Friday, July 29, 2016

Start-ups, diversity and oysters

With the rambunctious proclamations made at yesterday's Port Covington hearing still in my ear, I wished the pastors dividing the world so neatly into us and them  could see how diverse millennials and young entrepreneurs can be. That was on display when Baltimore start-up community members networked at Spark, a place providing space for parts of the Baltimore Start-up Eco system that opened here in January as a part of Village Capital. The event, presenting a nationwide cohort of 2016 education start-ups, had its own hashtag #vilcapEdUS and featured nuts, oysters, fingerfood and beer and wine.

The international group Village Capital is in a partnership with Johns Hopkins and has recently selected Baltimore as a location for a branch office (Spark). 
Opening of Sparks in January 2016

The partnership is part of the firm’s VilCap Communities program, which focuses on cities with emerging startup communities that have historically been overlooked by mainstream venture capital investors. Baltimore was one of 16 cities selected for the program.
“We didn’t choose the communities we thought needed the most help, but the ones we thought were the best for entrepreneurs,” said Jared Marquette, who manages the VilCap Communities program.
Honolulu, Nashville, New Orleans, Philadelphia and Washington, D.C., are among the other cities selected for the program. (JHU Technology Ventures)
VilCap's signature is peer selection of the companies to be funded, i.e. it is making investments as decided by cohort members. The topic of the evening: Education and bridging the gap between employment and education. A more traditional term for this is workforce development, precisely one of the items the BUILD coalition wants to see as part of approving TIFs for Sagamore.
Nasir Qadree, Head of Education at Village Capital

Of course, angel capital ventures usually include also large corporations ("them"). One of the companies sponsoring certain Village Capital activities is ATT which is investing $350 million in the educational initiatives nationwide.
Today [June 16, 2016] Village Capital in collaboration with AT&T, as part of AT&T Aspire, announced the full cohort of entrepreneurs participating in Village Capital’s “Education: US 2016,” a venture development program to support early-stage entrepreneurs bridging the skills gap between education and employment.
“Education is the passport to a high-paying job, but too many students lack the academic resources and opportunities to position them for success,” said Nasir Qadree, Head of Education at Village Capital. “The 12 entrepreneurs in our Education US 2016 cohort represent the top early-stage ventures today tackling academic success and career-readiness. We’re excited to connect them with the mentors and resources they need to scale their ideas.” (ATT)
The 12 startup firms selected to join the three-month program were all present at at Spark. Each presented their start-up and its mission.

  • Centric Learning HERO is a project-based student centric learning approach that builds on strengths - a uniquely effective curriculum and teaching method.
  • College Ease is a Unique engagement and marketing platform that connects high school students worldwide with colleges starting freshman year of high school.
  • Comprendio is a cognitive mapping, accountability for learner thinking, automated feedback, and unique analytics platform to accelerate understanding.
  • Couragion inspire underserved & underrepresented youth to pursue competencies & careers in science, technology, engineering & math.
  • Education Modified delivers cutting-edge, research-based strategies and analytics for every learning need in today’s classrooms.
  • LaborX helps high need talent connect to living wage jobs.
  • Nepris virtually invites industry professionals into the classroom to bring real world relevance to curriculum topics, to help evaluate student projects and to engage and inspire students in STEAM!
  • Pairin is an essential personal and professional skills management system transforming how we work, relate and educate.
  • Paragon One is the #1 American career education platform powered by U.S. professionals-turned-career coaches
  • Skill Scout changes how companies attract and hire talent through video job descriptions and hands on interviews
  • Story2 makes college application writing easier through personal stories
  • Yenko sells financial retention software to colleges that lose tuition revenue when students drop out as a result of losing financial aid.
The presentations were followed by a panel discussion which featured Goldie Blumenstyk, Senior Writer at The Chronicle of Higher Education  as the moderator and Frank Bonsal of Towson University (Entrepreneurship), Baltimore County School Superintendent Dallas Dance and Zach Postner of McGraw Hill who discussed what works and what doesn't in pre and post secondary education.

Dallas Dance made the most memorable statements such as that "we haven't gotten our head around the fact that the last 25 years 50% of the jobs are jobs that didn't exist before", "the purpose of schooling is access", "we have to totally rethink what high school looks like" and "we are now talking about race and class in Baltimore County. If you know the histoiry of this region you can imagine how hard this is".

Topics included unbundling education, the bureaucratic hurdles of licensure  and regulations, intrapreneurs  versus entrepreneurs and a competency marketplace.

Everyone in the room seemed to be intent on finding innovative pathways forward in full recognition of race, class, inequality and uneven access. It was refreshing to see a hugely diverse group engage in finding solutions without any shrillness or vitriol and most importantly without taking the status quo for granted.

That Village Capital chose Baltimore as a location based on as it was said that it "was best for entrepreneurs" is encouraging. Even more encouraging is that following the call to start a business is no longer just heard by young white males but women and men of all colors and backgrounds. This bodes well for West Baltimore's Innovation Village.

Klaus Philipsen, FAIA


related Articles on this blog:

Innovation Village
Innovation Village- What's next?
Baltimore- "The best place to change the world"
Innovation week Baltimore
Design for Social Innovation










Thursday, July 28, 2016

What should be the Port Covington Litmus Test?

