Baltimore Business Journal: Harbor East's Next Gem Will be a Keeper for Bozzuto, Paterakis Families
October 15, 2014
The partnership Bozzuto Group and H&S Properties Development Corp. has formed to develop a new apartment tower is designed to keep the Harbor East building in both companies' portfolios for the long term.
"It's a long-term, 'forever' kind of hold," Bozzuto President Toby Bozzuto said of the $100 million, 291-unit apartment building with 60,000 square feet of ground-floor retail. "We believe if we build the right building and make it architecturally significant, it'll be a generational hold."
Bozzuto is in the midst of selling the company's Union Wharf project in Fells Point less than a year after completing it. In that deal, the company's equity partners are looking for a quick exit, but that's not likely to happen with H&S Properties, which has mostly shunned selling any of its properties in Harbor East.
By "generational hold," Bozzuto means the Harbor East project is meant to be passed down to the younger generations in both families. And in many ways, Bozzuto and H&S Properties are very similar when it comes to their familial structure.
Toby Bozzuto's father, Tom Bozzuto, is chairman and CEO of the Bozzuto Group. Tom named Toby president of the Bozzuto Group in 2009. The most well known executive at H&S Bakery — the parent company of H&S Properties — has long been John Paterakis Sr. But his son, Bill Paterakis, is spearheading the partnership on the new apartment building.
Bill Paterakis, who has not responded to requests for comment, is president of Northeast Foods, a division of H&S Bakery that is one of the larges producers of McDonald's buns. The Paterakis and Bozzuto families started working together when the Greenbelt company's apartment management arm was tapped to take over H&S Properties' Promenade building in Harbor East.
The companies also partnered on Spinnaker Bay, which Bozzuto and H&S considered selling in 2007. Bozzuto said the companies received a slew of attractive offers for the property, but in the end decided to hold onto the building.
"At the time, H&S decided not to sell," Bozzuto said. "I'm glad we didn't."
The Promenade was one of the first buildings in Harbor East, which has since gone on to become one of the highest-end neighborhoods developed in Baltimore. Home to marquee names such as the Four Seasons hotel, the Waterfront Marriott and Legg Mason, nearly all of the buildings have been developed by H&S Properties on land the elder Paterakis acquired in the 1980s.
"We are only partners on this one site, but knowing them and how they're interested in continuing to develop that community, Bozzuto is really pleased to be part of that," Bozzuto said. "We have tremendous respect for the Paterkais family and creating generational assets in Baltimore."