Tuesday, May 17, 2022

Port Covington under new leadership: What's next?

When the current Port Covington developer  Marc Weller with Sagamore Development steps down and two new national developers take his space, its big news. But is it good news?

The Baltimore SUN  took cues straight from Sagamore's press release and made it sound as if the two new firms will "join" Weller/Sagamore:

"Two developers of high-profile urban projects in major U.S. cities have joined Sagamore Ventures’ effort to create a mini-city in South Baltimore’s Port Covington and will lead the next phase of development".(Baltimore SUN May 10, 22)

But the BBJ 's take a bit later, was far more explosive. Port Covington master developer Weller will no longer lead the 235-acre project, in fact, he will not be part of the team at all. He will even be moving his headquarters out of Baltimore.

Current state of construction "Chapter One" (SUN photo)
 "The company will be replaced this month by MAG Partners and MacFarlane Partners, a team of national developers and investors, who will launch an immediate marketing and leasing campaign for the five office, retail and residential buildings now under construction at the South Baltimore site". (BBJ 5-10-22)

Goldman Sachs, financial partner on the development team will remain. Goldman asset management director Michael Lohr was quoted in the press release:

“The growing development team reflects both our ambition for Port Covington and commitment to delivering a world-class project that will drive renewed community investment and revitalize South Baltimore’s waterfront”

The Weller Development website still lists his company as the master developer for Port Covington and Weller reportedly will stay involved with finishing the current construction. Weller Development was founded around Port Covington. Most of the company's deals are related to the Plank brothers Kevin and Scott. Weller projects include the Sagamore Pendry Baltimore hotel, Sagamore Spirit Distillery, Rye Street Tavern, City Garage, the management of the Reston National golf course in Northern Virginia and 3150 M Street NW building in Washington's Georgetown. 

A new set of partners: Plank, Gilmartin, MacFarlane (Ryb pictures)

Weller's stake at Port Covington is significant: The "Chapter 1B" complex currently under construction entails  more than 1.1 million square feet of development with 586,000 square feet of residential, 440,000 square feet of office,116,000 square feet of retail, over 1,000 parking spaces, and ten acres of parks and public space. 

For this phase  Weller has drawn the first tranche of $148 million  from the city tax increment financing (TIF) bonds in 2019. The existing financial terms will remain in place according to sources in the development team. The new partners see themselves as additional direct investors and will initially focus on finding tenants for the constructed buildings. 

The new situation is likely to revive the discussion about the redevelopment of Port Covington ("we build it together") which has been a hotly debated topic for at least 7 years since then Under Armour CEO Kevin Plank announced his plans to move to Port Covington and build "global headquarters" there that would be part of an entire new town.

"It will be one of the most incredible places to work, to live and to play," Plank said in an interview at his office overlooking the Inner Harbor. "It would feel like an old port city, and the ability for us to go from the ground up to do that will be just incredible." (Kevin Plank in March 2015)

Since then a lot has happened. While the City's giant tax increment financing bill succeeded against some vehement opposition, Under Armour's incredible growth streak came to an end amidst accusations that the company's growth had been inflated. Still, the community benefits agreements with six surrounding communities (SB 7) was in effect, it was honored and the development team provided resources for improvements. The overall development area was divided into the 50 acre Under Armour headquarters territory and the remaining 235 acres of Port Covington with Weller/Sagamore at the helm. The developers like to see these as separate even though Kevin Plank cleared used to have a stake in both. Weller plowed forward, first with a competitive entry into the "who gets Amazon" sweepstakes that Baltimore lost badly. Then with "Chapter 1B" envisioned as the seed for "Cybertown", a cluster of know-how in cyber security, fueled by the global risks of hacking and the local presence of the nearby NSA. That bubble burst as well, when the lead cyber tenant did renounce his move to Port Covington.

Then the global pandemic struck and made office space a surplus commodity. To this day it is unclear if the bulk of employees will ever return to their cubicles. Still,  Weller continued with mixed use buildings dubbed "Chapter 1 B" on a speculative basis, especially the significant amount of office space posing quite a risk.  Optimistic outlooks were regularly published. However, to this day, shortly before the buildings are slated to open, apparently no offices have been leased.

Another big change in Port Covington was that Plank himself  shrunk his headquarters plans beyond recognition. What had been giant gateway signature towers along I-95 became a suburban agglomeration of low flung stuff, including retaining the former Sam's Club warehouse. UA was now assuming that it would keep a hybrid workforce for the foreseeable future, drastically reducing the need for in person office space. 