Once again the setting and timing was dramatic. In front of City Hall a small group of protesters of the Black Lives Matter movement. An angry State's Attorney had seen herself forced to drop all charges against the Freddie Grey officers.
Inside the War memorial (behind the steps on which Marilyn Mosby had announced the charges) up to 800 people were listening to the questions and answers of the Baltimore City Council's Finance Committee hearing about the bill for the Port Covington TIF application. When finally, hours into the deliberations, the floor was opened to public testimony it was after 8pm.
A packed audience in the War Memorial Hall

The first to speak was the consultant of TischlerBise, Macolm Munkittrick, an analyst who had reviewed the TIF application on behalf of BUILD. His conclusions were that no market analysis was done, that the operating costs of the City in the proposed development were "underestimated", that Public Capital cost outside TIF are not included and that it would be prudent to represent several scenarios not just one baseline case as Sagamore had done. He cited an example of one of their own analysis they had done in a similar case where they had used "stress tests with four scenarios". Overall, though, the analyist concluded, the project could very well be "transformative" and would "likely have benefits for the city". Pressed by Councilman Costello whether the analyst attempted to speak to those involved in the TIF process, be it BDC, Sagamore or MuniCap, the other reviewer of the application, the analyst got testy. "We shouldn't have to do this". Applause from the hall. Then he added, "we have never seen something like this before". More applause from those in the crowd with the blue BUILD T-shirts. Sagamore supporters in their yellow T shirts seemed to be outnumbered.

Those were all good points, professionally presented and extremely helpful for the full array of council members present (all except Nick Mosby).

Then the tone changed when the BUILD testimony was continued by Reverend Glenna Huber. "Here we go again", she began, "It is as if Baltimore has its own version of Groundhog Day." She allueded to the promises made and then continued: "They said the same thing when the built the Inner Harbor, Harbor East and Harbor Point. We are still waiting for promises that were never fulfilled. It is impossible to trust when you have played so many times."  Thundering applause. Addressing the council members she asked: "Are you going to stand this time to support the tax paying residents? Under Armour says We protect this House. Who is going to protect this house that we call Baltimore?" She mentioned the Harbor East cost overruns and recent TIF increase, demanded 20% affordable housing and repeated her call "on you to stand up". Finally her testimony heightened to the type crescendo that only pastors and a few Convention politicians master, the perfected oratory that brings the crowd to their feet and clap until the words were drowned out by the noise of the cheering and the the speaker overtaxing the sound system.
"Say no until it is clear how this affect me and our city for the next 41 years," is a BUILD demand, until Johnston Square, Harlem Park, and Oliver are included. "We are here to stand up for those in the invisible communities." said BUILD pastor Calvin Keene. "Hold off until the whole of Baltimore can benefit."
The almost complete City Council

 The ACLU representative at the hearing went far outside her expertise with the statement that "this is a fiscally irresponsible proposal". She repeated the observation that there was no market analysis. Those comments overlook the fact that the developer will invest billions and is the first who would want to avoid fiscally irresponsible endeavors. It isn't the ACLU that has made Under Armour into the successful enterprise it is, so how is it that the civil rights organization wants to teach Sagamore and Kevin Plank capitalism?

Of course, as a plaintiff in the housing consent decree reached with Baltimore Housing, the ACLU is rightly interested in the inclusionary zoning law that she admitted "is weak" but, as she said, not as weak as reported. "The city can use any source to fund affordable housing" she said, including the TIF itself. A notion that Sagamore's attorney Jon Laria disputed.

At a recent event about Port Covington Barbara Samuel of the ACLU had this to say (according to the Baltimore Brew):
“They want that first $64 million ASAP and the only use for that ‘tranche’ is parks – not streets, not sewers, not streetlights,” she said. “Oh, and an archaeological pier. Does anyone here know what that is? I don’t.”

It is easy to rile the masses with populist arguments, Sanders and Trump have shown this in recent months. Unfortunately groups like BUILD and the ACLU are on that bandwagon as well.
There are plenty of populist arguments one can make about the Port Covington development. Such as the comment about the first tranche going to parks, an archeological pier and the much maligned kayak landings. The height of frivolous spending, right? 

Sagamore's Mark Weller (first row, third  preson from the right) listens to
testimony
But if you look at the DC Navy Yard redevelopment at the Anacostia River, that is exactly how they started. With a very good park that became an amenity for the entire community! Beginning brownfield redevelopment with a public amenity that creates a "there" there is a widely used best practice and by no means frivolous.

Likewise, the archaeological pier is about the industrial history of the place. Is that bad? Kayaking in the Harbor is considered "cool" by many. Does it take anything away from anybody to have them accommodated on piers that are built anyway?

The question the City Council should ask themselves is this: Would any part of Baltimore better off if the TIF would not be granted and if Port Covington would not be built? That should be the litmus test or as engineers sometimes say, the "fatal flaw" inquiry. If the answer is yes, then the deal certainly needs to be held off.  Even with all costs properly accounted for, the City should not have to carry any new burden from the new development.

The next set of questions question should be about specific benefits agreements and about the overall City benefits. Will the surrounding disinvested communities benefit and are those benefits sufficient? Will the City overall see a benefit in revenue, how and when? Will Baltimore grow, will it become more competitive? The application and the MuniCap report answer these questions but only for one scenario. How would other scenarios look like?

Yes, those Sagamore provided "numbers" need scrutiny, especially the issue of "operating cost" for the city (snowplowing, trash removal, road repairs, policing etc.). Yes the TIF is "front loaded". That is why it is requested in the first place: The high up front cost of clean up, piers, bulkheads, streets and utilities cannot be yet paid from any type of existing revenue stream coming from the development. While it is the whole point of the TIF to finance these costs without using city funds, the fact that the repayment of bonds relies for a long period on assessing special taxes within the taxing district of the development is disconcerting. A high quality design is certainly desirable to ensure the long-term value proposition but the burden should only be such that the regular tax proceeds of the tax district should pay the bond bills, not extra assessments, at least not in the base-line scenario. Extra assessments should be left for the worst case scenario. Taxes on top of the already high City tax burden would make it far less likely to create sufficient demand to fill all the envisioned stuff.

