Robbie Whelan

Daily Record Business Writer

September 3, 2008 6:55PM

City officials took steps Wednesday to seize by condemnation 80 properties in South Baltimore's Old Fairfield industrial area for redevelopment after negotiations to buy them fell apart.

The properties, most of them 15-by-20-foot lots located on nine acres bounded by Carbon Avenue on the north, Sun Street on the west, Weedon Avenue on the east and Chesapeake Avenue on the south, are owned by Kevin McNeil, whose trucking company, Fleet Transit Inc., uses some of the land to store and load transit vehicles.

Old Fairfield once had a residential community, but for the last several decades it has been the site of several automobile shipping terminals and other port-related heavy industry.  The city has been trying to redevelop the area since 2004.

In late 2006, a request for proposals was issued by the Baltimore Development Corp., and the Old Fairfield plot was divided into five parcels of roughly 5 acres each and allocated to several developers, including McNeil, for redevelopment.

But in the lat year, according to BDC officials, McNeil rejected a purchase offer from the city, derailing plans for the area.  In response, the city moved to seize the properties and pay McNeil $2.2 million.

"Overall, he was unhappy with the offer we had given him, and wanted much more," said Larisa Salamacha, the BDC's managing director of industrial development.  "He has not done anything with the area to date.  He had presented some ideas about creating another truck terminal, but ... for the last eight years, nothing as been done with them.

McNeil declined to answer questions in a phone conversation, but in an e-mailed statement to The Daily Record, he expressed disappointment at the decision, noting that he has headquartered his trucking business in Fairfield, across Chesapeake Avenue from the site, for more than 30 years, and that he "reintroduced this property to modern industry and port related activity creating employment and supporting the city's tax rolls."

"It really looks like the City doesn't value the existing Baltimore businesses," he wrote.  "I will resist the condemnation and have hired an attorney for this purpose."

McNeil's attorney, noted condemnation lawyer John C. Murphy, did not return a phone call seeking comment.

"People always have the options to change their minds about what they want to do with their property," Salamacha said.  "Our goal from the beginning has been to recapture the underutilized properties, clean up the properties and attract new businesses."

According to the BDC, the city owns about 60 percent of the lots in Old Fairfield, most of them acquired in the last three years, and most of them vacant and unproductive.

Most of the industrial properties in the area owner-occupied and functionally obsolete, according to Matthew Laraway, senior director for industrial properties at the brokerage Cushman & Wakefield.

"If people aren't going to move into these buildings and rent them, I'd say there are lost jobs and lost revenue," he said.

Jim Lighthizer, a principal with Chesapeake Real Estate Group, said his company had been awarded eight acres of the Old Fairfield site, and that he plans to "convert [it] from a dumpy area to a nice business park setting."

Three years ago, Chesapeake purchased 22 acres adjacent to the BDC offering, subdivided, cleaned some chemical contamination, and built a 25,000-square-foot truck repair facility for Waste Management Inc., a large national trash disposal company.  Soon after, the company rented a small office building on the property to XTRA lease, a truck and trailer rental company owned by Warren Buffet’s Berkshire Hathaway.

"One of the things I've found in the last five years is, there's no more available, industrially zoned land," Lighthizer said.  "One of the few places that had development opportunities is Baltimore City ...  If we take this industrial land and make it  usable, there will be demand for it.  We're trying to capitalize on that demand by converting properties that aren't in use and preparing them for a higher and better use.

"I used to show this property five or six years ago, before the market ran out of land, and they didn't like it because it was too heavy-industry oriented," he added.  "It's still Fairfield.  If you look at aerial pictures of it, you'll see that its right next to the port, there are a lot of cranes.  There are a lot of heavy industrial factors that are not going to change."