Baltimore businessman David E. Swirnow is already clearing out the basement of his Caves Valley home, readying for a move into a fancy new condo tower in the HarborView development pioneered by his father in Federal Hill.
HarborView Properties Development Co presented plans for the roughly 248-foot tall Pinnacle for city approval in 2005 but halted the project as sales slowed during the recession.
Now the building has been revived, with a twist: Future residents, led by Swirnow, are buying the site from HarborView, with plans to finance the $55 million custom project themselves.
About half of the 30 planned luxury units, including two penthouse levels and a sky suite, are reserved already, Swirnow said. He said the development group, Pinnacle Development Investors LLC, hopes to file for a building permit by the end of February, with a construction timeline that would allow the first residents to move in by early 2017.
“It’s very exciting,” said Swirnow, who has reserved two units on the 15th floor and is the president of Swirnow Building Systems. “I’ve already started to empty out the basement and purge my home.”
The 18-story Pinnacle would be the next step in the transformation of a former Bethlehem Steel shipyard, 42 acres on Key Highway that Swirnow’s father, Richard, and a partner bought at auction for $24.4 million in 1986.
Since then, the corridor has been built up into hundreds of townhouses, boat slips and the signature 249-unit HarborView Towers complex, which rises more than 25 stories and opened in 1993.
Several buildable sites remain on the property. HarborView is looking for a partner to develop more than 200 apartments at the corner of Pierside Drive and Key Highway. Another, across Key Highway, was proposed for about 300 apartments last year, but that property has not sold yet, Swirnow said. Two lots farther south along the water are also available.
The sale of the Pinnacle parcel at 1 Harborview Drive, is expected to close after the building permit is submitted, said Frank Wise, chief operating officer for HarborView Properties Development Co.
“When Richard started this project back in the mid-’80s, it was an old Bethlehem Steel shipyard, so it’s been a long time coming,” Wise said. “I think
Baltimore has reached the point where development and people moving back into the city has really snowballed.”
The condominium market remains slow in Baltimore. Just 145 new condominiums sold in 2014, according to a year-end analysis by the research arm of Transwestern, Delta Associates. The resale market was stronger, with 3,081 sales.
The existing unsold units have languished for lack of interest, but the resale market suggests some demand for the right product, said William Rich, who heads the firm’s multi-family practice. But Transwestern does not anticipate many — if any — new condo projects getting announced in the next year.
“This arrangement of owners coming together to build a condo is a unique way of going about developing,” Rich said. “Who knows? If this turns out to be successful, it might be a way forward for the development of condos in Baltimore.”
132,000-square-foot project is expected to cost about $55 million, including $12 million for the ground, foundations and other aspects of the site, $25 million for the tower construction and about $18 million to build out the units, depending on what finishes owners want, Swirnow said.
Swirnow said the Pinnacle can move forward in part because the role of market forces is reduced, as future residents finance construction and eliminate the expectation of a traditional developer’s profit margin. He said he hopes to have backers for all of the units before breaking ground.
“What is so unique about the Pinnacle is this is not a for-profit development in the traditional sense,” he said, tracing the idea to dinner conversations with friends.
“Someone said, ‘Why don’t we buy a piece of property and build some condo units for ourselves?’ … I listened,” he said, adding that with two grown children out of the house, he was ready to downsize from his self-designed home in Caves Valley. “It’s what I’d be doing for myself anyway.”
The building, set opposite the Harborview Towers complex on top of an already existing underground parking garage, is designed to appeal to a wealthy empty-nesters, with about $1.3 million at hand to pay for the development. Spots, which have views looking south and north, can be reserved on a first-come, first-served basis, Swirnow said.
Miami-based Robert M. Swedroe is the Pinnacle’s longtime architect and the interior designer for the common spaces is Baltimore-based Jenkins Baer. The exterior would be consistent with the already-approved plans, but residents have control over the interiors. Elevators can take residents directly to each 3,800-square-foot unit, which comes with access to common spaces such as the rooftop terrace with a hot tub, bar and cook-out area.
The relatively large size of the units and freedom to design to suit personal tastes, at a reasonable cost, made the project compelling, said Bruce Sholk, 57, who met Swirnow through mutual friends more than 10 years ago and reserved the 17th-floor sky suite for himself and his wife last spring. He and his wife wanted to move from their five-bedroom Green Spring Valley home into a lower-maintenance residence when their youngest child graduates from high school this year, he said.
“It was kind of wishful thinking that you could have high-end finishes, a great building … a big unit but also at a price point that was at or below existing buildings in town,” said Sholk of the private equity firm Axcel Partners. “We’re excited and hopeful that the project is going to happen.”