H&S development plans could hasten efforts for bustling Central Avenue corridor

John Paterakis Sr. didn't believe it when Mayor Kurt L. Schmoke told him nearly two decades ago that Harbor East's Marriott Waterfront Hotel would spur revitalization from the Inner Harbor to Canton.

The city had picked Paterakis' H&S Properties Development Corp. to build the hotel, launching a parallel career for the baker and developer. Today, Paterakis marvels at the upscale shops, luxurious living spaces and top-flight office space set to line the southeastern Baltimore waterfront — and already booming along it.

"You have to give a lot of credit that he was right," said Paterakis, president of H&S Bakery Inc., which grew from a two-man operation that opened in 1943 to a baking empire spanning more than two dozen states.

H&S Properties is poised to add another piece to the puzzle linking Harbor East's growth to Fells Point with plans for a department store, an expanded Whole Foods Market and apartments at two sites on Central Avenue. Along with Exelon Corp.'s planned local headquarters tower at Harbor Point and other projects sprouting to the north, the development would boost a long-standing priority of city planners to transform Central Avenue into a bustling boulevard.

Developers say the connection is an important one in a business where success is built upon a critical mass of residents, workers and free-spending visitors — though some worry about traffic and other effects of the higher-density development.

"I think you're going to see more developers interested in that whole corridor," said M.J. "Jay" Brodie, who led the Baltimore Development Corp. for 16 years until retiring in 2012. "There's going to be major development opportunity from Fells Point and Harbor Point moving north toward Hopkins."

H&S Bakery is freeing up space for the new development by moving a distribution center it operates on Central Avenue to Hollander 95, an East Baltimore business park. The city Planning Commission approved plans for the new facility last month, prompting speculation about how the old center's prime real estate might be used.

It sits on the edge of the Harbor East development H&S spearheaded, in a stretch of warehouses and industrial-oriented businesses that have separated the towering hotels and condominiums of Harbor East from the cobblestones, rowhouses and shops of Fells Point.

That site will see retail, potentially a department store, topped by apartments, Paterakis said Friday.

The developer also plans to build on a parking lot across Aliceanna Street from the distribution center, breaking ground this summer on a Whole Foods that Paterakis said would be three times the size of the grocer's original location a block away on Fleet Street. A Whole Foods spokeswoman would not confirm the move Friday.

The H&S Bakery plant on nearby Bond Street will remain for the foreseeable future but is yet another industrial property that could be redeveloped in coming years to complete the connection to Fells Point.

Developers of neighboring projects welcomed the plans, saying "more is better."

"You need a certain critical mass to make restaurants, stores and everything work," said Larry Silverstein, whose Union Box Co. developed the Canal Street Malt House condos and the former Holland Tack Factory building farther up Central Avenue. "You can't do that with just townhomes and short buildings."

When developers such as Union Box and Chesapeake Real Estate Group first began exploring the neighborhood, it contained little more than the original Whole Foods store and the headquarters of Sylvan Learning Systems, now occupied by Sylvan spin-off Laureate Education. But the addition of projects such as Chesapeake's mix of restaurants, retail and offices at the Bagby Building on Fleet Street helped bring more people into the neighborhood.

Other coming additions include Union Box's redevelopment of the Fallsway Spring building at Eastern and Central avenues, to become headquarters of local technology company Groove Commerce, and a block south of that, a Hyatt Place hotel to include a retail component.

The key for urban development is having "a great mix in a dense area," said Doug Schmidt, a Chesapeake partner.

"My plans were to add more to take advantage of the great amenities they were putting in," Schmidt said of H&S. "There's no doubt we wouldn't be here if it wasn't for what they had and what they put in."

For the owners of the businesses filling those developments, the prospect of more development is welcome, despite the traffic headaches it could bring.

"It's becoming a very beautiful area and people want to walk around here," said Karen Patten, owner of Kali's Restaurant Group, which includes four Fells Point restaurants. "It's what the city needs — more taxpaying bodies."

But developers and city officials acknowledged concerns about bringing Harbor East's high-density levels toward Fells Point.