The totally understandable desire to have those same investments made in disinvested communities lacks reality because an investment there wouldn't be followed by revenues to pay for them. Those revenues only materialize if some folks with money move in. That, too is a characteristic of a TIF, it can't be used where there is no market and no increased tax revenue stream. Yes, the new community of Port Covington should be diverse and inclusive. To find the right measure of inclusion affordable housing needs to be part of the mix. But the balance needs to be such that there will be enough revenues generated to pay the bonds. Plain and simple. 

Loading up the cost side too much won't work, neither will dumbing down the project too much in order to reduce cost. The only way such a large development can work is by providing something that is competitive and better than anything else in the region. To have a strong investor willing to put a large chunk of many into it is indeed an ideal starting point for excellence. A situation many other places wished they had.

Klaus Philipsen, FAIA

Baltimore SUN article
BBJ article

Wednesday, July 27, 2016

State Center Show Down

State Center is the name of a Baltimore Metro stop and it is the State of Maryland's largest agglomeration of State offices. It is also an example of failed urban renewal in that it planted isolated office buildings on 28 acres at the critical seam between neighborhoods and downtown that had the effect to separate areas instead of connecting them. It may soon become an example of a failed private-public partnership (P3).
State Center rendering (Howard Street LRT in the foreground)

It was under Governor Ehrlich and his Secretary of Transportation, Bob Flannigan, that the desire to utilize State assets such as land and transit to highest possible extent reached new buoyancy. Making better use of State owned land near existing State owned transit makes a lot of sense. It falls into a development category called transit oriented development (TOD). State Center is a prime example for a potential TOD.

Plans for a redevelopment that keeps the State offices, knits the communities more tightly to Mount Vernon and Midtown and eliminates the vast dead surface parking areas in favor of a potentially vibrant mixed use part of town that feels more like a neighborhood have been developed for over ten years. An agreed upon plan sits on a shelf since 2014.

The redevelopment plan would build a dense urban center on the State-owned land, the State would maintain the property of the land but the development would be privately-held mixed-use of 2,000 residential units, retail and 2 million square feet of office space. The state would lease back the necessary office space at an estimated cost of $18.5 million a year (BBJ).

The development team has been in limbo since 2014 when Governor O'Malley left the decision about this project to his successor after various lawsuits by Peter Angelos were dismissed. Angelos had alleged wrongful award of the project to the selected development team and was generally opposed to it because of the expected competition with his downtown office space.
State Center aerial: location plan: Offices in a sea of parking

Governor Hogan, although winning his election under the slogan "Maryland, open for business", has left the matter dangling, even though the development team reportedly has been patiently waiting, stating it was still ready to go.

According to the SUN, the project is now in conflict mode, meaning that the development team is ready to sue the State for not following up on the P3 agreement. A necessary step is "mediation", i.e. the developer and the State government will try to hash out their differences starting tomorrow.

The timing for coming to a positive conclusion may be unfortunate as this process overlaps with the Council hearings on Port Covington beginning today. That much bigger project and its large Tax Increment Financing (TIF) has renewed anxieties in certain circles about public private collaboration and anything that smacks of public subsidies.

However, the State Center project does not ask for any TIF  and the only City tax break it would provide is in form of a PILOT for the State uses only.  The State complex currently pays no property taxes at all. Opponents of the project, which is supported by the surrounding communities, allege that the State would pay inflated office lease rates after the project is complete. The developer maintains that the calculated rates are just regular market rates.

Clearly, the State's lease back guarantee is what makes the project work and allows building a much more ambitious project than a State funded renovation of the current office buildings would be. Since the current offices are functionally obsolete (i.e. they need a major overhaul), a private public partnership like the proposed State Center deal has many upsides for urban planning, transit utilization, the State and its employees and the City, which will finally receive tax benefits from the large swath of land.

Alternatives for the State include leasing office space elsewhere or building their own facilities elsewhere, each of those options would be a major blow for Baltimore, unless it were to occur in a city location that hasn't been suggested to date.

Still hopeful that the project may go forward, the State Center developers signed a community benefits agreement in the spring of this year. The Community Law Center helped community groups to form the State Center Neighborhood Alliance a few years back. The center also assisted the communities in negotiating the community benefits.
That agreement requires community involvement in the refinement of plans, improved access to transit, community jobs and environmentally sensitive construction as well as financial support for certain community-led projects.
Just in case Governor Hogan will actually continue what Governor Ehrlich had begun and give the project finally a green light. Actual tangible support for the City. Why am I not holding my breath?

Klaus Philipsen, FAIA

see also previous article on this site:
Why the State Center is a good idea

Tuesday, July 26, 2016

West Baltimore 23 years ago.

The request for design services for a house on Fulton Avenue came in when I didn't know that this address was located in Sandtown, nor did I know that most of historic West Baltimore would be considered a "ghetto", a term liberally thrown around when describing the disinvested poor neighborhoods in the American city.  This was in 1993 and I had been in Baltimore for seven years. Many people lived their whole life in the Baltimore region and have never set foot into Sandtown.
Mural (Getty images)

Back then Sandtown had advanced to being an urban model. Developer Jim Rouse who had in retirement created the Enterprise company with a strong social agenda wanted to show that "if you can fix Sandtown, you can fix any community in America". I had met with him and came away with the impression that he was certainly very serious about the need to eliminate extreme poverty in urban America should US cities have a future.

