Cross Street Market will be turned over to private management, under a deal reached between the city and a large developer active in South Baltimore.
Caves Valley Partners has reached an agreement with the Baltimore Public Markets Corp., the nonprofit which runs Baltimore’s six public markets, to take over operations of Cross Street Market, renovating the building and managing the market.
The firm plans to start a $6.5 million overhaul of the market this spring, adding more light to the building, reconfiguring the interior and shaking up the tenant mix, Mirmiran said.
The city, through the public markets corporation, is contributing $2 million, said Kaliope Parthemos, chief of staff to Mayor Stephanie Rawlings-Blake.
The long awaited announcement comes nearly two years after the public markets corporation formally sought bids for managing the Federal Hill institution. For years, neighbors have called for improvements to the building, which dates to the 1950s.
Parthemos described the deal as a “win-win,” saying it would help the market meet neighborhood desires, addressing capital repair needs and offering new food options, while acting as a a catalyst for further improvements.
“The focus should be on continuing to create an environment that is open to the public, that provides diverse food options and still serves as an anchor for the community,” she said.
Under the terms of the deal, Caves Valley will rent the market at 1065 S. Charles St., making an annual lease payment of $120,000, or $12,000 a month. The firm would start splitting profits with the markets corporation, after repayment of the initial investment as well as an 8 percent return, Mirmiran said.
The lease would run for 15 years, with the option for seven 5-year renewal periods, or up to 50 years. It is expected to go before the city’s Board of Estimates for approval this week.
The agreement with Caves Valley for Cross Street Market is likely to be the first of several private sector partnerships, as officials look to move Baltimore’s decades-old network of public markets into the 21 st century.
The public markets corporation is gearing up to lead a major renovation of Lexington Market. It also is considering options for Hollins Market in west Baltimore and Broadway Market in Fells Point, which could include private ownership, said Kirby Fowler, who chairs the public markets board.
“There’s been progress around the markets and to some extent the markets have not kept pace with that progress,” he said. “In those particular neighborhoods, it’s important for the public markets corporation to see if the private sector could do a better job.”
Renovations to Cross Street will include improvements to the building’s internal systems, and changes to bring more natural light into the 31,000-square-foot market space. Significant portions of the market will close during renovations, which are likely to last eight to 12 months, Mirmiran said.
The renovations must occur within two years, Parthemos said.
The plan has been scaled back since the proposal was first submitted, with a greater public contribution and a greenhouse and roofdeck removed. The city also is getting a smaller fee than the $275,000 minimum payment first proposed.
Fowler and others said the final agreement reflects substantial “give and take” as a plan to finance the renovation was developed.
“In the end, our goal as a public markets board was to create a better market for the neighborhood,” Fowler said. “If it meant that the city had to contribute more capital dollars then that’s what it took.”
Merchants in the space are scheduled to be told of the agreement on Monday, said Mirmiran, adding that rents will increase as part of the renovation. Many of the shop owners are on month-to-month leases; those will remain in place until construction starts, around April, and the city will work with merchants on relocations, Parthemos said.
Federal Hill has housed a public market since 1846.
The city opened the market up to private management in early 2015 after receiving inquiries from Caves Valley and Scott Plank’s War Horse, which formed a partnership and submitted the sole response considered by the city.
War Horse has since walked away from the plans, leaving Caves Valley, which is spearheading the nearby Stadium Square redevelopment, owns 1111 Light Street and has a stake in the Horseshoe Casino.
The firm is working with BCT Architects on the design and Mackenzie Commerical Real Estate Services on leasing.
“We’ve invested a bunch of money and time in South Baltimore and over the last decade one of the big desires of residents … as well as merchants in the market is to see the market revitalized,” Mirmiran said. “We thought it would be important for our project … to take it on.”