Community Renewal Good Stories - Baltimore

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Empower Baltimore Loan Turns Abandoned Box Factory to New Uses

Baltimore, Maryland, EZ

"We talked to a variety of banks," recalled Larry Silverstein, developer of Lancaster Square in Baltimore. "No one would lend money down here, especially for a building with environmental issues. Empower Baltimore provided the initial financing that got everything going. The loan they did for this building set off the chain reaction."

As a New York City investment banker and aspiring real estate developer, Silverstein had a keen appreciation of the potential of neglected urban neighborhoods. When Silverstein returned to his native Baltimore in the late 1990s, he moved into Fells Point. A crumbling, boarded-up brick structure at 1820 Lancaster Street, which had once housed the Union Box Company, caught his eye.

Silverstein envisioned a renovation that would restore the Union Box building to its former glory-but in a modern urban community that provided the mix of commercial and residential uses that had worked so well in TriBeCa-the once-deteriorating "Triangle Below Canal Street" area of New York City. Like TriBeCa, the Union Box property was a somewhat isolated enclave that had once been predominantly industrial.

"I always wanted to fix up an old building," Silverstein recalled and it was love at first sight. The price was "shockingly inexpensive," said Silverstein-$340,000 for a crumbled building he wanted to turn into 50,000 square feet of profitable office space. The streets nearby were also ripe for development. A parking garage or two might be possible, perhaps condominiums or apartments. A small park was already there and the waterfront was nearby. The site seemed ideal for his purposes.

The Union Box Company building dated from the 1800s. The company, which made shipping boxes for oysters and fruit, was typical of the industries that flourished when Baltimore was a rail and shipping hub. Also typical, however, were the old in-ground oil tanks, lead-based paint, asbestos, and other environmental contaminants in common use decades ago, that would have to be removed to meet current building and environmental standards.

That is when Silverstein ran into problems. None of the banks he sought out wanted to finance such a project. The environmental cleanup costs in a brownfields site were unpredictable, nor was it certain that businesses would be eager to lease office space in the transitional neighborhood.

It turned out that Silverstein did not need a bank for financing. Empower Baltimore Management Corporation, which administers Baltimore's EZ, stepped in with a $340,000 loan that enabled Silverstein's project to go forward. Completed in 1999, the project combined seven separate buildings into one structure while maintaining the historic facades. The project consists of office, retail, and multifamily spaces.

Lancaster Square now houses offices of a financial brokerage, an Internet design and marketing company, the Epidemiology- Genetics Program in Psychiatry of the Johns Hopkins University School of Medicine, and several other establishments. The exterior of the brick building has been restored right down to the old-fashioned block letters that read "Union Box Company" on the facade. A whimsical, faux railroad track design on the inside floor leads visitors past concrete pillars fashioned to look like wooden beams to a light, airy interior with exposed brick walls. Today, Silverstein has not only repaid the EZ loan, but also is developing more properties in the area.

Lancaster Square has won many awards, including the Best Historic Renovation Above $1 Million for the State of Maryland and the third best renovation below $10 million in the United States. In April 2001 the Baltimore Metropolitan Associated Builders & Contractors named Lancaster Square the best Historical Restoration Over $1 Million; in June 2002 Baltimore Heritage gave it the Historic Preservation Award; and in December 2003 Baltimore magazine gave Lancaster Square a Best of Baltimore award for the post office located there.

It is now a space, notes Silverstein, "that sells well."

For more information on the programs of the Baltimore EZ, please contact Administrative Consultant Rachel Edds at (410) 783-4400.