It is hard to say whether in 1993 Sandtown looked better or worse than today, in spite of millions that were invested since then, from installing a green median on Fulton to new senior housing, many rehabbed and new homes and the demolition of many dilapidated structures. (see also 2013 Abell Report).
“Overall, the picture that emerges from the data underscores the durability of social inequality and the persistence of overlapping social problems in high poverty and racially segregated neighborhoods.” (Abell Report)
Many houses are stately, then and now, some are even grand but way too many stand empty. Three stories, marble steps, stone base, architectural ornament around doorways and all. Then and now it seemed obvious that the area must have seen better times. Times when houses were never boarded up, shops dotted the corners and formed small commercial nodes and services were seemingly abundant. Today the neighborhood is only a shadow of its former self. The once proud monument studded public squares are now compromised by having carved out space for poorly placed schools and rec fields. The upkeep of the parks seems better now then it was then.
Lafayette Square Park when bike party came through
in the May of 2015 (Klaus Philipsen)

Grand houses, churches and squares appear to be obvious testimony to better days, it isn't easy to tell, though, when those better times would have been. Was it when the area was still red-lined, inhabited by the well-to-do that kept blacks out, or when the black middle class flooded in and every house was filled to the last room so that there were overcrowding issues? There never was a time that one could describe as all around satisfactory if equity and fairness is considered. 

Lately Sandtown has become a news item again in reports about the community as the home of Freddie Grey and why all the attempts to fix up the neighborhood have barely done more than, at best, stabilize a highly unsatisfactory status quo. (NYT article). Most articles end with a figurative shoulder shrug that writes this community off along with most of West Baltimore as irreparably "failed".
Groundbreaking of the first 80
rowhouse rehab project
(ArchPlan archive)

After that house on Fulton Avenue my firm was selected by Enterprise and BUILD to design plans for the rehabilitation of 80 abandoned and vacant homes as part of an effort then dubbed as Sandtown 500. That engagement was followed by assignments from various outfits such as the now defunct Sandtown CDC and a local developer called Moorish America. My firm surveyed hundreds of houses and designed renovation plans for them. Some houses were just boarded up, many others were mere shells with trees growing out collapsed roofs. I walked all the streets that appear on The Wire and waded through tons of reuse in the vacant buildings. One day employees out measuring up houses called me very worried about a big stash of drugs and money they had found. They left the house in a hurry and wondered whether reporting it to police would endanger their lives. We decided yes but reported it through a discrete back channel anyway.

The renovations were "scattered" wherever Enterprise could get vacant houses from the City, an approach soon considered lacking and unsuccessful since some newly minted homeowners would still have to live next to a vacant house. That can be dangerous and drags on the equity in the house.

Houses would be rehabbed and receive all amenities, the high cost written down through grants and special programs such as HOPE III to allow people to become first-time home owners. There was local hiring and job training and efforts were made to improve schools and provide services. Everybody understood then that to move the needle more was needed than just rehabilitated houses. Still, in the end there was little to show, when it came to workforce training or growing local resources that could fix the community from within, not for lack of trying. I saw the weekly hiring reports. It became clear then, that folks can't be hired right off the street and provide reliable labor the next day. Many more transitional steps are needed.

On balance, many people that could leave the neighborhood did so, and those who had no means to leave were left behind. Abandonment never seemed to become any less.  And yet, in all community gatherings I have attended to this day, I was always impressed how many residents with options and education remained in the community and engaged in the struggle for improvement. Sandtown is not a place where only desperate people live and neither is Harlem Park, Upton or Druid Heights.

But I also saw some of those houses we had renovated re-boarded after just a couples of years and that was before the foreclosure crisis that hit so much harder in West Baltimore than in neighborhoods with better income levels. Predatory lending taking a high toll. 

There simply is no way to rebuild Sandtown with subsidized housing alone or strictly for the people that are already there. There simply isn't enough money for the former and not enough people for the latter. For West Baltimore's vacant houses to be filled, people need to be drawn to the community that represent additional and different demographic groups. People with more means and choices. Why would people choose Sandtown? Cheap real estate, proximity to downtown, easy access to DC and the historic setting and architecture are all good reasons, but "a market" still needs to emerge.

Today there is much more talk about transportation as an equity issue. West Baltimore is better off today in transit then in 1993. MARC trains now go hourly to DC and most stop in West Baltimore. The overloaded number #23 bus was augmented with a #40 "Quickbus" and later a #47 Quickbus was added. The promised east west rail line, sadly, never materialized.
Harlem Park: Big houses

For any influx to occur it would take some initial larger investments near areas of strength. Not the large-scale demolition and urban renewal style clearing of the past, just projects of the kind that turned Patterson Park, Remington, Barclay and Oliver around. Managing vacants, filling them with qualifying home buyers who can buy at market rate, strategically placing quality affordable housing in between, such as Miller's Court on Howard Street, the Lilian Jones apartments on Greenmount or the Gateway on North Avenue. But in the 1990'ties the approach was based solely on public money as the SUN reported in 1993:
The 1990s-style war on poverty in Sandtown won't come cheap, but all the political planets appear to be in alignment.Mr. Schmoke, by forgoing a race for governor, has increased his stake in the project's success. And President Clinton's housing secretary, Henry G. Cisneros, a former Enterprise Foundation board member, appears eager to make the project a national model.In addition, President Clinton has signed into law a $3.5 billion program to set up a half-dozen "empowerment zones" in cities across the country. If Sandtown is chosen next year as part of a Baltimore zone, a $100 million federal grant will flow its way, as well as tax credits and other benefits for employers.About $60 million in government and foundation money has already poured into Sandtown. Mr. Costigan, the Enterprise official, estimates that $220 million is needed over the next five years just to renovate 3,400 units of substandard housing.Although transforming Sandtown sounds costly, Mr. Costigan says government spends nearly $70 million in the community every year to maintain a rotten status quo.By investing an extra $20 million to $60 million a year for three to five years, he argues, Sandtown can be transformed into a decent place to live that, in the end, would cost no more to maintain than it does now. Baltimore SUN 1993)
Clearly, this strategy did not work out. Neither were the investment levels sustained nor was it ever realistic to assume they would. Politically the attention went from intensive care (Let's take care of our most disinvested places, Schmoke) to triage (working from strength, O'Malley). Sandtown simply moved out of focus until April 2015. Now with a name almost as well known as Harlem or Watts, no clear new strategy for Sandtown is in sight, no matter the CORE money for demolition and economic development that the State set aside.
Urban farming on vacant lots in Sandtown

It is hard to imagine how Sandtown could come off its knees without the entire City embarking on a much more convincing upswing. The truth of the real estate world is, that investment is drawn to areas that are affordable but have a good promise for a return on the investment. There are plenty of neighborhoods in Baltimore which currently appear to be a far less risky place to develop.

