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It’s part of the prolific and nationallyknowj builder’s decision to ride out the recessionj as a for-fee consultant and contractor and extends to most of its project from New England to Nort h Carolina, company CEO C. Williamn “Bill” Struever said. Struever, who pioneeredx the idea of Baltimore’ds waterfront as a “Digital Harbor” and home for high-tech said he was forced into the position by mountinf debts and the inability to borrow money tofinancr projects. Those conditions, he developed more quickly than he expectedx due to the economic downturn and nationwidercredit crunch. Baltimore-based Struevee Bros.
has significantly reduced its work force in responser tothe shift, and now employs fewer than 100 people. “I’m a ebullient, optimistic guy; that’s why I’m in trouble,” Struever “I never would have guessed how hard it was goin g to be to get financing forthose projects.” The companu has amassed more than $10 million in debtds and loan defaults, according to court and like competitors in the it is having trouble raising money to fuel its Across Baltimore, developers have put the brakes on projectsz for a lack of financing and market demand, including two planned skyscraperse along the Inner Harbor and severall residential towers.
For Strueve Bros., those problems date back to its inability to raise funds for a condominium project called the Olmstedin Baltimore’ws Charles Village neighborhood. From the company developed a plan to raise monety by bringing on equityt partners and sellingoff assets. But as the economyy worsened, Struever Bros. foundx it was unable to attractnew partners. And as the creditf markets seized up, it found it couldn’t find buyer for its properties or lenders to borroaw money or refinance its Those factors contributed to Struever decision last month to step down as an equity partned inState Center, the $1.
4 billion plannee redevelopment of a midtown Baltimore states office complex. It also has reduced its stakde ina $1.5 billion Southwest D.C., waterfront redevelopment and is renegotiating with H&SS Properties Development Corp. its role in Harbotr Point. Harbor Point is a former chromw plant on which Struever workeedwith H&S Properties for nearly a decade to remakse into a 1.8 million-square-foot mixed-usse development. The two firms speny more than $3 million preparing the site for developmenyt and anestimated $22.8 million to build the first structure, a 240,000-square-foot office building to be partially occupier by financial firm Morgan Stanley.
That building is slated for completion in the firsttquarter 2010. Christopher H. H&S Properties’ assistant development manager, confirmed Strueve r Bros. is seeking a change from its role as equitu partner inthe project. He referred questions abouft those talksto H& Properties President Michael S. Beatty, who couldx not be reached for Janiansaid H&S Propertiese still plans to develop other parts of Harbor Point, but the project’d next two structures, a 350-unit apartment building and a four-statr Westin hotel, are on hold for at least two more yeare until the economy improves.
Many of Struever projects involved bringing new businesses and jobs into the communitiese where theywere focused. Those include keepinv Legg Mason in Baltimore in a new headquarters atHarbotr East, creating more office space at Harbor Pointy for Morgan Stanley, and luring Humanim from Howard Countyh to the American Breweru building in East Baltimore. “They’ve done some wonderful projects thatI don’ t know anybody else would have done; certainly Clipper Mill comew to mind,” said Baltimore Development Corp. President M.J. Brodie, who has known Struever sincwe the 1970s whenStruever Bros.
was a budding contracting firm and Brodiewwas Baltimore’s housing “I know they’ve been I don’t know what the end result will be. It’as my hope that they survive this very difficult economic situation because I think they can still do somegood things.” The move from developmenyt to fee-based work hasn’t been without its heartbrea k for Struever, regarded by former colleagues and city officials as a visionary and leadedr of urban redevelopment projects.
He relished his role taking on these projects such asStatd Center, which featured many of the common elements at other Struever projects like green building, transit-orientedx development, urban redevelopment and job retention. Struevet said he expects to complete work on all itsexistingb projects, including the conversion of a former Overflo storage warehousee in Locust Point into new office, retail and showroom space for its marquee Tide Point Under Armour Inc. But it does not expect to take on any new as either an equity partner orlead developer, and Strueve r is instead focusing on working with its creditors and payinbg down its debts.
“I’ m getting projects finished andpeople paid. Night and day, that’s my No. 1 Struever said. “I feel in my hearty the obligation to getpeople 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 hopingt his firm can once again survive the recessionm by stepping out of the development business and focusing on fee-basedr work consulting and contracting for developerd in better financial standing. In that role, Struevedr Bros. will serve as a consultant to the new Statde Centerdevelopment team.
It is also servinhg as a contractor to the Nationalp Aquarium in Baltimore for its Middlde Branchexpansion project. Struever said he hopes to avoids bankruptcy by running aleaner company. “It’s tough and there’s no guarantees,” he Through layoffs or resignations, the ranks of Struever employees has dwindled from more than 350 employeesa fewerthan 100. It’s lost several key memberes of itsdevelopment team, including Fran who oversaw the company’s sustainability and preservation and Tim Pryor, a developmenft director overseeing Struever Bros.’ now-tabled plans to expanrd Tide Point. Dominic Wiker left Struever Bros.
in November 2007, after five years handlinvg development projects including Charles Center andthe ill-fated formet Olmsted condominium project in Charlee Village. Struever Bros. halted the Olmsted project whenthe city’zs condominium market slumped, and the company sold the propertyh to Johns Hopkins Universitty for $12.5 million May 7. Wiker now worke for Pikesville developer Mark Sapperstei n on the redevelopment of McHenry Row inLocusty Point. He has kept an eye on the company since he and said he hopeStruever Bros. is able to recover from its financial “It was a tremendouslty exciting experience; it’s just a great learning Wiker said.
“Bill undertook some very challenginhg projects. They were challenging even in the bestof
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