Baltimore Neighborhood Discussion Thread

[PeterSmith]

http://baltimore.bizjournals.com/bal...293200^1729149

Friday, November 7, 2008
Patterson group hurt by market
Nonprofit that revived city area now trying to save itself
Baltimore Business Journal - by Daniel J. Sernovitz Staff

The Patterson Park Community Development Corp. has dismissed its executive director and is selling a large portion of its real estate portfolio to shore up its finances and shed nearly $20 million in mortgage payments.

The organization, credited with helping to reverse years of decline and blight in Baltimore’s Patterson Park neighborhood, has taken those steps to combat a number of problems tied to the housing slump, including declining property values, mounting deficits and a significant drop in home sales, its primary source of revenue.

Real estate development firms and community development corporations across the country are dealing with similar issues given their reliance on market demand to rehabilitate and sell property. With the market’s downturn, many CDCs are left holding onto inventory they acquired and had hoped to sell.

“They had to act like private developers, without the considerable profit that a private developer would make,” said Bill Ariano, deputy director with the Maryland Department of Housing and Community Development’s Community Development Administration. “What [the Patterson Park CDC is] going through is actually kind of a microcosm of what’s going on in the markets overall.”

A drop in grants and government subsidies forced many CDCs to be more aggressive with their acquisition and rehabilitation programs, and many CDCs found themselves holding on to those properties when the market slowed, banks tightened their lending standards, and first-time homebuyers who turned to CDCs to buy homes in the past were shut out of the market.

The Patterson Park CDC is considered by many to have been one of the most successful community developers in Baltimore City, and its challenges signal the next wave of the housing slump that forced individual homeowners and speculators out of the market or into foreclosure in significant numbers across the country.

“We want to do anything we can to save this group; they have been one of the most successful CDCs in the city,” said Baltimore City Councilman James Kraft, whose district includes Patterson Park. “We may not be able to help them, just due to the extent of their needs. But they have been a model for other development corporations in the city.”

In 2006, the CDC made about $8 million from sales, but ended the year with a deficit of about $400,000. Business picked up for the CDC by June 30, 2007, when it made about $11 million from home sales, but it ended the year with a deficit of about $1.6 million.

During that three-year span, its outstanding mortgages increased from about $12 million in July 2004 to about $19 million in July 2007. The nonprofit owns 250 properties.

The organization lost much of its leadership in the past year, including Executive Director Ed Rutkowski, its director of planning and design, and its sales and marketing manager. The board recently dismissed Rutkowski’s replacement, Mark Tough, who previously served as the organization’s chief operating officer.

Tough declined to comment.

The board has appointed Charles Goldstein as the CDC’s chief restructuring officer. Goldstein is managing director of financial consulting firm Protiviti’s Baltimore office and head of its corporate restructuring and recovery practice.

In a statement, the CDC said Goldstein has been appointed to “lead efforts to restructure the organization’s finances and operations in response to the weakening housing market and economy.”

Neither Goldstein nor board president and state Del. Peter A. Hammen could be reached for comment.

Baltimore City Councilman Bill Henry, who resigned as Patterson Park CDC’s director of commercial development when he was elected to the public office, said he is worried about the group’s future. Henry said the CDC had a history of over-extending itself by acquiring large numbers of properties to maximize the impact it could have on the neighborhood. During the height of the real estate market, the method worked because homes were selling at a rapid pace and the group had steady income from home sales.

The CDC’s model of buying, rehabilitating and reselling homes was successful because it helped reshape a neighborhood after years of decline, said Charlie Duff, former chair of the organization and now executive director of the Midtown Development Corp. in Baltimore. Duff said the risk Patterson Park ran with that model is it was dependent upon a healthy real estate market.

“The downside of that is when the market stops working, that market-driven business gets hammered,” he said. “Markets are cyclical, and people who are market-driven get hammered.” But he noted that prior to its current troubles, the Patterson Park CDC was able to create nearly 5,000 homes for area residents at little to no expense to city taxpayers.

“You look at that and you say maybe those guys did something wrong. But then again, maybe they did something right,” he said.

Founded in 1996, the Patterson Park CDC has invested more than $70 million in that neighborhood.

[Ty Doggie]

Originally Posted by Coldspring

I totally agree. It seems that things are slow to develop along the Light Rail Corridor outside of downtown, though there seems to be progress around some major projects like the State Center, Westport, and Clipper Mill in Woodbury. There would seem to be opportunities at the North Ave Light Rail Station if the parking lot and "air rights" above the tracks could be sold and developed...possibly as an continuing expansion of MICA. They are completing a nice facility next to 1-83 and Mt Royal. I also thought there was a development proposal for a project on the UB parking lot at the Mt. Royal Light Rail Station that included apt. and retail. Then there is of course my favorite stop (Coldspring) which is yet to reach its potential though it is certainly constrained. With all the investment that Loyola is putting into their new athletic complex next to the Northern District Police Station. I would love to see the creation of a small commercial node similiar to Mt. Washington Village or the small retail district along Coldspring in Roland Park created near the light rail stop that could serve both activities at the stadium and the surrounding communities.