But there is no alternative to the building from strength approach that Mayor O'Malley favored, a strategy that should include relative strength of places within the communities. Whatever investments will be made, private or public, they must be very strategic and leverage sustained growth based on positive feedback loops from re-entry to training, job opportunities, transportation and housing.

Sandtown taught me not only what a Baltimore rowhouse is but also how hard good urban policy is without a strong overall city market. This is unfortunate, especially since housing is an essential of life and shouldn't be seen merely as a commodity.

Klaus Philipsen, FAIA

From the 2013 Abell Report "Sandtown- 20 years later"


Saturday, July 23, 2016

Flipping in bad "gem" neighborhoods

It is hard to read through the BBJ article reporting about zip code 21218 as one that is excellent for real estate speculation. "Hidden gem" means good for flipping, not quality of life or architecture, farmers markets or strong neighborhood associations, things that normal people associate with being a neighborhood gem.

Maybe that cynical $ based view is to be expected from a firm that's called RealtyTrac and is based in Irvine California, a hotbed of high real estate prices and very low true "gemness" in terms of character and authenticity. 
The list by RealtyTrac showed that the two locations in Baltimore are considered "down in the dumps" on paper because of a high amount of properties that are classified as underwater, low employment figures and mixed property values.
"It is ranked No. 2 out of 35 in the U.S. on the list, what stands out there to me is there is a strong increase — 32 percent from 2015 in homes being flipped and an 187 percent gross return in flipping profit." (Daren Blomquist of RealtyTrac, according to the BBJ).
Real estate, namely its use for speculation, is indeed at the root of much of what ails American cities and communities.
The wealth gap (Brandeis Study February 2013)

Aside from all the other negative aspects of speculation (no actual value is created in flipping, for example), an American specialty is that it continues to be a field that allows practically only white people to gather wealth that way.
Tracing the same households over 25 years, the total wealth gap between white and African-American families nearly triples, increasing from $85,000 in 1984 to $236,500 in 2009. (Brandeis study 2013)
The reason why especially black people are generally excluded from building wealth through real estate equity isn't any longer restrictive covenants or discriminating laws, but the unfortunate self-segregation that continues to sort communities by race. As a result, whenever blacks buy into a community at larger numbers whites move out and property values go down, if for no other reason than that blacks constitute a much smaller market with less disposable income to begin with.
...black families typically bought homes eight years later than whites, giving them less time to build equity. Meanwhile, even when they were able to buy a home, the typical black family did not see that property appreciate as much as did the typical white family.
One reason, the authors said, was that blacks frequently moved into predominantly black neighborhoods, where few whites shopped for homes, limiting the sales market and depressing prices. (Washington Post about a study on the wealth gap)
The reasons for the wealth gap: Homeownership is #1
The whole mechanism constitutes one of those evil downward pointing spirals that to this day is in full display all across the Baltimore region and most of the nation. As far as those Baltimore "gem" zip codes. Theoretically blacks owning there could now earn a bundle by selling to the new incoming high bidders. Practically, though, many of the properties sucked up by the flippers are homes where the previous owners had been long pushed out by the banks and which had been sold at bargain prices.  

Klaus Philipsen, FAIA 

BBJ article
Washington Post article about real estate disparities


Thursday, July 21, 2016

McKeldin: Flawed reasoning

I understand where the McKeldins are coming from. It is easy to see the fountain the way they describe in the the open letter to the SUN, even though being the descendant of someone who was honored by the fountain does not automatically bestow expertise in the matter. 
Pratt Street: Nothing but cars. No view is blocked by the fountain (out of view on this photo)

The problem is that good places are more than flat open spaces one can see across well. The current fountain does really not block any relevant views in any major direction. That is a factually incorrect statement. So is that gateway argument. One can hardly describe the entry via Conway Street as a gateway into the City, even though a lot of drivers use that route. Seen through the windshield the back of the fountain hidden behind landscaping is hardly offensive at all and certainly blocks no view of any significance. 

What the designers of the fountain understood is that the space needs something to anchor it in this sea of wide roadways and shield pedestrians from the onslaught of cars. The fountain was designed from a pedestrian perspective, not that of a driver who is busy navigating a series of complicated turns and lane splits. 
For both, the anchoring and the shielding some heft is needed that the current fountain provides in very appropriate scale and mass. 
McKeldin Fountain during Light City Baltimore

Surely one can argue for a new or even better design. However, we haven't seen it yet. 

And that isn't my judgement, but that of UDARP, the only public body that did an actual review of the new plans.  As I have reported in this space, UDARP members had pretty unkind things to say about the suggested linear "water wall". That is why DPoB now scrapped the suggested designs in favor of a design competition. 

All well and good, but we shouldn't start with the demo of a public space only because a few private folks want that to happen and pay for some of the  cost. Especially not before a new design has been vetted, approved and funded. Better a bird in the hand than two in the bush. Who knows, Mayor McKeldin would have probably agreed with that simple common sense notion. 

Klaus Philipsen, FAIA 

Wednesday, July 20, 2016

Kayak and Circulator: Cool or just frivolous?

