The opening of any new hotel carries a certain amount of optimism and symbolism. That went double for the March debut of Sagamore Pendry, the latest high-end hotel to open in Baltimore.
It wasn’t just the luxurious look of the 128-room hotel—complete with a steakhouse, whiskey bar, outdoor pool, and nods to horse racing, a reference to Maryland’s history of raising thoroughbreds—that made news. The building, once featured on the television show Homicide, part of the string of true-crime dramas that have given many an unsavory impression of the city, has a certain symbolic resonance, and its renovation is a signal things are changing.
It’s a sentiment the company, Sagamore Development, has channeled for Port Covington, a $5.5 billion waterfront development plan and one of the nation’s largest real estate projects. Located on the Patapsco River, this new city-within-a-city is viewed by many backers and Baltimoreans as a catalyst to raise the city’s profile and build a 21st-century economy.
Bankrolled by Kevin Plank—the hometown entrepreneurial success story and billionaire founder of Under Armour, the athletic-apparel giant and owner of Sagamore—and public funding, this site isn’t just a massive investment in infrastructure, industry, and waterfront property, though it’s definitely all those things. It includes 2.5 miles of restored waterfront, 40-plus acres of new parks, 14.1 million square feet of mixed-use development on 235 acres spread across 45 city blocks, a new 3.9-million-square-foot Under Armour global headquarters, a light-rail station, and a score of next-generation manufacturing centers and startup spaces.
According to Sagamore executives, it’s not just a Plank investment (the company is expected to invest $327.8 million in what is expected to be a total of $5 billion in public and private funds over the lifetime of the project). It’s meant to be the place where the next Kevin Plank develops ideas and builds dreams.
“We haven’t done this in a transactional way; we consider this development fundamentally important to the city,” says Tom Geddes, CEO of Plank Industries, which owns Sagamore. “What the team has put together is so significant, by the time it’s done, it won’t be thought of as the Under Armour project in the same way it’s thought of today.”
Despite being located just a few miles downriver from the Inner Harbor, a tourist attraction and model of industrial waterfront redevelopment, “this was an area that was pretty much unknown to many people in Baltimore,” says Marc Weller, president of Sagamore Development. “There were several failed attempts to develop here; even a Sam’s Club and Walmart couldn’t make it work. That’s a pretty bad sign if Walmart can’t make it work.”
Building something from nothing, according to Sagamore representatives, is a significant investment by Plank in growing both his company’s future—Under Armour, which made $4.8 billion last year after posting 22 percent growth, is rapidly expanding—and the city and community he calls home. An independent analysis found the project would create 35,000 new jobs.
A $135.9 million benefit agreement with the city, including promises to build affordable housing, provide $10 million in loans to local businesses to train the local workforce in next-generation manufacturing and technology, and hire Baltimore residents, aims to make this a new innovation hub.
While Port Covington is also a big bet by the city, which approved a $660 million-dollar Tax Increment Financing deal (or TIF) to help develop infrastructure in the neighborhood, it’s a project whose scope and size wouldn’t be possible without a private benefactor. It’s ambitions—to build a model of the life-work-play lifestyle that’s both a magnet for the creative class and an engine for local development—raise the question of whether this type of project can both provide capital that benefits the entire city’s economy and help local residents who have traditionally been left out of the “innovation economy."
This massive investment is happening at the same time as an equally ambitious plan in West Baltimore, called Innovation Village, seeks to create that same economic catalyst from the ground up.
The product of years of neighborhood organizing and redevelopment work by residents in traditionally underserved neighborhoods such as Sandtown-Winchester, Druid Heights, Marble Hill, Bolton Hill, and Reservoir Hill, this initiative measures its budget in millions, not billions. But by taking a different approach, it hopes to make a similar-sized impact.
“For years, the crime story was all people were talking about when they spoke about Baltimore,” says Richard May, the former financial management consultant and current chairman of the Innovation Village development. “You can get a crab cake here and then you get shot. But there’s so much innovation happening here, great, world-changing ideas, that have historically come out of places like Baltimore.”
According to Weller, Plank made the deliberate choice to keep his company in Baltimore, and decided to do more than simply develop the office campus-as-an-island concept. By funding Port Covington, he can not only develop talent for Under Armour and create world-class facilities, but also develop the land nearby and give a boost to the city.
With that in mind, he created Sagamore (named after his Baltimore County horse farm) as a privately owned investment company in 2012, which by 2013 began purchasing parcels of land in Port Covington.
The city sees Plank’s plan as a transformative investment. According to William Cole, president and CEO of the Baltimore Development Corporation, a city-contracted nonprofit that pushes public-private investment projects, this is a huge opportunity for the city and a chance to transform an underutilized piece of land, create tens of thousands of new jobs, and keep a marquee name in town, all while building a brand-new tax base. It’s hard to imagine a better plot of land to work with: acres of waterfront property adjacent to I-95, the busiest highway on the East Coast.
Some city residents and politicians have raised their eyebrows over the public financing for the deal, arguing about the TIF, which diverts tax revenues towards infrastructure projects, and whether it’s robbing the city of income for schools and other programs. But according to Cole, this deal’s structure makes it a good bet for Baltimore.