UA HQ as presented to UDAAP this month (UA website)

Yet the move towards a new Under Armour campus is underway. In March Under Armour presented a fairly unassuming first phase to UDAAP for review. Design by Gensler, Baltimore. Then, last week new headquarters plans were presented for design review. The plans now showed a more impressive 280,000 sf  structure with much glass. (For a more detailed description see here).

As before, the project was described in superlatives. This time the design which is slated to entail geothermal heating and cooling and a mass timber structure clad in a heat resistant glass was described as the most sustainable project in the region. 

“TMB2 represents Under Armour’s commitment to providing our teammates with an innovative, collaborative and flexible work environment that supports our hybrid work philosophy,” said Under Armour President and CEO Patrik Frisk. “Consistent with one of our values to ‘Act Sustainably,’ TMB2 speaks to our focus on performance, consumers, the planet, and the community we call home.” (website)

The two development areas are assumed to continue in lockstep. Outside the campus there are still some 190 or so acres to be developed. This will now be the task for the new development partners.

The new developers, MAG Partners, a woman owned company founded in 2020 in New York City and MacFarlane Partners, a black-owned company, headquartered in San Francisco would continue to honor all SB7 community benefits obligations. 

Both new partner firms are new to Baltimore. MaryAnne Gilmartin, CEO of MAG  previously served for 15 years as Vice President and President and CEO of Forest City Ratner Companies, a company who lead the EBDI development team. Victor MacFarlane, holding a masters in business and a law degree, founded his company in 1987 but reinvented the company a few times since then.

Sustainability through mass timber (Gensler graphic)

MAG will be the managing partner. Some staff of Weller's company have switched to MAG in their old role, presumably ensuring institutional memory and some continuity

Aside from their excitement of coming to Baltimore, there has been no announcement from the new partners about additional development on the remaining site or what overall long-term vision they may have for this "new town" inside Baltimore. 

The Mayor and the chair of the SB7 coalition were both quoted in Sagamore's press release singing the praises of the leadership new arrangement. They may know more than the public; the news of an entirely new out-of -town development team taking over the largest redevelopment project in Baltimore could, indeed, be the excellent news as which it is presented. However, with everything that is riding on this project, starting with the $128 million TIF bonds, scrutiny by the Baltimore Development Corporation (BDC), the Mayor and the Council would be warranted. 

However, according to BDC Vice President Clark, BDC is not in charge of reviewing the project, it’s progress and financing, or the collection of bond repayments.  This would be the responsibility of the Board of Estimates and the Maryland Economic Development Corporation (MEDCO) which issued the bonds. BDC believes in the project, sees no reason for concern and considers the change a positive development. 

Seven years after Plank outlined his vision in 2015, it is still in large part an aspiration. But unlike some other big projects in Baltimore, Port Covington has seen some real change. In 2015 Plank said "We do have an image problem in Baltimore and we could do something great and iconic and have people see it and be visible. I think the combination between Under Armour and Baltimore right there under 95 will be incredibly powerful." This potential is still there. The  vital catalyst, though, may be the new Middle Branch plans developed by New York's Field Operations, not Under Armour. 

Let's see what happens next.

Klaus Philipsen, FAIA

Updated 5/19/22 for statements from BDC. 

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Port Covington - on course or a vanishing dream? April 21

Wednesday, May 4, 2022

How Should the City Fix its Circulator Bus ?

To some the Baltimore Charm City Circulator ("The backbone of any great city is transportation") is nothing but a toy for the young professionals and "creatives" who live in the affluent parts of the City also known as the "white L". A bus system, critics say, that further cements the racial divide in our city. 

To others the City operated transit system was an encouraging signal that Baltimore's city leaders understood that modern urban  transportation really needs good transit and that  catering to the only communities in the city with population growth was a sustainable smart move featuring an environmentally friendly local transit system that was fueled by electricity, paid by car owners who park in downtown parking garages, and was fun to use. 

The Circulator: Continued ridership losses over the years
(Source: BCDOT)

The original mission of the Circulator was to avoid further downtown parking garages by better utilizing peripheral parking and connecting parking with a free shuttle that would get people from there to their workplace or to downtown shopping and restaurants. The mission was clearly downtown centered and not intended to serve neighborhoods or compete with MTA bus service.

