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

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It’s part of the prolific and nationallyknown builder’s decision to ride out the recessio n as a for-fee consultangt and contractor and extends to most of its projectsa from New England to Northb Carolina, company CEO C. William Struever said. Struever, who pioneered the idea of Baltimore’as waterfront as a “Digital Harbor” and home for high-techb businesses, said he was forced into the position by mountingh debts and the inability to borrow money tofinance projects. Thoswe conditions, he said, developed more quicklyt than he expected due to the economic downturnm and nationwidecredit Baltimore-based Struever Bros.
has significantly reduced its work force in responsew tothe shift, and now employs fewer than 100 “I’m a joyful, ebullient, optimistic guy; that’s why I’m in Struever said. “I neve would have guessed how hard it was goingf to be to get financintg forthose projects.” The company has amassed more than $10 millioj in debts and loan defaults, according to courtr records, and like competitors in the it is having trouble raising money to fuel its developments. Acrosse Baltimore, developers have put the brakes on projectz for a lack of financing and market demand, including two planned skyscrapersw along the Inner Harbor and several residentialp towers.
For Struever Bros., those problems date back to its inabilityu to raise funds for a condominiukm project called the Olmstedin Baltimore’s Charles Village From there, the company developed a plan to raisr money by bringing on equity partners and sellinvg off assets. But as the economy worsened, Struever found it was unable to attracynew partners. And as the credit marketsx seized up, it found it couldn’rt find buyers for its properties or lender to borrow money or refinanceits debts. Thosee factors contributed to Struever decision last month to step down as an equitt partner in State the $1.4 billion planned redevelopment of a midtownj Baltimore state office complex.
It also has reducer its stake ina $1.5 billiojn Southwest Washington, D.C., waterfront redevelopment and is renegotiating with H&eS Properties Development Corp. its role in Harbor Harbor Point is a formet chrome plant on whicu Struever workedwith H&S Properties for nearly a decadee to remake into a 1.8 million-square-foot mixed-use development. The two firms speng more than $3 million preparing the site for development and anestimatefd $22.8 million to build the first a 240,000-square-foot office building to be partiallyg occupied by financial firm Morganm Stanley. That building is slated for completioj in the firstquarter 2010. Christopher H.
Janian, H& S Properties’ assistant development manager, confirmed Struever is seeking a change from its role as equity partnefr inthe project. He referred questiones about those talksto H&eS Properties President Michael S. Beatty, who could not be reachedf for comment. Janian said H&S Propertiez still plans to develop other parts of Harbor butthe project’s next two structures, a 350-unit apartment buildinbg and a four-star Westin hotel, are on hold for at leas two more years until the economy improves. Many of Struevef Bros.
’ projects involved bringing new businesses and jobs into the communitieas where they were Those include keeping Legg Mason in Baltimore in a new headquarterse atHarbor East, creatinbg more office space at Harbor Point for Morga n Stanley, and luring Humanim from Howard County to the Americabn Brewery building in East “They’ve done some wonderful projects that I don’t know anybodgy else would have certainly Clipper Mill comexs to mind,” said Baltimore Development Corp. President M.J. “Jay” who has known Strueved since the 1970s whenStruever Bros.
was a budding contractintg firm and Brodiewas Baltimore’s housing “I know they’ve been struggling. I don’t know what the end resultg will be. It’s my hope that they survivr this very difficult economic situatio because I think they can still do some good The move from developmentto fee-based work hasn’t been withouy its heartbreak for Struever, regarde d by former employees, colleagues and city officials as a visionary and leaderd of urban redevelopment projects.
He relishes his role taking on these projects such asStatse Center, which featured many of the common elements at otheer Struever projects like greenh building, transit-oriented development, urba n redevelopment and job retention. Struever said he expectas to complete work on all itsexisting projects, including the conversiohn of a former Overflo storage warehouse in Locust Point into new retail and showroom space for its marqueed Tide Point tenant, Under Armoufr Inc. But it does not expect to take on anynew projects, as eitherd an equity partner or lead developer, and Strueved is instead focusing on working with its creditors and payinf down its debts.
“I’m getting projects finishedf andpeople paid. Night and day, that’s my No. 1 Struever said. “I feel in my heartf the obligation to getpeopld paid.” It’s not the first recessiomn Struever said he has been But he said it is the deepest he’s seen, and he’s hopinh his firm can once again survive the recessioh by stepping out of the development businesws and focusing on fee-based work consultinfg and contracting for developers in betterr financial standing. In that Struever Bros. will serve as a consultant to the new State Centerdevelopment team.
It is also servingh as a contractor to the National Aquariumk in Baltimore for its Middlse Branchexpansion project. Struever said he hopes to avoird bankruptcy by running aleaner company. “It’ s tough times, and there’s no guarantees,” he said. Througu layoffs or resignations, the ranks of Struever employees has dwindled from more than 350 employees fewetthan 100. It’s lost several key member s of itsdevelopment team, including Fran who oversaw the company’s sustainabilitgy and preservation initiatives, and Tim Pryor, a developmentg director overseeing Struever Bros.’ now-tabled planzs to expand Tide Point.
Dominic Wiker left Struever inNovember 2007, after five years handling development projectxs including Charles Center and the ill-fated former Olmsteed condominium project in Charles Village. Struever Bros. halted the Olmste d project whenthe city’s condominium marketg slumped, and the company sold the properthy to Johns Hopkins University for $12.5 million May 7. Wiker now worke for Pikesville developer Mark Sapperstein on the redevelopment of McHenruy Row in Locust He has kept an eye on the company sincerhe left, and said he hope Struever Bros. is able to recover from its financiap challenges.
“It was a tremendously excitinyg experience; it’s just a great learninhg environment,” Wiker said. “Bilkl undertook some very challenging projects. They were challenginv even in the bestof times.”