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Why did the Cross Street Market deal go bad?

Key documents as Baltimore grapples with how to finally fix this Federal Hill fixture

Above: Area residents have been calling for Cross Street Market renovations for years. (Fern Shen)

With the collapse of a deal that would have had a private developer renovating and managing Cross Street Market, residents will be pressing the new mayoral administration to take up the task.

Figuring out what led Caves Valley Partners (CVP) to walk away yesterday will be part of that discussion.

Was the liquor license being crafted for the upgraded Federal Hill landmark too stringent? Or were the bill’s restrictions actually fairly modest and other issues were at play?

Multiple narratives were under discussion yesterday after CVP partner Arsh Mirmiran announced the company’s decision.

Some pointed to the buzz-saw of bad publicity when Mirmiran gave longtime vendors an order to vacate, refusing to pay moving and relocation expenses during a 10-month shutdown.

Mirmiran, meanwhile, complained publicly that profit margins would be minimal under the management agreement he forged with the city (with the help of his lawyer, Gallagher, Evelius & Jones’ Mark P. Keener).

Others said that Mirmiran was miffed that Mayor Catherine Pugh failed to back his stance toward the merchants and did not defend the highly-favorable management agreement that was approved last November in the waning days of the Rawlings-Blake administration.

As the discussion moves forward on how best to manage Baltimore’s public markets, here are the texts of two documents that may be helpful:

Liquor License Bill

Drafted by the 46th District legislators after multiple meetings with scores of community stakeholders, the measure was released in draft form last weekend. A few key provisions:

• It created a new “Public Market License” license covering the whole market, allowing the Caves Valley subsidiary, CSM Ventures, to make arrangements for sub-vendors to sell beer and wine for on- and off-premises consumption.

• 65% of the floor space would be for the sale of items that are not alcoholic beverages. Monthly total receipts would have to be 65% for non-alcoholic beverage items.

• Pub Crawls – No market participation permitted.

• Liquor Sale Hours – Monday-Friday noon to 11 p.m.; Saturday and Sunday 9 a.m. to 11 p.m.

• Annual License Fee – $50,000, which would drop to $10,000 if the holder of the new license obtains and extinguishes two existing licenses in the area.

Add-ons: Port Covington and Anthem House

Included in the draft were provisions that had nothing to do with Cross Street Market. They allowed liquor licenses to be created at Port Covington and at the Anthem House development in Locust Point.

Approached by the developers of those projects, the lawmakers agreed to add the provisions because “it’s the one bill we have adding liquor changes,” said Del. Luke Clippinger, who led the drafting effort.

He said the provisions for Port Covington came at the request of Sagamore Development, Kevin Plank’s development arm that is undertaking a massive mixed-use development on the Middle Branch.

The request for Anthem House, at 900 Fort Avenue, and Anthem House II, at 1430 Lawrence Street, was brought by lobbyist Sean Malone, Clippinger said. Those projects are being developed by the Bozzuto Development Group and Scott Plank’s War Horse LLC, among others.

The Port Covington provision would have permitted a license for a restaurant with a minimum capital investment of $700,000. For Anthem House, the bill allowed the Baltimore Liquor Board to “issue not more than a combined total of five liquor licenses.”

Clippinger said the Locust Point Association has been negotiating an MOU agreement regarding liquor licenses with the Anthem house developers.

Management Agreement

On November 9, the Board of Estimates, controlled by then-Mayor Stephanie Rawlings-Blake, approved a lease for Caves Valley to renovate and manage Cross Street Market, including a 34-page management agreement.

It was signed by Arsh Mirmiran and J. Kirby Fowler Jr., chairman of the quasi-public Baltimore Public Markets Corporation.

Although it was signed by the principals more than a week ahead of time, the document was not made public prior to its November 9 approval by the Board of Estimates. It was subsequently disclosed in the Baltimore Business Journal and then made public on Caves Valley’s website.

Some provisions in the agreement:

• It allowed CSM Ventures LLC, the entity controlled by Caves Valley, to renovate the 29,500-square-foot building.

• The city agreed to contribute $2 million towards the $6.5 million project.

• Caves Valley would pay the city $10,000 per month to manage the market. The company had the option to renew the lease, at the same monthly rent, for a period of 50 years.

• Under the provisions of a 50-50 profit-sharing agreement, city taxpayers wouldn’t see any profits from the redeveloped market for years – not until Caves Valley fully recouped its $4.5 million investment.

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