“It’s important to remember that the TIF is only for infrastructure,” he says. “None of this will go towards Under Armour’s campus or other private buildings [Sagamore sold the land for Under Armour’s HQ to the company, which will develop it with its own funds]. This isn’t a capital-rich city, so we need to use other means of financing to make this project possible. And without an anchor tenant, and the financial strength of Under Armour, we wouldn’t consider this a viable option.”
Port Covington’s promise, in part, lies in being a draw for the creative class, the tech-savvy, entrepreneurial workforce that every developer and city planner in the country seems to be chasing after.
It certainly will have all the hallmarks of a millennial-friendly development: Forty acres of waterfront parks; a gigabit-speed internet network; marketing by Marcus Stephens, the expert behind Under Armour’s branding, who now works for Plank Industries; as well as an array of workshops and workspaces, including the Foundery, a makerspace offering everything from CNC milling to blacksmithing, and City Garage, a 20,000-square-foot tech hub and innovation center. These are also the areas where South Baltimore residents will be able to participate in skills and workforce classes, like a new manufacturing bootcamp funded by Sagamore.
“The ethos of the project is going to be to attract the creative class,” says Steven Siegel, Executive Vice President of Sagamore Development. “This is about innovators, artisans, and craftspeople.”
Baltimore, like many cities, wants to retain its young talent (the city’s millennial population of roughly 105,000 is 17 percent of the city’s total). The city boasts more than 13 colleges and universities, including top-flight schools such as Johns Hopkins University, and needs “retention tools for young talent,” according to Cole. With so many people finishing their degrees in town, city officials want to find a way to keep them around.
According to Jen Meyer, CEO of Betamore, a local nonprofit startup incubator, it’s a serious concern. Many local tech workers see their path leading out of town.
“People who study here tend to think that if they want a technology job, they need to move somewhere else: Boston, Austin, Silicon Valley, New York,” she says. “Port Covington offers a live, work, play situation in a location where there haven’t been many options like that.”
Meyer adds that there are also a lot of underemployed locals looking for something better. Port Covington is trying to address these needs too. According to Geddes, the developers have formed a partnership with six local, high-need communities in South Baltimore that have traditionally felt disconnected from the city, providing planning input as well as job opportunities and workforce development.
“We have a real partnership with them,” he says. “This isn’t a check-writing relationship. We have an entity with a shared board, and we engage in visioning exercises with them to get their input into actions that impact their communities.”
While Port Covington follows a build-it-and-they-will-come strategy, across town, Innovation Village wants to focus more on what’s already here. The idea—linking together local community groups and schools, such as Coppin State University, and creating a web of incubators and startup support services in a roughly 1,300-acre disinvested area of West Baltimore—has begun to take shape over the last few years, with the help of roughly $7 million in state and local funds.
The capstone development will be the replacement of a decrepit and abandoned 27-building housing development infamously known as Murder Mall, which is nearly demolished, with a $100 million mixed-use project by MCB Real Estate, which will include hundreds of mixed-income apartments, retail and office space, and a 50,000-square-foot tech hub for local businesses. May hopes to create a plan that focuses on the future and economic vibrancy; that brings new life into an area full of history while keeping people in place.
“We knew this presented an incredible opportunity to get ahead of redevelopment and shape what could be on that site,” he says. “Looking back on history, especially urban renewal, it’s important for neighborhoods to realize that once it’s built, it’s hard to get it removed. It’s hard to move something if it causes a problem.”
May says the way to holistically develop, and avoid gentrification, is to focus on a first wave of companies that aren’t just profit motivated, but also purpose motivated. Companies such as Conscious Venture Labs (which received $100,000 from the city), which are focused on nonprofit work or workforce development. At the epicenter of the neighborhood where Freddie Gray lived, he says, we need to help locals be a key part of turning ideas into businesses. Everyone matters, and everyone has talent, and everyone should participate.
The backbone, however, is outreach and partnerships. May and the Innovation Village team are working with schools in West Baltimore, as well as pushing and promoting restaurants, small businesses, and neighborhood-level retail. This boots-on-the-ground push, and the cultivation of relationships, recalls one of the city’s more complimentary nicknames: Smalltimore, a reference to its close-knit population.
“It’s not just the innovation economy and the creative economy that we need,” says May. “The regular blocking and tackling of small businesses is also part of the plan.”
“Innovation Village has found a way to create a destination, not in a building but in a neighborhood,” says Cole, the president of the Baltimore Development Corporation. “These are areas that have struggled to attract development, and retail has lagged behind. There’s plenty of housing stock, but no jobs for those who live there. Now, people don’t have to go to a new neighborhood to find a place to work.”
While both developments work at different scales and take different approaches, their proponents see them as complementary more than anything else. May anticipates that many of those who work and learn in Innovation Village will eventually be hired for a job at Port Covington. There’s plenty of room for collaboration between both developments. It’s all about activating all of a city’s talent.
“We have 400,000 African Americans in Baltimore, and three out of four people self-identify as people of color,” May says. “We need to make sure, if we’re living in a democracy, that the economy works for a majority of the citizens a majority of the time.”