The existing Circulator routes are concentrated inside the "White L"
and barely touch disadvantaged neighborhoods (City graphic)

But the initial Circulator fan base slowly evaporated when a series of calamites struck:

  • the "green" electric buses failed and had to be replaced with used diesels, 
  • a DOT employee in charge of the bus system was caught embezzling funds, 
  • the City wound up suing the operator (Veolia/Transdev) over a dispute about the contractual service obligations 
  • the City hired an outfit mostly known for running limousine services which had neither the required operator training nor the right buses. 
Parallel, the system suffered from "mission creep", cost went up but ridership didn't. To please various constituents the routes had been expanded to a point that operations used more money than the parking revenue surcharge yielded, even if one doesn't count the unexpected cost of the replacement buses. With each trouble the ridership dwindled. When finally enough replacement buses were in place (24 buses are now fully City owned), operators trained and things were running again on all four routes, COVID struck, some service was suspended, ridership plummeted even further. 
Trip purpose: Most trips are not for going to work

The voices demanding a fix for the non equitable, unreliable, money losing and no longer fun to use system became louder. 

No wonder then, that Director Sharkey's new DOT has set out to reform the Circulator and put it into the context of all the other modes the City manages, namely the Harbor Connector boats and the bike and scooter-share systems which DOT licenses. The new BCDOT created a  TDP Transit Advisory Committee Meeting that had six meetings to date, minutes and materials are posted online. Representation on the committee included agencies such as BMC, BDC, DOT and MTA as well as transit advocates such as Transit Choices, the Transit Equity Coalition, the Charles Street Development Corporation, the South Baltimore Gateway partnership, the Downtown and the Waterfront Partnerships and Johns Hopkins University. The creation of the committee and MTA's presence at the deliberations were promising signs of collaboration.

BCDOT also created a separate website "streetsofbaltimore.com" where one can find various city transportation initiatives such as The Baltimore City Transit Development Plan (TDP), i.e. the reform of the Circulator bus in the form of a "StoryMap" (which requires quite a bit computing horsepower to run smoothly). 

The Baltimore City Transit Development Plan (TDP) is a planning process that will develop a five-year transit investment strategy for the Charm City Circulator bus service. The Plan will identify opportunities where the Charm City Circulator service can improve efficiency and equity. This TDP includes analyses of unmet needs, potential route changes to address those needs, and short- and long-term operating plans for the service. (website)

One would think that the reform plans would be mostly driven by ridership, i.e. by supporting the services the most that attract the most riders today. By that metric the Purple Route going up and down the "White L" from Johns Hopkins University to Federal Hill is most successful with 1,548 riders a day and the Green Line with its circuitous attempts of reaching into disadvantaged areas on the est is failing with its mere 181 riders a day. The second worst performer, the Banner Route has 269 riders.

The proposed "optimized route" system: 
Extensions into the "Black Butterfly" (City graphic)

But in a  sharply divided city where everyone is suspicious about what the other one is doing, simply cutting low performing routes would be too simple. Looking at the proposed map, the City has taken the accusation that the system wasn't equitable to heart by planning extensions into the wings of the "black butterfly areas", i.e. the parts of Baltimore that have high percentages of poverty and low car ownership. With that, the City also decided that they won't try to cover the operating cost through parking surcharges which means that a portion is funded from the general fund, i.e. by regular tax dollars. This approach towards more equity contrasts sharply with ideas that MTA had provided some time ago in an attempt to avoid service duplication between the the two transit systems. MTA contributes a small portion of the operating costs and isn't sympathetic to the notion that the City should just run better transit than the State agency and make thus make up for the shortcomings of the CityLink bus system. 
Adjusting the Circulator routes with the goal of equity in mind is a good thing. But the proposed adjustments are only on the margins and the system was originally designed with other legitimate goals. Combining those different goals creates potentially a Frankenstein monster that doesn’t accomplish any of the goals effectively. Brian O’Malley, CMTA).  
On April 26 the City presented a proposed "optimized" new route map and presented the analysis and ideas that lead to the suggested map. The "Optimization Proposal", presumably has taken into account the essence of comments gathered in the past. The website describes the optimization this way:
The Transit Development Plan is proposing improvements to current routes as well as operations improvements of the Charm City Circulator to expand transit access for key equity zones within the city and improve access of transit to job centers not currently served. These proposals include:
Extending the service’s weekday hours so that buses start running at 6 a.m. instead of the current start time of 7 a.m.
Adjusting weekend hours from 9 a.m.-9 p.m., rather than the current 9 a.m.-midnight period on Saturdays and 9 a.m.-8 p.m. on Sundays.
The routes go deeper into the black butterfly areas, the Banner Route was eliminated and the new Cherry Route connects Cherry Hill. Public comments on the website welcome the access to Cherry Hill, decry the loss of the Banner Route to Locust Point and the proposed earlier shut down in the evening. Of course, it isn't a given that ridership will shift as much as the routes. A survey on the current system indicated that only 6% of all riders earned under $30k annually while over 45% earned over $75 k, a stark contrast to the ridership profile on MTA buses. Even though by far the most frequently requested improvement of the survey has been increased service frequency (61%), better headways are not part of the draft improvement package. To the contrary, the headways on the Orange Line will increase by 2 minutes. One third of respondents wanted to see longer weekend evening service, what the proposed system would provide is an earlier shut-down at 9pm instead of midnight. 