Just thought I'd rehash this as I was on the light rail.

[scando]

Originally Posted by Ty Doggie

Just thought I'd rehash this as I was on the light rail....."I would love to see the creation of a small commercial node similiar to Mt. Washington Village or the small retail district along Coldspring in Roland Park created near the light rail stop that could serve both activities at the stadium and the surrounding communities."

The problem with the Cold Spring stop is that it is down in a hole relative to the surrounding area and is mainly used only by Poly/Western kids. There's plenty of retail a short distance away in Hampden and Cross Keys, but, unless you go there deliberately, retail in the LR area would be practically invisible from the street level. Also, that's down in the Jones Falls Valley and a lot of the land around there is flood prone and probably off limits to development (as is Mt Washington village, which has been flooded several times). Even the LR tracks themselves are somewhat at risk.

[Coldspring]

Originally Posted by scando

The problem with the Cold Spring stop is that it is down in a hole relative to the surrounding area and is mainly used only by Poly/Western kids. There's plenty of retail a short distance away in Hampden and Cross Keys, but, unless you go there deliberately, retail in the LR area would be practically invisible from the street level. Also, that's down in the Jones Falls Valley and a lot of the land around there is flood prone and probably off limits to development (as is Mt Washington village, which has been flooded several times). Even the LR tracks themselves are somewhat at risk.

This area is actually being explored in earnest. The Roland Park neighborhood is doing a Master Plan for their area that will be presented to the City for adoption later this summer. They identified the Coldspring Light Rail Stop as an area that need additional pedestrian enhancements and possibly some development.. The 'redevelopment' section that was discussed was actually along Coldspring Lane.. where there are several warehouses/industrial buildings on the southside of the street on the highground above the station..so it wouldnt necessarily be 'down in the hole'. I think with neighborhoods like RP behind it.. it may get some attention. They are also exploring the resurrection of an old MTA plan that involved the creation of a park and ride lot on the site currently occupied by the old green gas tower. It was scuttled because of issues with BG&E but now they are apparently willing to come to the table and resume conversations.

http://www.rolandpark.org/MasterPlanMetaBlog

[scando]

Originally Posted by Coldspring

This area is actually being explored in earnest. The Roland Park neighborhood is doing a Master Plan for their area that will be presented to the City for adoption later this summer. They identified the Coldspring Light Rail Stop as an area that need additional pedestrian enhancements and possibly some development.. The 'redevelopment' section that was discussed was actually along Coldspring Lane.. where there are several warehouses/industrial buildings on the southside of the street on the highground above the station..so it wouldnt necessarily be 'down in the hole'. I think with neighborhoods like RP behind it.. it may get some attention. They are also exploring the resurrection of an old MTA plan that involved the creation of a park and ride lot on the site currently occupied by the old green gas tower. It was scuttled because of issues with BG&E but now they are apparently willing to come to the table and resume conversations.

http://www.rolandpark.org/MasterPlanMetaBlog

This would really be a challenge. Cold Spring west of Falls Road is one of the bleakest city streets I can think of. It's like a really slow highway, all concrete and ramps and way too wide for the traffic and nothing to look at. It's kinda ironic that the RP people are promoting retail in a hole that's in a flood zone. Usually they react with horror at the thought of retail development outside the little strips that already exist in RP, but I guess if you put it in a hole with the threat of floods, that's far enough from the sacred warrens of Roland Park to be OK. I can't imagine why BGE would not want to get rid of the property with the gas tower. It's been derelict and on the tax role for decades. The topography seems to be the tail that wags the dog here. There's a series of pedestrian ramps that goes up to Cold Spring from the Light Rail stop now but there really doesn't seem to be anything there that isn't either at risk or up on that concrete mess.

If there is any development along there, it would be quite a challenge to a planner to figure out how to make it work.

[Ty Doggie]

Those buildings in Woodberry really are being redeveloped. I'm wondering how they are gonna look.

[flugzeug]

Wow! Great thread! I'm looking into buying a house in the city by years end. I am thinking the Pig Town area.

[Iggui]

looks like it's been ignored ever since PeterSmith stopped posting.

[KLynch]

There are definitely some good deals to be had in Pigtown. Definitely some characters over there, but pretty safe for the most part. It is definitely improving, not as fast as people hoped, but soaring prices in fed hill, an improved main street, and momentum from the UM Biopark will all help. Here are some articles on Pigtown.

http://southbmore.com/category/pigtown/

[flugzeug]

Originally Posted by KLynch

There are definitely some good deals to be had in Pigtown. Definitely some characters over there, but pretty safe for the most part. It is definitely improving, not as fast as people hoped, but soaring prices in fed hill, an improved main street, and momentum from the UM Biopark will all help. Here are some articles on Pigtown.

http://southbmore.com/category/pigtown/

Tonight I was in SoWeBo, At the Mencken house, such potential in that area!