It is easy to incite the disenfranchised and their advocates against the accessories of the wealthy:  yachts, golf, penthouses, roof decks and lately kayak landing places. It is equally cheap to get the wealthy mad about dirt bikes, hip-hop music or rappers. 

Bicycles, water taxis, Whole Food markets and the Circulator fall somewhere in between, although most is seen to belong to the yuppie side as well, depending what someone considers as basic need. One can see how such lists can lead people astray. Music and art have been struck from education with similar lines of "reasoning".  

That is an unfortunate type of discussion, or actually, it isn't a discussion at all. It isn't about weighing merits, costs or benefits, instead it is simply an exercise in pigeonholing and confirming one's bias. To get a crowd to roar in response to the question who here needs a kayak landing is unproductive. 

With this, we’d be paying for something I would never use! We’re paying for a luxury that’s really not available to most of us! Who here has a kayak? I don’t!” Rev. Dellyne Hinton of Gwynn Oak United Methodist Church in Howard Park. (Baltimore Brew).

There is no doubt that Baltimore's waterways are not only a backbone of the region's economy in terms of shipping, cargo and freight transport but also as a recreational asset. 

The Living Classroom Foundation has worked for years to provide a pathway to the Bay for inner city kids. The reports about so many young men and women who never experienced the area from the water and never left the City confines at all, not even on land, are a sad testament about real existing divisions. Ridiculing water recreation won't make these divisions any smaller. Associating water with race in any way just continues a depressing history of bad assumptions. 

So now we wonder should the City should support kayaking or the Circulator in any way? Are these things frivolous in a city where every day is a matter of life or death for so many? From a moral perspective, one can argue that point, for sure. From a more pragmatic perspective, Baltimore needs to attract younger and better educated people to meet the workforce demand of the industries of the future. While it is true that scores of inner city men and women need jobs, the leading employers in the region need skills that most of the currently unemployed don't have, even if they are well trained in a certain field, education may still not be worth much without demand. The gaps between skills in demand and skills in supply can in part be reduced through workforce development and training, but not in its entirety. Industry will obviously go where the gap is small and employees with the needed skills are readily available. 

If Baltimore decides that it wants to close the skills gap "from within existing communities" that is a laudable goal in terms of inclusion and social justice, but it is also parochial, impractical and unattainable. The solution of the workforce gaps have to be encompassing, multi pronged and include bringing new talent to the City.

The isolationist approach of the left mirrors in unfortunate ways the idea of the right that America would be somehow better off,  if it closes the borders and works with the potential we have within. 

I surely hope that the discussion about the Port Covington Masterplan does not attempt to bring the level of design to what we usually get in Baltimore. Striving for excellence in public spaces is worthwhile. It is high time that Baltimore isn't content with the bare minimum that is just enough to for function. This City deserves the high level design for streets and parks that have become common in many other cities. The inadequate public infrastructure in poor neighborhoods doesn't get better from downgrading the streets and parks of Port Covington. 

Inclusion of water taxi, bio habitats, running trails and bikeways is something we should support, not something we should fight. There is no reason why the Middle Branch couldn't become an attractive place for the residents of Cherry Hill, Brooklyn and Westport to walk, stroll, bike or even kayak. In fact, the argument that a poor city can't afford kayak landings is dangerously close to the argument that a poor city doesn't deserve anything out of the ordinary. Improvements in the poor communities surrounding Port Covington will still be needed, of course. The benefits agreement points in the right direction towards achieving those. 

And the Circulator and the Harbor Connector? Are those merely a toy for yuppies or Millennials? 

Conceived as a downtown circulator to connect peripheral parking with downtown jobs, it isn't an effective tool for addressing the slow and often circuitous  job access for those in poor communities. Trying to do that would be like building a parallel bus service that competes with MTA. The fact that lots of downtown residents and office workers love the City run service shouldn't be held against, nor that it's service is seen as superior to MTA's. Killing the Circulator won't make MTA service any better. But those who keep a weary eye on how much money the City has to use to subsidize the service have point. Money siphoned from the General fund, indeed, directly take resources from other potential projects. The original structure that the Circulator should be funded by those who benefit should be maintained. The surcharge on the parking tax and direct contributions from large developed along the lines are appropriate measures to ensure sustainable funding. The service shouldn't exceed what that type of funding can sustainably support. 

Klaus Philipsen, FAIA

Monday, July 18, 2016

When exactly were things better? Part 2: Baltimore's Waterfront Fights

At a time when a significant amount of Americans likes to make "America Great Again" one has to wonder to which time the clock should be turned back to. The sentiment that there have been better times than the presence is strong even among liberals and it is often applied to Baltimore as well.
When we still had nearly a million people, when Pennsylvania Avenue was flourishing, when people still cared for each other in the community, when Baltimore still had streetcars running in every block; there is no shortage of nostalgic rear-view mirror longings.
This year is my 30th year in Baltimore, just long enough to look back some distance and explore, if things were really better in the past. At least the recent past going back to 1986 when I started by work in this city.
This is part of a multi-part look-back in no particular order meant as light summer reading. I will try not to slip into the typical view through the aging eyes of one who confuses the vigor of the younger self and the heroic deeds done as a younger man with the condition of society at the time.
Part 2: The Waterfront Fights

Canton and Fells Point were always pretty well organized as communities, their resolve to fight sharpened in the famous freeway wars from which Fells Point emerged fully victorious and Canton slightly wounded with some areas north of Boston Street cleared for the freeway.
The abandoned American Can Company in 1980