Predictably, there is little public concern with how the expanded system would be funded. There is a comment from somebody who plans to move here who suggests based on her current hometown that institutions served by the routes should contribute. It should, indeed, be part of the discussion why Hopkins, for example, runs its own buses up Charles Street and still wants the Circulator to drop people off at the doorsteps of the University, a duplication Baltimore's transit system can ill afford. The expanded services are estimated to cost $2 m per year in added operating cost. The City hopes to get additional funds from the federal infrastructure bill and considers the TDP a step in that direction. Current funding includes, local, state (MDOT/MTA) and federal money. 

Asked for this article about the proposed routes and if MTA is in agreement with them, Administrator Arnold provided the following response for MTA:

The Maryland Department of Transportation Maryland Transit Administration (MDOT MTA) supports local transit operations in all 23 counties and Baltimore City.  In FY21 and FY22, MDOT MTA provided Baltimore City with $1.6 million for eligible operating expenses for the Charm City Circulator.  The budget allocation also provides $1.6 million in funding for FY23.


While MDOT MTA provides support to local jurisdictions in the development of their local transit operations, decisions relating to service levels, hours of operation, and areas served for the Charm City Circulator remain the responsibility of Baltimore City Department of Transportation.

This map is labeled "Possible Long Term Service": Adding a Poe

The improvement menu of the TDP is interesting for what it does not address:
  • Even in its longer view is also mum on the question how the bus can be better integrated with the other modes that the City operates, the water taxi (Harbor Connector) and the bikes and scooters.
  • Even less is there a hint about the City's transit in a future time when there would be a regional transit authority, something the Mayor and DOT supports. 
  • The electrification of buses as part of the City's sustainability strategies isn't on the menu either
  • nor is an outlook towards autonomous buses and how they could be ideal for short range circulator systems where they are already operating on an experimental base in some cities. 
  • The license with the current Circulator operator will run out soon, but no strategy how a future service agreement should be framed has been part of the Transit Development Plan.
The suggested route changes are not yet final, comments are still possible. Public response is still expected until May 13. Comments can be placed online or emailed to StreetsofbaltimoreTDP@wrallp.com, a clear hint that the consultant Whitman Requardt has been commissioned with running the public engagement. 

If the changes would be similar to the draft, the City owned Circulator's equity pivot would move the Charm bus into uncharted territory with the assumption that poor and non-motorized Baltimore residents would flock to the free service and that the earlier start hours would entice low wage workers to use the free ride while the bulk of the current more affluent non-work riders on the Purple Line would continue to use the buses. If the MTA bus system gives any indication, "choice riders" (those who are not dependent on buses for their mobility) are hard to come by on a system dominated by transit dependent riders. This is especially true now, when transit around the country are still struggling to get the riders back they lost under COVID, in part for fear of infection, in part because of work from home shifts, in part because a large part of the entertainment sector had shut down. Around the country circulator type bus systems complement larger scale public transit as a short trip, hop-on, hop-off addition that fills a small scale mobility need one level up from scooter and bicycle share systems. It isn't clear that the proposed Baltimore Circulator routes stay in their lane, i.e. complementing MTA routes instead of competing with them. 

The implementation of Circulator service changes are expected to occur in the Spring/Summer of 2024. According to BCDOT "the implementation phase of the TDP includes the planning and finalization of bus stop locations, the design and construction needed for the new bus stops, and the installation of improvements at current stops. This time frame also includes federal and city regulatory requirements regarding public outreach and notification about the planned transit changes."

Klaus Philipsen, FAIA

the article was update for the MTA quote 5/5/22

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