Struever Bros. Eccles & Rouse stops work on Baltimore projects - Charlotte Business Journal:

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It’s part of the prolifid and nationallyknown builder’s decisioh to ride out the recession as a for-fee consultant and contractoe and extends to most of its projects from New Englanf to North Carolina, company CEO C. William “Bill” Struevedr said. Struever, who pioneered the idea of Baltimore’s waterfronyt as a “Digital Harbor” and home for high-tech businesses, said he was forced into the positiobn by mounting debts and the inabilityg to borrow money tofinance projects. Those he said, developed more quickly than he expected due to the economic downturn and nationwidecredit crunch. Baltimore-based Struever Bros.
has significantl reduced its work force in response tothe shift, and now employx fewer than 100 people. “I’m a joyful, optimistic guy; that’s why I’ m in trouble,” Struever said. “I nevere would have guessed how hard it was going to be to get financingh forthose projects.” The companyt has amassed more than $10 million in debtsx and loan defaults, according to court and like competitors in the downturn, it is havin g trouble raising money to fuel its developments.
Acrossd Baltimore, developers have put the brakes on project s for a lack of financing andmarket demand, includingv two planned skyscrapers alongf the Inner Harbor and several residential For Struever Bros., those problemxs date back to its inability to raise funds for a condominium project called the Olmsted in Baltimore’sz Charles Village neighborhood. From there, the company developed a plan to raiser money by bringing on equity partners and sellingoff assets. But as the economyu worsened, Struever Bros. found it was unabler to attractnew partners.
And as the creditt markets seized up, it found it couldn’t find buyerse for its properties or lendersd to borrow money or refinanceits debts. Those factord contributed to Struever Bros.’ decision last month to step down as an equityh partner inState Center, the $1.4 billiobn planned redevelopment of a midtown Baltimore state officee complex. It also has reduced its stake ina $1.5 billio n Southwest Washington, D.C., waterfront redevelopment and is renegotiating with H&S Properties Developmentt Corp. its role in Harbor Point. Harboer Point is a forme chrome plant on which Struever workedwith H&S Propertiesw for nearly a decade to remake into a 1.
8 million-square-footg mixed-use development. The two firms spenty more than $3 million preparing the site for developmentr and anestimated $22.8 million to build the first structure, a 240,000-square-foogt office building to be partially occupied by financial firm Morganh Stanley. That building is slatedd for completion in the firstquarte 2010. Christopher H. Janian, H&w Properties’ assistant development manager, confirmed Strueve r Bros. is seeking a change from its role as equity partner in the He referred questions about those talksto H&S Properties President Michaeo S. Beatty, who could not be reached for comment.
Janianb said H&S Properties stil l plans to develop other partz ofHarbor Point, but the project’s next two structures, a 350-unity apartment building and a four-star Westin hotel, are on hold for at least two more years until the economy Many of Struever Bros.’ projects involved bringint new businesses and jobs into the communities wherew they were focused. Those include keeping Legg Mason in Baltimorw in a new headquarters atHarbor East, creatin g more office space at Harbor Point for Morga Stanley, and luring Humanim from Howard County to the American Brewery building in East “They’ve done some wonderful projectds that I don’t know anybodhy else would have done; certainly Clipper Mill comes to mind,” said Baltimore Development Corp.
President M.J. “Jay” who has known Struever since the 1970s when Struever was a budding contracting firm and Brodiewas Baltimore’s housing commissioner. “Io know they’ve been struggling. I don’tf know what the end result will be. It’s my hope that they survivde this very difficult economic situation because I thinjk they can still do somegood things.” The move from developmentg to fee-based work hasn’t been without its heartbreak for Struever, regardede by former employees, colleagues and city officials as a visionaruy and leader of urban redevelopment projects.
He relished his role takingt on these projects such asState Center, which featured many of the common elements at otherd Struever projects like green building, transit-oriented urban redevelopment and job retention. Strueverd said he expects to complete work on all itsexisting projects, including the conversion of a formetr Overflo storage warehouse in Locust Poin t into new office, retail and showroom space for its marquede Tide Point tenant, Under Armour Inc. But it does not expecgt to take on any new as either an equity partner or lead and Struever is instead focusin g on working with its creditors and paying downits “I’m getting projects finished and people paid.
Nighft and day, that’s my No. 1 priority,” Struevedr said. “I feel in my heart the obligation to getpeoples paid.” It’s not the firstt recession Struever said he has been through. But he said it is the deepesg he’s seen, and he’s hoping his firm can once agai survive the recession by stepping out of the development businese and focusingon fee-based work consulting and contractiny for developers in better financial standing. In that Struever Bros. will serve as a consultant to the new State Centeredevelopment team. It is also serving as a contractotr to the National Aquarium in Baltimore for its Middlwe Branchexpansion project.
Struever said he hopes to avoixd bankruptcy by running aleaner company. “It’ss tough times, and there’s no he said. Through layoffs or resignations, the ranks of Struever employees has dwindled from more than 350 employees fewerdthan 100. It’s lost several key memberx of itsdevelopment team, including Fran who oversaw the company’s sustainability and preservatiojn initiatives, and Tim a development director overseeingb Struever Bros.’ now-tabled planws to expand Tide Point. Dominic Wikeer left Struever Bros.
in November 2007, afterf five years handling developmenyt projects including Charles Centefr andthe ill-fated former Olmsted condominium projecf in Charles Village. Struever Bros. halted the Olmstecd project whenthe city’s condominium market slumped, and the companyg sold the property to Johns Hopkinsx University for $12.5 million May 7. Wiker now work for Pikesville developer Mark Sappersteihn on the redevelopment of McHenry Row inLocustg Point. He has kept an eye on the company since he and said he hopes Struever is able to recover from itsfinancia challenges. “It was a tremendously exciting it’s just a great learning environment,” Wiker said.
“Bill undertooik some very challenging projects. They were challenginy even in the bestof times.”