So when Louis Grasmick came along to build the Anchorage and then Bill Struever to do Tindeco, Canton Cove and later The American Can Company, these developers were not exactly greeted with open arms by groups like the Waterfront Coalition which had been formed to protect historic neighborhoods and the working class neighborhoods from the effects of gentrification. Activist Barbara Mikaulski went on to become famous, Another activist was John Cain who in 1991 won the District 1 nomination for City Council. One of the more colorful characters was Steven Bunker who eventually left Baltimore for Maine. SUN wrote on occasion of his 1999 departure to Maine:
He has consistently and tenaciously fought for the integrity of Fells Point as "a mixed-use, small-scale historic community" against big developers, big political contributors and indifferent city administrations. A dozen years ago he helped form the Waterfront Coalition of community groups from Little Italy to Canton "to keep the neighborhood from being condominium-ized."
"Every two-bit hustler ... was coming to town with a grand scheme of building a condo-tower on the waterfront," he says. "We gained some notable victories."
The can company and the Tyler Lumber Yard in a map from about 1876
In the case of the Can Company Struever was actually some kind of savior after a protracted battle with developer Michael Swerdlow about his American National Plaza development that ended with Swerdlow  giving up on Baltimore and moving to Florida, a second victory for the community after defeating the freeways.

What did Swerdlow's plans in, was that he wanted to completely demolish the historic Can complex to erect a dense mixed use development including a 22 story condo tower. The problem was that the developer wanted to do this with federal funding from a City managed UDAG community block grant which raised the famous Section 106 issue which forbids the destruction of historical assets in any project where federal funds are used. A historic review determined that the Can Company was a historically contributing structure and that the developer had not studied the option of adaptive reuse sufficiently.

Emboldened by the impasse on preservation, community activists collaborated with the Neighborhood Design Center to produce a report about their vision. It included demands for adaptive reuse and affordable housing. Understanding that this combination wasn't attainable without additional resources, the community insisted on the introduction of a council bill which would have leveraged impact fees on higher end waterfront projects to support affordable housing, an approach that resurfaces today with community benefits agreements funded by "luxury" developments such as the Casino, the UM Biopark or the proposed Port Covington redevelopment.
The American Can Company and the lumber yard 1934 (source: Ziger Snead
highlighting the Starbucks "pad site"

However, the 1990 impact fee bill failed. Al Barry, then Assistant Director of Planning, explained that such a fee would "discourage development and force builders into the suburbs". (Baltimore SUN, Nov 2, 1990), a few that also prevailed in the Council.

The American Can fight absorbed the energy of the communities and allowed Struever to complete his Canton Cove project without too much opposition except for some concern about the added three floors piled onto the original can building adjacent to the Tindeco apartments.
From MDE brochure about brownfield clean up program

When Bill Struever turned his attention to the American Can, his purchase saved it from Chertow's threat of tearing down the Old Can complex without rebuilding it. Struever proposed adaptive reuse and instead of residential use a business incubator, the Baltimore DAP caulk company, restaurants and a a bit later added a Starbucks. The Canton Safeway was retained from the Chertow plan ending the area's longstanding status as a supermarket desert.

The Fells Point fire power was brought into position again when Allied Signal began to dismantle its hulking plant, encapsulate the site as part of a clean-up and began to make plans for new development. The Waterfront Coalition had not expected that anyone could build on the chromium saturated site and suggested a 26 acre park. The owners, with the help of a group of consultants (I was one of them), showed that after the area was capped, development was, indeed, possible. After almost two years of wrangling the community agreed in 1992 to a Planned Unit Development that included a 6 acre  park,  1.7 million square feet of mixed use and a maximum height of 180'. (The PUD was modified twice and allows now 2.8 million SF of development and much taller buildings such as the recently completed Exelon tower.)

But before the Allied site agreement was reached, another big development had begun to emerge, not really part of the "Gold Coast" but wedged in between downtown and historic Fells Point, the area that would be later first dubbed Inner Harbor East and then simply Harbor East.

In the late eighties/ early nineties when Canton Cove was under construction, the Chertow had been defeated and the Allied Signal plant was a big empty hulk in the Inner Harbor, Inner Harbor East had yet to be branded as such and was occupied by a sawmill that went up in flames in one of the more spectacular fires ever seen after the Great Fire.
Harbor East layout before development
That fire was a signal for Mayor Schaefer to make his next waterfront move by convincing Baltimore's baker in chief, the lord of all McDonalds rolls east of the Mississippi, John Paterakis, to become developer.

The new town south of Little Italy would be nicely laid out with a circle, a monument, fixed bulkheads, cobblestone streets and Victor's Café. All but the café was built on the City's dime, and all was based on an award winning masterplan developed by architect Stan Eckstut. He had just gained international status with his much published Manhattan urban waterfront redevelopment named Battery Park. Eckstut's plan wrapped structured parking, envisioned mixed use, active street-fronts and tall buildings up to 180' limited to the center of the site with lower structures around the periphery.

The only problem was, one of those regular real estate cyclical downturns brought a marked slowdown, and there was no demand to build on the neatly laid out building parcels, not even without impact fees. The initial exception was the Sylvan Learning Center mixed use complex until eventually the baker came through with the bold idea of a 225' convention center hotel not next to the Convention Center but in Harbor East. The tall hotel would have not only exceeded maximum height limit, it also positioned the tallest guy in the front row. Then Mayor Schmoke liked the idea of a somewhat distant Convention Center Hotel, no matter the rule violations. So new rules were proposed. The AIA's Urban Design Committee brought Eckstut back to Baltimore to defend his plan, to not much avail. Schmoke liked that Paterakis was willing to fund the hotel with his own money even before he had a hotel name brand secured (it later was supposed to be a Wyndham and then became a Marriott). The Mayor liked the hotel plan so much that the project went forward (albeit with a reduced height) and was even awarded a payments in lieu of taxes scheme called a PILOT that made it essentially tax exempt for 25 years.

