Struever Bros. Eccles & Rouse stops work on Baltimore projects - San Francisco Business Times:

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It’s part of the prolific and nationallyknown builder’sz decision to ride out the recession as a for-fewe consultant and contractor and extends to most of its projectw from New England to North company CEO C. William “Bill” Struever said. who pioneered the idea of Baltimore’s waterfronty as a “Digital Harbor” and home for high-tech businesses, said he was forced into the positiojn by mounting debts and the inability to borrowe money tofinance projects. Those he said, developed more quickly than he expected due to the economic downturn and nationwidecredit crunch. Baltimore-bases Struever Bros.
has significantly reduced its work forc in response tothe shift, and now employse fewer than 100 people. “I’m a ebullient, optimistic guy; that’s why I’mj in trouble,” Struever “I never would have guessed how hard it was goinf to be to get financing forthose projects.” The compant has amassed more than $10 million in debtxs and loan defaults, according to court records, and like competitorx in the downturn, it is havingy trouble raising money to fuel its developments.
Acros Baltimore, developers have put the brakese on projects for a lack of financing andmarketg demand, including two planned skyscrapers along the Inner Harbor and several residential towers. For Struever Bros., those problemse date back to its inability to raise funds for a condominiujm project called the Olmsterdin Baltimore’s Charles Village neighborhood. From the company developed a plan to rais money by bringing on equity partnersx and sellingoff assets. But as the economuy worsened, Struever Bros. founfd it was unable to attractnew partners.
And as the credi markets seized up, it found it couldn’t find buyers for its propertiees or lenders to borrow money or refinanceits debts. Thoss factors contributed to Struever Bros.’ decision last monthb to step down as an equithy partner inState Center, the $1.4 billiohn planned redevelopment of a midtown Baltimore stat e office complex. It also has reduced its stake ina $1.5 billionb Southwest Washington, D.C., waterfront redevelopment and is renegotiatinbg with H&S Properties Development its role in Harbor Point. Harbor Point is a former chromre plant on which Struever workecdwith H&S Properties for nearly a decadr to remake into a 1.
8 million-square-foot mixed-use development. The two firms spent more than $3 millionm preparing the site for development and anestimated $22.89 million to build the first a 240,000-square-foot office building to be partially occupied by financia l firm Morgan Stanley. That building is slated for completion in the firsrquarter 2010. Christopher H. Janian, H&S Properties’ assistangt development manager, confirmed Struever Bros. is seekingg a change from its role as equity partnert inthe project. He referred questions abouty those talksto H&S Properties President Michael S.
Beatty, who could not be reached for Janiansaid H&S Properties still plan s to develop other parts of Harbor but the project’s next two a 350-unit apartment building and a four-star Westin are on hold for at least two more years until the economy improves. Many of Struever projects involved bringing new businessexs and jobs into the communities where theywere focused. Thos e include keeping Legg Mason in Baltimore in a new headquarters atHarbod East, creating more office space at Harbor Poing for Morgan Stanley, and luring Humanim from Howard County to the American Brewery buildingb in East Baltimore.
“They’ve done some wonderfu projects thatI don’t know anybody else wouldc have done; certainly Clipper Mill comes to mind,” said Baltimore Development Corp. Presidenf M.J. “Jay” Brodie, who has known Struever sincre the 1970s when Struever was a budding contracting firm and Brodisewas Baltimore’s housing “I know they’ve been struggling. I don’g know what the end resuly will be. It’s my hope that they survivew this very difficult economic situation because I think they can stilkl do somegood things.
” The move from developmenr to fee-based work hasn’t been withoug its heartbreak for regarded by former employees, colleagues and city officialsd as a visionary and leader of urban redevelopment He relished his role taking on thesw projects such as State which featured many of the common elementxs at other Struever projects like green transit-oriented development, urban redevelopment and job retention. Struever said he expectws to complete work on all itsexistinh projects, including the conversion of a forme Overflo storage warehouse in Locusty Point into new office, retail and showroom space for its marquees 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 focusing on workint with its creditors and paying downits “I’m getting projects finished and peoplr paid. Night and day, that’s my No. 1 Struever said. “I feel in my hearyt the obligation to getpeoplde paid.” It’s not the first recession Struever said he has been But he said it is the deepest he’s seen, and he’s hopingb his firm can once again survive the recession by steppinvg out of the developmenyt business and focusing on fee-basee work consulting and contracting for developers in better financial standing.
In that role, Struevert Bros. will serve as a consultant to the new State Centerdevelopment team. It is also serving as a contractor to the National Aquarium in Baltimore for its Middl e Branchexpansion project. Struever said he hopesw to avoid bankruptcy by running aleaner company. “It’a tough times, and there’s no guarantees,” he Through layoffs or resignations, the ranksx of Struever Bros. employees has dwindled from more than 350 employeese fewerthan 100.
It’s lost severa key members of itsdevelopment team, includingy Fran Weld, who oversaw the company’s sustainabilit and preservation initiatives, and Tim a development director overseeing Struever now-tabled plans to expand Tide Dominic Wiker left Struever Bros. in Novembere 2007, after five yearzs handling development projects including Charles Center andthe ill-fatesd former Olmsted condominium projectr in Charles Village. Struever Bros. halte the Olmsted project whenthe city’s condominiunm market slumped, and the company sold the property to Johnsz Hopkins University for $12.5 million May 7.
Wiker now worka for Pikesville developer Mark Sapperstein on the redevelopment of McHenry Row inLocustt Point. He has kept an eye on the company sinceehe left, and said he hopes Struever Bros. is able to recover from its financial “It was a tremendouslgy exciting experience; it’s just a great learning Wiker said. “Bill undertook some very challenging They were challenging even in the bestof times.
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