Goldman Takes Stake in Under Armour CEO's Baltimore Development--Update
15 September 2017 - 4:09AM
Dow Jones News
By Liz Hoffman
Under Armour Inc. Chief Executive Kevin Plank has snared Goldman
Sachs Group Inc. as the first private investor in his ambitious
Port Covington development project with a commitment of $233
million.
The project seeks to transform a 235-acre industrial peninsula
in South Baltimore into a $5.5 billion mini-city of offices, homes,
stores, restaurants, parks and a new campus for the
athletic-apparel company he runs.
Goldman will jointly own the project with Sagamore Development
Co., a private real-estate firm owned by Mr. Plank, the companies
said. Early spending will be directed at developing roads and other
infrastructure needed for the site, once home to railway yards and
coal dumps.
Goldman's investment is the first outside private money
committed to the project and could provide key support for the more
than $1 billion in public support that Sagamore is seeking from
local, state and federal agencies.
Critics of the project, including community activists and the
American Civil Liberties Union, have argued that the development
won't benefit the entire city and that there aren't adequate
measures to ensure lower-income people can afford the thousands of
planned homes.
Sagamore's pursuit of public funding has also drawn criticism,
particularly its reliance on tax-increment financing, an
arrangement under which future property taxes are pledged to repay
bonds. Last year, the city of Baltimore approved the use of $660
million of such bonds.
Sagamore is also seeking more than $500 million in state and
federal funding for a Maryland light-rail extension and
improvements to Interstate 95.
Corporations are playing an increasingly important role in
addressing urban inequality and driving revitalization efforts in
blighted neighborhoods. In Cincinnati, corporate capital helped
transform the Over-the-Rhine neighborhood just north of downtown
from one packed with vacant homes and a hot spot of violent crime
to one where startups and award-winning restaurants are
flocking.
Another bank, J.P. Morgan Chase, announced Thursday that it will
be pledging $40 million over three years to help ailing
neighborhoods in Chicago through grants to nonprofits and other
community-based organizations.
Goldman's investment in the Baltimore project is a critical show
of support from the private sector. Private capital is often a
prerequisite for the issuance of bonds backed by public
agencies.
The investment is the largest ever for Goldman's urban-investing
division, which backed similar, though smaller-scale, renewal
efforts in Newark and Queens, New York.
Mr. Plank is behind a broad revitalization effort in Baltimore,
where he moved Under Armour in 1998. Sagamore, which he named for a
racehorse farm he bought in 2007, has already redeveloped a former
garage into a startup incubator and built a whiskey distillery and
upscale hotel.
Baltimore has thrown its hat into the ring to host Amazon.com
Inc.'s next headquarters. The city quickly raised its hand after
the retail giant last week announced a search for a second North
American headquarters, which could bring 50,000 jobs.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
September 14, 2017 13:54 ET (17:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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