While the hotel wasn't really a "convention center hotel" (the City embarked years later on its own hotel project right at the Convention Center) but it broke the ice and from there on, Harbor East parcels began to be built out one after the other, including the popular Whole Foods store until the entire new and shiny quarter was completed in its un-Baltimore character that those who look for the gritty authentic Baltimore, find disdainful. To this day the argument continues if the baker got too much of a break on taxes, whether Harbor East sapped energy out of the historic downtown and if Baltimore has any advantage of having developed that part of town. In fact, Harbor East is used as a foil for the debate about Port Covington. It would be a great project for BDC to work out the full cost benefit analysis of this project to move that discussion to a more fact based level.
Harbor East today

The Baltimore waterfront battles about saving working class communities from what were then called yuppies, the worries about gentrification, the concept of benefit transfers (through impact fees) and the discussion about from which point on a developer may be spooked and move to other shores, all this I witnessed over my entire 30 years of being here with the same arguments pushed back and forth year after year and project after project. On the waterfront, except in the victory against the American National Plaza, developer plans usually not only prevailed but also received considerable City incentives. For some the question remains, whether Baltimore got better for it.

Klaus Philipsen, FAIA

Baltimore SUN Sept 1991, Canton Yuppies
Andrew Merrifield, Aug. 1992, Struggling over place: Redevloping The American Can,


Sunday, July 17, 2016

Are contractors cheating the City?

In his Sunday SUN article reporter Luke Broadwater looked deep into the issue of DPW and DOT cost overruns, but after reading the story one remains somehow dissatisfied, uncertain who the really bad guys are. 
Utility repairs

This isn't necessarily Broadwater's fault, but is inherent to the complexity of the matter. In the two sided world of typical construction contracting, in this case the City and the contractor, blame rests hardly one side only.

Councilman Stoke's suggestion that contractors are simply gauging the taxpayer and should "just eat" cost overruns is unrealistic and also often unfair. Especially in cases where overruns ostensibly stem from unforeseen conditions or other additional scope. Typical contract language is very clear on that. Forcing contractors to just pay those extras out of their pockets would never stand in court.

The real question is why there are so many "surprises" or items that are not properly listed in the scope of work.  And for that there are two obvious causes: 

- Poor construction documents either due to sloppy engineering and design (my field of work), which can include incomplete investigations of existing conditions.  In this case the fault rests with whoever prepared the design documents which may be neither the city nor the contractor but a third party. Which opens another set of questions, namely the fact that public agencies are so diminished in their capacity today, that they have to outsource almost everything. (another story)

- Contractors who can count on poor documents, poor investigations or the discovery of additional conditions can gamble and price the known scope low or even under their cost with the hope to recover the loss with inflated change orders. Contractors can also recover loss from dragging out work if they can charge easily for "general conditions"  (the cost for the contractor to keep a job site running). Depending on what other lucrative jobs are out there, this can also be a self defeating strategy.
Sinkhole Mulberry Street, two weeks without visible change

The remedies for these possibilities aren't easy because the fixes usually also entail cost, for example very extensive pre construction investigations. Not selecting the lowest bid qualified contractor obviously also costs money. 

The solution, therefore, most likely lies in a different "project delivery model". 

A very popular but ineffective for cost control procurement method is the "on-call" model.  In it contractors have an upset contract for, say, $10 million and than perform work on a documented "time and expense" basis until the money is used up. The bid is sometimes compared to competitors on the basis of a fictional project for which actual cost will never be known. This system is risk free for the contractor and very hard to monitor. It should be used in emergency situations where there is no time to put documents together or go through a bid process.

The utility contractor Spiniello, for example, is on an on call contract for those sinkholes that opened up on Centre and Mulberry Street. In those case, obviously, the scope of work is created by the hole itself and one can determine what is needed to fix the problem only after the debacle occurred when time is of the essence. In the case of these sinkholes the scope involves extensive detouring of sewer lines above ground. Not an easy task with pumping stations and digging to get the temporary pipes under the pavement at intersections. The rerouting of water and sewer is a time consuming utility project all in itself.

As evident as all that is, there no built-in incentive for the contractor to do things extra efficient or fast. Folks inclined to believe in conspiracy, corruption and evil intent can suspect that there is more reward in keeping people and machinery busy for as long as possible. Oversight from DPW that can reliably detect if and when this may be the case is minimal, because of the decimated man-power few understand the intricacy and complications of these operations where obstacles are encountered at every turn. 

The construction industry has identified a number of project delivery models that create a win-win situation by rewarding contractors with incentives for saving money instead of spending it. One can also assign scoping and design also to the contractor. Although this gives the contractor even more power, the responsibility cannot be pushed around as easily and sloppy design cannot no longer be used as an excuse. The design-build (and operate) model is currently used to build the Purple Line, for example.

Other project delivery models are managed construction contracts where the city would employ a construction manager to hire and oversee design and construction, improving oversight and also creating a system where all sides have skin in the game.

In short, the solution to the problem that the tax payer always gets the short end of the stick, is to tie payment on contracts to performance and outcomes, instead of just counting hours or doing things by the (design) book. 

However, even the best procurement and project delivery practices won't overcome another seemingly inherent problem of Baltimore's utility mess: the fact that the many necessary repairs seem to be executed in a reactive manner and without a clear forward looking strategy. Like in constantly patching the roof and fixing water damage in the house without ever getting around to putting a new roof on. In the end a very costly and ineffective method to get ahead of problems.

In spite of a good flow of money from water use surcharges, the City hasn't gotten anywhere near fulfilling the original deadline of the EPA consent decree. This deadline has now been extended, yet the resources all go towards fixing the latest calamity.

Klaus Philipsen, FAIA