Construction on New Buildings Underway at Port Covington Development
New buildings are now rising out of the ground on the first major phase of construction at the 235-acre, $5.5-billion, multi-decade Port Covington development. Construction on five new buildings totaling 1.1 million sq. ft. is underway with a tower crane currently on the site. The Port Covington Development Team held a groundbreaking today to celebrate the start of vertical construction.
The Port Covington Team is comprised of lead investors Kevin Plank’s Sagamore Ventures and Goldman Sachs Urban Investment Group, and lead developer Weller Development Company. Today, the team announced financing for the current Chapter 1B of development has been finalized. The capitalization totals more than $650 million, including approximately $137 million in Tax Increment Financing (TIF) bonds, loans from two lenders, and about $150 million in Opportunity Zone funds raised.
Infrastructure work for Chapter 1B started in May 2019, but was paused in recent months during the COVID-19 pandemic and in anticipation of the delivery of the TIF bonds.
The next five buildings in Port Covington are scheduled to begin delivering in late 2022. This development phase will have 440,000 sq. ft. of office; 586,000 sq. ft. of residential from 537 total housing units which break down as 367 market-rate residential dwelling units, 89 affordable dwelling units (ADU), and 81 extended-stay units; 116,000 sq. ft. of retail; more than 1,000 parking spaces; and 10 acres of parks and public space. Upon delivery of Chapter 1B, 20 percent of the residential units in Port Covington will be ADU.
The buildings include:
- Building E1: 223,000 sq. ft. building (162 residential units and 40,000 sq. ft. retail)
- Building E5A: 221,500 sq. ft. building (212,000 sq. ft. office and 9,500 sq. ft. retail)
- Building E5B: 133,000 sq. ft. building (40 residential units, 81 extended-stay units, and 6,000 sq. ft. retail)
- Building E6: 293,000 sq. ft. building (254 residential units and 16,000 sq. ft. retail)
- Building E7, Rye Street Market: 273,000 sq. ft. building (228,000 sq. ft. office and 45,000 sq. ft. market)
Alexandria Real Estate Equities, a California-based life sciences developer, is also actively marketing a 170,000 sq. ft. laboratory building for lease at lot E8.
The team noted any Light Rail spur to Port Covington or improvements to I-95 exits would come later in the project.
At full completion, Port Covington is planned to include up to 18 million sq. ft. of new, mixed-use development with 2.5 miles of restored waterfront and more than 40 acres of parks and green space. Under Armour has planned a 50-acre campus and headquarters at the former site of the Port Covington Shopping Center. While the company converted the former Sam’s Club to a 170,000 sq. ft. office building known as Building 37, it has not yet broken ground on Phase 1 of its campus and has not announced a timetable for this project.
Already completed at Port Covington in Phase 1A is City Garage, which redeveloped an existing building in 2015 into a 133,000 sq. ft. office building that is “a hub for manufacturing, innovation and entrepreneurship;” Building 37; Impact Village at 240 W. Dickman St. which underwent some renovations and is now the home to workforce development non-profits; Sagamore Spirit whiskey distillery; Rye Street Tavern; and renovations to the Baltimore Yacht Basin marina and Nick’s Fish House.
The Port Covington Development Team also made public space improvements which include landscaped medians, taking over maintenance of West Covington Park where it added outdoor bar South Point, the first phases of East Waterfront Park, a new mural, and adding new off- and on-street bike and pedestrian paths.
The Port Covington Development Team has funded more than $9 million to the South Baltimore 7 (SB7) Coalition as part of its Community Benefits Agreement (CBA). In total, the Port Covington Development Team has funded more than $19 million toward combined Memorandum of Understanding (MOU) and CBA commitments to date.
Weller Development partner Steve Siegel said in January leasing is “exactly where we need it be be.” He said they have four to five prospects they are in the process of converting to leases and said there is a “robust pipeline” of interest. He also noted they are engaging in conversations to bring a grocery store to Building E1. Siegel said they are seeing interest from a broad spectrum of sectors for office leases and from specified data science, life science, and deduction sectors.
DataTribe, AllegisCyber, and Evergreen Advisors were announced as the first new office tenants of the project in October 2018.
When asked in January if the COVID-19 pandemic and the rise in virtual work has added any momentum to the project as Baltimore is a much cheaper option than many prominent business cities in the country, Founding Partner at Weller Development Marc Weller noted the unfortunate aspects of COVID-19 but said, “It has been an accelerant – you are seeing a lot of positive momentum from the Northeast heading south.”
Margaret Anadu, managing director and head of the Goldman Sachs Urban Investment Group, said in January her company believes that “Baltimore is a strong investment, this isn’t charity.”
“Port Covington is a long-term, bold vision for helping to build a better Baltimore,” said Plank in a press release. “The TIF bond sale was met with overwhelming demand, and the overall deal successfully closed last week, which is significant proof of institutional investors’ belief in the future success of the project. We are thrilled about this important milestone, and what it means in validating our vision. Port Covington, a decades long-endeavor, will have a fundamental and far-reaching impact on Baltimore’s future, and we are eager to bring additional economic benefits, investment and jobs to the City and our surrounding neighborhoods.”
When asked about new developments surrounding the project on Wells St. in the South Baltimore and Riverside Neighborhoods and the new mixed-use development planned for the 43-acre Westport waterfront parcel, Weller said “a lot of energy has been building for years and you can feel it.”
He noted the Westport project, which sits across the Middle Branch from Port Covington where Stonewall Capital is planning 1,575 housing units, retail, innovation/office space, parks, trails, and green spaces, is a “thoughtful development” that will be an “additive” to the project at Port Covington. Stonewall Capital is under contract on the property that is currently owned by Sagamore Ventures.
Renderings courtesy of the Port Covington Development Team (click to enlarge)
E7 – Rye Street Market
Whiskey Plaza in front of Sagamore Spirit
E6
E5B
E5A
E1
Triangle Park next to E1
About the Author: Kevin Lynch
Founder and Publisher of SouthBmore.com, longtime resident of South Baltimore, and a graduate of Towson University. Diehard Ravens and O's fan, father of three, amateur pizza chef, skateboarder, and "bar food" foodie. Email me at Kevin@InceptMM.com and follow me on Twitter at @SoBoKevin.
