The Daily Record: Bozzuto Moving Forward with Fells Point Luxury Apartments
December 12, 2011
A month after a Fells Point waterfront property was sold by a local developer to the Bozzuto Group for $9.5 million, the builders are moving forward with construction of a 281-unit luxury apartment mixed-use complex this week.
Union Wharf is scheduled for a groundbreaking ceremony Tuesday morning, said Jeff Kayce, a Bozzuto vice president in charge of the Baltimore development, but site development and an environmental cleanup is already underway.
The $72 million project will be adjacent to two other prominent condominium and apartment developments in an isolated corner of eastern Fells Point: Henderson’s Wharf and the Crescent. The site is at Thames and Wolfe streets.
The area, once home to blue-collar jobs on several docks and other industrial manufacturing, continues its conversion from a funky village-like atmosphere to an upscale enclave, geographically bookended by Harbor East and Canton.
That location attracted Bozzuto, which also recently developed The Fitzgerald apartments on Mt. Royal Avenue near the University of Baltimore.
“We think there’s a strong market in Baltimore for apartments, and in fact the current market is proof of that,” Kayce said. “The vacancy rate is down significantly and rents have been rising.”
The site was once a concrete plant and had been identified for development for more than a decade.
Fells Point developer Larry Silverstein had planned to build Class A office space and apartments there, part of a mixed-use development. Silverstein, owner of Union Box Co., bought the property 11 years ago from the Arundel Concrete Co. for $3.1 million, land records show. State assessment records show the site is worth $2.5 million today.
“I sold it [to Bozzuto] because we got a good price,” Silverstein said. “It’s zoned for a large apartment building, and that’s just not our business. Over the years, a couple of opportunities never materialized, didn’t make it to fruition. This is really what the property is zoned for.”
Silverstein, who has developed in Fells Point for years, said the area is primed for more upscale dwellings.
“The building next door is a fairly high price point,” Silverstein said, of the Crescent at Fells Point, where Olympic gold medal swimmer Michael Phelps lives in a waterfront unit. Apartments at the Crescent rent monthly for $2,660 for a one-bedroom to $3,610 for a two-bedroom unit.
“The market is there — it’s a premium location,” Silverstein said.
The Union Wharf project is designed to hold 281 high-end units, 500 parking spaces, most of them in a garage, retail and a clubhouse that includes a yoga room, cyber café, conference room, a game room and a 150-foot zero-edge pool on the city’s waterfront. A 4,685-square-foot restaurant is also planned.
“It’s very resort-like,” Kayce said. “We’re contributing to something that’s already marketable. We’re really trying to pick up on the cues that Fells Point already has — shipbuilding, brick, wood, concrete, and hotels and restaurants to pull from the most progressive.”
The development is expected to open in late 2013.
Baltimore has helped with the project by amending a planned unit development for the site multiple times, the latest being in May, Kayce said. That set the design and the mission of the Union Wharf.
The first step, he added, is a $1.3 million cleanup of the site now labeled a Brownfield environmentally because of the former concrete plant there.
Bozzuto’s partners in the development are Cigna and Chicago-based Pritzker Realty Group. PNC Bank is financing the debt, Kayce said.
The developer received no tax increment financing or payment in lieu of taxes incentives, he added, but the site is eligible for Enterprise Zone tax credits and Brownfield tax credits as well as a $275,000 Brownfield redevelopment incentive program grant from the state Department of Business and Economic Development.
The city spent more than $1 million to build a bulkhead and extend a waterfront promenade at the Union Wharf site in 2007. But because of an accounting error in collecting repayment from an escrow fund by the City Solicitor’s office in 2007, only $400,000 was repaid by Silverstein’s company, Union Wharf LLC.
The city’s Board of Estimates settled for the $400,000 in September 2010 to enable “the development to go forward,” said Solicitor George A. Nilson.