeter,” said Margaret Anadu, managing director of the Goldman Sachs Urban Investment Group, which spends over $1B annually in community and economic development through real estate projects, social enterprises, and lending facilities for small businesses. “This is a project that is going to change the trajectory of not just the site itself, but the surrounding communities as well.”
Combined, these buildings will offer 440K SF of office space, 586K SF of residential space, including 89 affordable units, 116K SF of retail space and more than 1,000 parking spaces. Chapter 1B will also include the revitalization of 10 acres of parks and public space, reconnecting residents and visitors to a previously underutilized area of Baltimore’s cherished waterfront.
The Port Covington Development Team notes that this project is about much more than creating new shopping, residential and office destinations to attract new tenants to Baltimore, it’s about finding ways to better the community. In 2016, the Port Covington team signed a Community Benefits Agreement with the South Baltimore 6 Coalition — now SB7 with the inclusion of the Port Covington neighborhood — a nonprofit organization that represents the South Baltimore communities of Brooklyn, Cherry Hill, Curtis Bay, Lakeland, Mount Winans and Westport. The team also entered a memorandum of understanding with the city of Baltimore.
These measures outline how local communities will share in the benefits of redeveloping Port Covington, including receiving more than $100M in funding for workforce development, education, economic development, SB6 local community benefits, affordable housing and more.
"This closing on the tax increment financing funds culminates four years of partnership and collaboration between the Port Covington Development Team, Weller Development Co. and the six communities of SB7," said Mike Middleton, chair of the South Baltimore Seven Coalition. "The future looks brighter each day for our communities and Baltimore City as we bring additional resources to the table to make a dream envisioned four years ago a reality.”
So far, the Port Covington team has funded more than $19M toward its CBA and MOU agreements.
“It is exciting to see this transformational project moving forward despite the many challenges the global pandemic brought this year,” Maryland Gov. Larry Hogan said in a statement. “This project has the potential to bring tens of thousands of new jobs into the region and create significant economic growth not only for Baltimore City, but our entire state.”
Many businesses, nonprofit organizations and destinations are already located in Port Covington. These businesses include Under Armour, City Garage — a former city maintenance garage that now functions as an innovation hub housing coworking spaces and startups — and Impact Village, which provides complimentary office space to startups and nonprofits whose work positively impacts the community. There are also restaurants, parks, marinas and a whiskey distillery.
With this new phase, the development team seeks to expand its office ecosystem of thriving companies and capital to create a catalytic effect, spurring growth and opportunities in Baltimore City by leveraging the region’s concentration of talent, while adding a mix of uses to create a vibrant urban neighborhood.
The Port Covington team has also been working to help the community during the pandemic, coordinating with local project stakeholders on food and essential supply response and connecting Baltimore City agencies, hospital networks and nonprofits with personal protective equipment manufacturers and sanitizer producers. The team also provided rent-free space for CityWide Youth Development to produce masks and gowns.
While the Port Covington team has managed to accomplish the feat of raising funding and moving forward with construction in the middle of an unprecedented year, their work is far from over. Once it is fully completed, the entire Port Covington peninsula is planned to include up to 18M SF of new, mixed-use development, with two-and-a-half miles of restored waterfront and more than 40 acres of parks and green space.
This article was produced in collaboration between Studio B and Port Covington. Bisnow news staff was not involved in the production of this content.
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