[KLynch]

Yes, Union Square has made a nice comeback. Some of the best maintained homes in the city. The area between Union Square, Hollins Market and Barre Circle gets spotty, but it's definitely improving and one day will be a big cluster of nice real estate.

Here is a good Union Square article.

http://articles.baltimoresun.com/201...-homes-pigtown

[flugzeug]

Originally Posted by KLynch

Yes, Union Square has made a nice comeback. Some of the best maintained homes in the city. The area between Union Square, Hollins Market and Barre Circle gets spotty, but it's definitely improving and one day will be a big cluster of nice real estate.

Here is a good Union Square article.

http://articles.baltimoresun.com/201...-homes-pigtown

Good article, and true! About every two weeks I am in Union Square working on a photo documentation project. The more time I spend there, the more enamored with it.

[scando]

Originally Posted by flugzeug

Good article, and true! About every two weeks I am in Union Square working on a photo documentation project. The more time I spend there, the more enamored with it.

Buyer beware...Union Square definitely has its photogenic aspects, but living there is also a bit of the Wild West. I know people that have spent a lot of years there and the urban aggravation quotient is quite high. They have been robbed, had cars stolen, had their gutters and downspouts looted ($$ copper is required by the historic code) and most amazingly, several times,,,had flower plants stolen from their garden, after they chained down the pots that replaced pots which also had previously been stolen. One neighbor spent a terrified hour under her bed while intruders stripped her house and sexually "defiled" her underwear drawer. It appears that many of their lower income "neighbors" regard the yuppies of Union Square as fair game.

[Iggui]

¿is the union square area where the film "Avalon" is supposed to take place? i never heard of it, having moved here 3yrs ago, but it looks nice in pictures. not sure about being a "pioneer" in an "up and coming" area.....

[Coldspring]

Originally Posted by scando

Buyer beware...Union Square definitely has its photogenic aspects, but living there is also a bit of the Wild West. I know people that have spent a lot of years there and the urban aggravation quotient is quite high. They have been robbed, had cars stolen, had their gutters and downspouts looted ($$ copper is required by the historic code) and most amazingly, several times,,,had flower plants stolen from their garden, after they chained down the pots that replaced pots which also had previously been stolen. One neighbor spent a terrified hour under her bed while intruders stripped her house and sexually "defiled" her underwear drawer. It appears that many of their lower income "neighbors" regard the yuppies of Union Square as fair game.

I dont know what the future holds for that area.. Alot of 'clinics' and related substance abuse centers are moving into the area south of there near Hollins Market.. That may increase some of the foot traffic and other aggravating urban issues caused by some substance abuse users and sellers/traders that may loot the surrounding areas to supply their habits. Stealing flowering plants??? that is pretty low but I guess to a crack head anything is fair game...

[scando]

Originally Posted by Coldspring

I dont know what the future holds for that area.. Alot of 'clinics' and related substance abuse centers are moving into the area south of there near Hollins Market.. That may increase some of the foot traffic and other aggravating urban issues caused by some substance abuse users and sellers/traders that may loot the surrounding areas to supply their habits. Stealing flowering plants??? that is pretty low but I guess to a crack head anything is fair game...

I've been in several of the rehabbed houses in the square and they are real classics, many with original floors, moldings, hardware, doors, etc. (those houses were never in bad shape and are fairly intact). The problem is that people in those houses seem so conspicuously more affluent than many of the nearby blocks, that they just seem like meat on the table. And...yeah, flower pots and/or the flowers in them. I couldn't quite get that, but it happened more than once. Somehow it seemed like a metaphor for life on the square.

[PeterSmith]

To give a sense of that affluence gap - this home at 1420 Hollins is currently for sale a half-block from the square: http://www.trulia.com/property/30334...imore-MD-21223

Travel one more half-block on the same street, and you'll find this home at 1330 Hollins for sale: http://www.trulia.com/property/30787...imore-MD-21223

[KLynch]

Well, those houses probably take 200k to renovate, so if a shell is going for $50kish, that seems about right. They've done a nice job around the square and leading up to Hollins Market, but a couple blocks north is West Baltimore Street which is an absolute disaster. Just a ghost town of boarded up businesses and some shootings here and there.

The area has definitely made a lot of progress, and seemingly against all odds when you think about what that location was like 10 years ago. If you look at the area around the Hollins Market on Google Maps and look at it now it is a huge difference.

[scando]

Originally Posted by PeterSmith

To give a sense of that affluence gap - this home at 1420 Hollins is currently for sale a half-block from the square: http://www.trulia.com/property/30334...imore-MD-21223

Travel one more half-block on the same street, and you'll find this home at 1330 Hollins for sale: http://www.trulia.com/property/30787...imore-MD-21223

That's what I'm thinking of, the houses I've been in were vintage Guilded Era right across the block from...

[flugzeug]

Originally Posted by scando

That's what I'm thinking of, the houses I've been in were vintage Guilded Era right across the block from...

The homes in that neighborhood are so cool! Thanks for sharing!