Caves Valley Partners and the city have an agreement for the developer to manage and overhaul Cross Street Market in Federal Hill.
Under the agreement the market will be transformed in the next two years with $4.5 million in capital from the developer, operating as CSM Ventures LLC, and $2 million from the Baltimore Public Markets Corp. and the city.
Kirby Fowler, chairman of the Baltimore Public Markets Corp., said this agreement could become a model for how some of the city’s other five public markets are transformed. He said officials will consider various options to make sure the Avenue, Broadway, Hollins, Northeast and Lexington markets are best serving those communities.
“In other cases it may be time for the private sector to step in and move our markets into the 21st century,” Fowler said.
Robert Thomas, the Baltimore Public Markets Corp. executive director, said the biggest concern for these markets is that they’re meeting demand from surrounding communities.
“We really do need to get the markets to the point they respond better,” Thomas said.
According to an announcement from the city, the term of the agreement with Caves Valley Partners is initially for 15 years with seven renewal options every 5 years after that. The developer is entitled to revenue but also must pay the market corporation a $10,000-a-month priority payment, a payment to the subsidiary’s lender and share profits 50-50 with the market corporation.
The new agreement is on the Board of Estimates’ agenda for Wednesday. If it’s approved the developer would take control of the market at the start of the year and construction would not begin until the second quarter of 2016.
Arsh Mirmiran, a partner at Caves Valley Partners, said the biggest obstacle to reaching an agreement was making sure the economics worked for both parties.
That was complicated by several issues, including financing for a project the developer wouldn’t own. But the biggest complication may have been addressing who was responsible for deferred maintenance on a 64-year-old building .
“In its current shape I think (Cross Street Market) was kind of a sinking ship,” Mirmiran said.
Caves Valley Partners — initially with War Horse LLC — has been working for more than a year on the project. Its design concept was chosen in March 2015.
Initial plans for the proposed overhaul of the market have not been significantly altered, Mirmiran said, although a proposed roof deck will not happen in the first phase of the renovation and a concept for a greenhouse on site have been nixed.
“The idea is to bring in a lot more natural light into the market,” Mirmiran said.
Caves Valley has made massive investments in south Baltimore in recent years. The firm is the master developer for the $250 million mixed-use Stadium Square project in the Sharp-Leadenhall neighborhood.
During meetings between the developer and community groups in south Baltimore, Mirmiran said, residents have made it clear that a top goal is to see Cross Street Market renovated.