Paterakis' legacy

John Paterakis Sr.‘s death Sunday came at an auspicious time for evaluating his legacy. The bakery magnate, developer and philanthropist in Baltimore’s Greek community left an indelible mark on his home town, reshaping it physically and politically in ways that loomed over this year’s debate on the proposed redevelopment of Port Covington. His example became one that the city simultaneously followed and rejected in ways that could resonate for years to come.

As unassuming as Mr. Paterakis was personally, he was audacious when it came to business. He took risks and always had an eye for the future — both in his bakeries, where he relentlessly modernized to keep ahead of the competition, and in his real estate development ventures, where he made massive personal investments in what would become Harbor East. In a city that often exhibits something of an inferiority complex to neighbors like Washington and Philadelphia, he saw the possibility for growth and expansion. He saw a market for high-end apartments and offices, and he didn’t worry that building something new would cannibalize the old.

He was the kind of developer who would decide to build a new, fancier home for Whole Foods right next to the grocer’s existing location in Harbor East on the assumption that some new tenant would come along to fill the old space — just like Transamerica came along to replace Legg Mason when the financial services firm decamped from Baltimore’s traditional downtown to Harbor East. Construction costs are ballooning on the new Whole Foods/luxury apartment project in a way that might not make sense under the current economics of Baltimore’s rental market, but the Paterakis family and its partners haven’t flinched. In fact, they’re eyeing more development opportunities in the neighborhood.

If Harbor East didn’t exist, it’s almost impossible to imagine that Under Armour founder Kevin Plank‘s vision for Port Covington would have developed the way it did. To be sure, the fast-growing sports apparel company would have needed a new headquarters. But the idea of placing it in the context of a decades-long plan for new apartments, retail, offices, parks and hotels on hundreds of acres of South Baltimore waterfront only seems plausible because Mr. Paterakis proved that big bets on Baltimore’s future can pay off. When he started building Harbor East, Mr. Paterakis seemed crazy. Because he succeeded, Mr. Plank merely looks optimistic.

But in as much as Mr. Paterakis came to symbolize a bullishness about Baltimore’s future, he also served as Exhibit A in the case made by critics of the city’s public support for developers. Harbor East was built not just on Mr. Paterakis’ substantial personal investments but also on raft of tax abatements and other public subsidies. The Marriott Waterfront Hotel in Harbor East, for example, was built under a deal that allows it to pay just $1 a year in property taxes for 25 years.

Mr. Paterakis wasn’t just any businessman; he was deeply connected in City Hall and the State House thanks in no small part to his extensive contributions to political campaigns (including some that led to guilty plea on two misdemeanor campaign finance violations in 2009). It’s true that he bought the land that would form the bulk of Harbor East at the personal request of then-Mayor William Donald Schaefer after another development plan failed through — and that the city reneged on a plan to buy it back from him. He took a big risk in bailing out the city then, and it could have failed badly. But it’s also true that his status as an insider facilitated opportunities that he otherwise likely never would have gotten.

Source link