Harbor East developer Michael Beatty broke ground on his new project Harbor Point last month.
After months of consternation by some in the city the Harbor Point project broke ground between Harbor East and historic Fells Point in June. Yet, despite his detractors and the tribalism within the state’s development community Michael Beatty, the developer of the billion-dollar project is encouraged about Baltimore’s growth beyond the site’s 27 acres.
“We need to execute now and to execute we need the private sector to continue to grow. But, we also need the city to grow,” Beatty said from his company’s offices on Thames Street.
Harbor Point, built in phases over the course of 12 years will feature 1.6 million square feet of office space, 914,000 square feet of residential space, 195,000 square feet of retail space and five public urban parks, among other amenities. The project will also allegedly generate thousands of construction and permanent jobs, as well as $19.6 million in new city tax revenue annually.
“We’re building a big project but it’s only as good as what’s around it. This whole idea about one Baltimore – which can be about real estate, about people, about social issues and connectivity – I think are the most important things to make the city successful,” Beatty added.
But, in the minds of many only certain swaths of the city have reaped the rewards of multi-million and multi-billion dollar development.
Shortly after the plans for Harbor Point were made public some of the old fears about resources being mismanaged and unevenly distributed throughout the city manifested; fears rooted in failed urban renewal projects for West Baltimore juxtaposed with sparkling downtown waterfront vistas beginning with Harborplace in the 1970’s.
In addition, the announcement that the city would supplement the $920 million private investment with approximately $106.9 million of TIF (Tax Increment Financing) bonds to finance the public infrastructure for the project only heightened anxieties of some community activists and politicians.
“It is always a matter of class and race in the city of Baltimore,” said Baltimore City Councilman Carl Stokes in the midst of the debate over Harbor Point last year. Stokes, chairman of the Council’s Taxation, Finance and Economic Development Committee has been perhaps the most vocal opponent of certain aspects of the Harbor Point deal (Stokes has publicly and privately said he was never inherently against the project).
Perhaps, “class and race,” were introduced most profoundly in the evolution of Harbor Point when some argued the Perkins Homes public housing development – which stands in the shadows of neighboring Harbor East – should receive an investment of more than $15 million from Beatty Development, generally in reciprocation for the city’s TIF largesse and Enterprise Zone designation funds.
The dramatic paradox of neighboring Harbor East and some of its adjacent communities is not lost on Beatty.
“I’m looking to the east and there is Johns Hopkins in my view…one of the most incredible institutions for knowledge in the world. I’m standing in the center of a major U.S. city and to my right is this incredible waterfront and there’s incredible poverty between the two,” Beatty said.
“And when you sit down and think about it, it’s pretty unbelievable that they’re not more connected together,” he added.
But, the reality is they are not. And although Beatty is a proponent and practitioner of, “knitting neighborhoods together, not destroying them,” responsible urban development clearly is not a panacea for all urban ills.
“We can only do what we can do. We’re not the solution, the savior, the benefactor of the city but I think the projects that we’re doing are good and I think they can generate benefit on their own,” Beatty said. “But, where we can kind of craft things that are mutually beneficial it’s a huge win,” he added.
Some of what he has pledged in the development of Harbor Point is unprecedented according to some city officials.
Beatty has promised a $3 million investment into the city’s Inclusionary Housing Fund, which provides money for low-cost housing. It is allegedly the largest investment in the history of that fund.
Beatty has set a local workforce goal that guarantees at least 20 percent of all laborers will be Baltimore residents and 51 percent of new hires will also be Baltimore residents.
Beatty has also pledged Minority Owned Businesses (MOB) and Women Owned Businesses (WOB) will account for 38 percent of construction firms. The highest previous goal ever set in Baltimore for construction contracts had been 37 percent.
“Ideally, you find ways that are mutually beneficial in anything you do. As an example, a high MBE (Minority Business Enterprise), WBE (Women Business Enterprise) goal for the project; that is 100 percent selfish on our side in some ways,” Beatty said.
“Because we have a city that if we can build up the MBE, WBE community it becomes more competitive and has better pricing. There’s nothing better than having 50 companies competing to do concrete work than two. So, we’re really focused on local MBE, WBE because that’s our community,” Beatty added.
The developer came to Baltimore in the early 1990’s and worked for 23 years with H&S Bakery mogul John Paterakis, before he established Beatty Development Group in January 2013. He and Paterakis developed the Harbor East community some refer to as, “Emerald City.” Beatty hopes to build upon that success with Harbor Point.
“If you look at Baltimore then (1990’s) it was a lot of trouble, but there were a lot of good things going on and if you look at it now there are a lot of good things and there are still a lot of problems,” Beatty said.
“But, I still see opportunity in the city I see opportunity for the whole city to do better.”