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.
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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.
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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.
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(END) Dow Jones Newswires
September 14, 2017 13:54 ET (17:54 GMT)