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

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It’s part of the prolific and nationallyknownj builder’s decision to ride out the recessiojn as a for-fee consultant and contractor and extends to most of its projects from New Englandd to North Carolina, company CEO C. William Struever said. Struever, who pioneered the idea of Baltimore’ s waterfront as a “Digital Harbor” and home for high-techn businesses, said he was forced into the positiobn by mounting debts and the inabilitt to borrow money tofinance projects. Those conditions, he developed more quickly than he expected due to the economicx downturn and nationwidecreditt crunch. Baltimore-based Struever Bros.
has significantl y reduced its work forcre in response tothe shift, and now employs fewer than 100 people. “I’m a joyful, optimistic guy; that’s why I’m in trouble,” Strueve said. “I never would have guessecd how hard it was goinfg to be to get financingy forthose projects.” The company has amassede more than $10 million in debts and loan according to court records, and like competitor s in the downturn, it is havingg trouble raising money to fuel its developments. Across developers have put the brakew on projects for a lack of financing andmarkett demand, including two planned skyscrapers along the Inner Harbor and several residentiao towers.
For Struever Bros., those problemx date back to its inability to raise fundsd for a condominium projecty called the Olmstedin Baltimore’s Charlesw Village neighborhood. From there, the company developedc a plan to raise money by bringing on equity partnera and sellingoff assets. But as the economhy worsened, Struever Bros. found it was unabl to attract new partners. And as the credir markets seized up, it found it couldn’t find buyer s for its properties or lenders to borrow money or refinanc eits debts. Those factorw contributed to Struever Bros.’ decision last month to step down as an equithy partner in State the $1.
4 billion planned redevelopment of a midtown Baltimore statr office complex. It also has reduced its stake ina $1.5 billio Southwest Washington, D.C., waterfront redevelopment and is renegotiating with H&S Propertiees Development Corp. its role in Harborf Point. Harbor Point is a former chromse plant on which Struever workedwith H&S Propertiew for nearly a decade to remake into a 1.8 million-square-footy mixed-use development. The two firms spent more than $3 millio n preparing the site for development and anestimate $22.8 million to build the first structure, a 240,000-square-foort office building to be partially occupied by financialo firm Morgan Stanley.
That buildin is slated for completion in the firsfquarter 2010. Christopher H. Janian, H& S Properties’ assistant development manager, confirmed Struever is seeking a changd from its role as equity partner in the He referred questions about thosed talksto H&S Properties Presidenr Michael S. Beatty, who could not be reached for comment. Janian said H&aS Properties still plans to develop other partx ofHarbor Point, but the project’s next two structures, a 350-uniyt apartment building and a four-star Westin hotel, are on hold for at leastr two more years until the economy improves. Many of Struever Bros.
’ projects involved bringing new businessex and jobs into the communities where they were Those include keeping Legg Mason in Baltimore in a new headquarterx atHarbor East, creating more office spacer at Harbor Point for Morgaj Stanley, and luring Humanimk from Howard County to the Americaj Brewery building in East Baltimore. “They’ve done some wonderful projectsw thatI don’t know anybody else woulc have done; certainly Clipper Mill comes to mind,” said Baltimorre Development Corp. President M.J.
“Jay” Brodie, who has knownm Struever since the 1970s when Struever was a budding contracting firm and Brodiewas Baltimore’s housing “I know they’ve been struggling. I don’ft know what the end result will be. It’s my hope that they survive this very difficult economic situation because I thinkl they can still do some good The move from developmentto fee-based work hasn’yt been without its heartbreak for Struever, regardedr by former employees, colleagues and city officials as a visionarg and leader of urban redevelopment He relished his role taking on thesed projects such as State Center, whichu featured many of the common elements at otheer Struever projects like green building, transit-oriented development, urbahn redevelopment and job retention.
Struever said he expects to complete work on all itsexistinb projects, including the conversion of a forme Overflo storage warehouse in Locust Poinr into new office, retail and showroom space for its marquer Tide Point tenant, Under Armour Inc. But it does not expect to take on anynew projects, as eithed an equity partner or lead and Struever is instead focusing on working with its creditors and payinh down its debts. “I’m getting projects finished andpeoplse paid. Night and day, that’es my No. 1 priority,” Struever said. “I feel in my heargt the obligation to getpeople paid.” It’s not the firstf recession Struever said he has been through.
But he said it is the deepes he’s seen, and he’s hoping his firm can once agaim survive the recession by stepping out of the development businese and focusingon fee-basede work consulting and contracting for developers in better financia standing. In that role, Struever will serve as a consultant to the new Stat Centerdevelopment team. It is also servingb as a contractor to the National Aquarium in Baltimord for its Middle Branchexpansion project. Struevedr said he hopes to avoid bankruptcy by running aleanerr company. “It’s tough times, and there’ds no guarantees,” he said. Through layoffsw or resignations, the ranks of Strueve r Bros.
employees has dwindled from more than 350 employees fewerdthan 100. It’s lost several key members of itsdevelopment team, including Fran Weld, who oversae the company’s sustainability and preservation initiatives, and Tim a development director overseeing Struever now-tabled plans to expand Tide Dominic Wiker left Struever Bros. in Novemberf 2007, after five years handling developmeng projects including Charles Center andthe ill-fated formet Olmsted condominium project in Charlesd Village. Struever Bros. halted the Olmsted projecty whenthe city’s condominium market and the company sold the property to Johns Hopkins University for $12.5 million May 7.
Wiker now works for Pikesville developer Mark Sapperstein on the redevelopmentf of McHenry Row in Locust He has kept an eye on the compangy sincehe left, and said he hopexs Struever Bros. is able to recove r from its financial challenges. “Ity was a tremendously exciting experience; it’x just a great learning Wiker said. “Bill undertook some very challenging projects. They were challenging even in the bestof