Long before Gallagher, Evelius & Jones opened its doors in 1961, Baltimore’s Lexington Market was a thriving marketplace where farmers hauled ham, butter, turkeys, eggs, and vegetables to sell or exchange. The market has evolved considerably over the years, and now, at 238 years of age, the nation’s oldest continuously operating market is undergoing an estimated $40 million renovation. The market, located on the west side of downtown Baltimore and operated by the Baltimore City nonprofit entity Lexington Market Inc., is being transformed under the leadership of Baltimore-based developer Seawall. Seawall is known for developing innovative real estate projects such as Union Mill in North Baltimore, Union Collective in Hampden, and R. House in Remington. The Lexington Market project will feature a 61,000-square-foot, two-story building, an accessible pedestrian plaza that allows service to customers both inside and outside, and a stand-alone kiosk closer to Paca Street. An estimated 45-60 vendors will occupy the urban space, which is anticipated to open in 2021.
Gallagher’s experience in completing complex real estate transactions was instrumental in helping Lexington Market Inc. move forward with a project of this scope.
Financial funding for the Lexington Market revitalization was funneled from five different sources, including:
•$11.3M loan from Fulton Bank
• $9.5M in New Market Tax Credit equity investments from Cinnaire, Enterprise
Community Investment, Harbor Bank, and U.S. Bank CDC
• $9.4M in grants from the State of Maryland’s Department of General Services and the Department of Housing and Community Development’s Neighborhood BusinessWorks program
• $7.3M in grants from the City of Baltimore
• $2M from Lexington Market, Inc.
Gallagher lawyers worked with Seawall to create and implement a financial structure that was agreeable for all five funding sources. Also, Dave Raderman, a Gallagher tax lawyer, represented Lexington Market Inc. regarding the New Markets Tax Credit and all of its requirements for Lexington Market Inc.
“It’s really like putting together an extremely complicated puzzle to satisfy all the lenders’ requests and demands in a way that works for all the other lenders,” said Kirsten Woelper, the lead Gallagher real estate lawyer on the project. “What one granter or lender wants can contradict what another wants, so working through that weave of intercreditor issues can be a challenge.”
In addition to the funding structure, there was also a complex set of real estate relationships underlying the Lexington Market project.
The property on which Lexington Market is located is ground leased from the Mayor and City Council of Baltimore to Lexington Market Inc., and it’s comprised of several different tax parcels. Gallagher lawyers and staff navigated through titles, surveys, and land-use issues to determine the best path forward.
The Passion Behind the Project
Lexington Market is within sight distance of Gallagher’s downtown office space, so there was a special excitement around this revitalization effort. During a Feb. 18 groundbreaking at Lexington Market with key project stakeholders, government officials, and community members, Nancy Faidley Devine of the long-time, multi-generation seafood vendor Faidley’s detailed the history of the market and what it has meant to her family.
For real estate lawyer Kirsten Andrews Woelper, who grew up hearing stories of her grandmother shopping at the market, having the opportunity to play a role in preserving that history and ensuring the market continues to play an integral role in the city moving forward has been very fulfilling.
“I’m excited about this project because it’s a really good example of how a real estate project can become an anchor in the community – a catalyst for growth and development extending from that center point.”
Associated Attorneys: Kirsten Andrews Woelper, David Raderman
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David E. RadermanOf Counsel
Dave Raderman concentrates his practice in the areas of tax and business transactions, particularly tax sensitive real estate investments.