Wednesday, February 8, 2017

Caves Valley pulls out of Cross Street Market deal with City

The South Baltimore Cross Street Market has seen a fair share of victims and terminated deals, lately. First development partner War Horse LLC pulled out as a development partner and split from Caves Valley. Then Caves Valley terminated long time market tenant Nick's Seafood. Then the developer told all merchants that they would have to vacate the market for the duration of the renovation. Now, abruptly and only a few weeks after signing a deal and having been assigned the development rights by the City, the developer Caves Valley is pulling out of the deal altogether. The Market Corporation issued a statement:
"There is a divergence of opinions on the future vision of the market. In light of today’s announcement, BPMC will need time to regroup and consider next steps for developing an action plan that will have the best interests of both the community and merchants in mind."
Just a week ago Market Director Robert Thomas had described the Cross Street Market experiences for Community Architect Daily with these somewhat cryptic words:
I consider the Cross Street disposition an important and informative episode in the history of Baltimore’s public markets. Lessons learned, and being learned, from this experience will inform outcomes of the next two RFPs, along with other factors not totally under control of the Markets corporation. (Robert Thomas)
The episode now gets a complete re-boot. Reactions to the fact that Caves Valley's departure puts everybody back to square one are mixed as the BBJ reports this afternoon. Given that the market has fallen on hard times for quite a while, to have no plan in place now isn't necessarily good news. However, the turmoil that Caves Valley had created in spite of a very long time of negotiating the deal with the City in the first place, wasn't good for the market either.
Back to square one: Caves Valley is out

One can't help but suspect that the developer wasn't quite ready to engage in a complicated situation like this. Caves Valley is a developer used to success but also to getting their way. They have shown in Towson that they don't shy away from bloody battle with communities, a strategy that  doesn't work as well in Baltimore City where developers like Seawall (R-House) or Sagamore Development have set a recent standard that puts a premium on public benefit, long-term strategies and accommodation of community demands instead of taking a hard and combative stand. Whatever was made public about the future of the market did not seem to be in line with how public markets are defined, for example having local merchants instead of national chains.

Public markets have a public purpose. This means they are probably not profit centers for a developer. Caves Valley had engaged in the Cross Street Market knowing that engagement here was complementary to their investments on Light Street, in Sharp Leadenhall and the Casino. As such the developer wasn't dependent on a reasonable return on investment just from the market alone. It will be difficult to find another investor who can take this broader approach across various projects.

Inevitably the question will have to be asked, whether public markets can really be operated more successfully by private entities than by the City itself. To make "the numbers work" that could mean asking whether the Casino benefits set aside for the South Baltimore community could come into play to ensure a market that maintains public interest in healthy affordable food, a diverse community space and remains a business opportunity for truly local merchants.

Without inside knowledge in the Cross Street Market situation, it is hard to tell what exactly went down here, except that one can easily say that what happened isn't the way a development deal that involves City property should unfold as part of a public-private partnership, even though those frustrating terminations aren't unheard of. One simply has to remember the Superblock.  The Baltimore Fishbowl reports that Mayor Catherine Pugh said in a statement that the Baltimore Public Markets Corporation “is reviewing its options” and will again engage community residents “to fulfill the vision” for the Federal Hill location.

“Public-private collaborations will be key, and I want to see Cross Street Market become what the community wants and certainly deserves,” she said.

One can hope that the City takes the experience to heart when it considers the proposals for the Hollins and the Broadway Markets which will be due next week. Likely, the City issued those requests for proposals (RFPs) without enough conditions in place to prevent a similar debacle for those two markets. It isn't too late yet to put those safeguards in place.

Klaus Philipsen, FAIA

BBJ: Caves Valley Partners pull out of Cross Street Market Deal.