BALTIMORE – For Dimitris Spiliadis, Fells Point is the center of his life – the neighborhood where he lives, works and where he built his popular and successful restaurant, the Black Olive, into one of Baltimore’s finest.
Named among the “Best of Baltimore” and one of the smartest Greek restaurants in the country by Fodor’s travel guide, the Black Olive boasts clientele that, Spiliadis says, “would really just blow your mind – from actors and all sorts of important people and medical community at Hopkins that really know how to dine.” But ten years ago the restaurant was only an idea spun from the family’s catering company. And to get started, the family turned to Maryland’s Neighborhood Business Development program, now known as Neighborhood BusinessWorks (NBW) to help them buy a “dilapidated” building and make the idea a reality.
Since its start up days, the restaurant has continually expanded and over the past five years, has received $680,000 for expansion from the same state program – a program designed to help small businesses reinvest in “under-served” neighborhoods, or places its creator, former Gov. Parris N. Glendening termed “priority revitalization efforts.”
In fact, according to a Capital News Service analysis of loans since 1999, over 50 percent of the loan money in Baltimore City has been doled out to businesses in the now-trendy, upscale areas of Canton, Fells Point, Federal Hill and the Inner Harbor. Baltimore City took in 53 percent of the more than $23 million awarded in the state.
These areas fall within the “designated areas” assigned by individual jurisdictions and approved by the secretary of Maryland’s Department of Housing and Community Development. There is at least one in each county, but Baltimore City makes up a major chunk of the program’s focus.
The designation means any business that has less than 500 people and can put up or privately fund half of its endeavor is eligible for up to $500,000 in state funds in the form of a loan for the purpose of revitalizing the neighborhood.
“It’s about community development – working with small businesses in places where a lot of small businesses aren’t going right now,” said Joseph Brown, director of the NBW program, which was created in 1995 as a key part of Glendening’s Smart Growth initiatives.
Deborah Mazzoleni remembers that “there was nothing else there” when she and her husband opened their fashionable restaurant, Bicycle, in a part of South Baltimore close enough to Federal Hill that many, mistakenly, consider it part of that gentrified Baltimore neighborhood.
“The whole idea was that in areas like Baltimore, we really wanted to help start a major revitalization,” said Glendening, who now heads the Smart Growth Institute where he instructs others how to control sprawl by investing in existing neighborhoods. “It’s worked dramatically, as you know, in places like Canton and Little Italy. … It’s become one of the highest revitalization areas in the state,” he said. “It takes Baltimore City off the needs list and makes it much more self-sustaining.”
Still the city remains on the list and money is going there. Some say it’s just another example of resources flowing to the same areas.
“The general feeling in Baltimore is that the resources go to specified areas,” said Catherine Evans of the Belvedere Improvement Association. “Resources tend to cluster and they tend to cluster not in the outlying neighborhood areas.”
Today, four years after receiving an NBW loan, David Schwartz owns the Inn at 2920, a completely renovated bed and breakfast just off of Canton Square, with modern paintings, a beautiful view and six rooms with names such as The Bordello and The Garden.
“We wouldn’t have made it” without NBW, Schwartz said. But Schwartz was told future Canton entrepreneurs might have to look to other options because “our area was becoming too prosperous. We were supposed to be the last people.”
But they weren’t. Though the state’s small business revitalization loans in Canton stopped for a few years, money again flowed there in 2004 with a $100,000 loan and a $115,000 loan in 2005.
Brown said he was unaware of any area being “undesignated,” but that the state will deny loans for various reasons, including location in an “oversaturated” town or jurisdiction. “There are those cases where it does not just meet our commitment of neighborhood revitalization.”
Still, he said, “It’s difficult – if that’s the growth part of the city – for us to say we’re not going to lend in this particular community, especially if it’s still designated” as Canton is.
“I think that we have significantly more (loan) requests for Baltimore City seeing as that’s where a lot of the small businesses are,” he said. And the same is true for the now-trendy and still-growing areas.
Glendening, who supports any type of reinvestment, said, “Technically, according to the law, (an eligible area) would be any existing neighborhood. But it was meant to do those priority revitalization efforts. … If we had a significant amount of money, I think it would be beneficial to fund all of these projects.”
Yet, many business leaders and owners said, it may be that areas most in need are not being denied loans but, rather, are unaware of the option.
“‘Don’t have the information,’ is what I think is more appropriate,” said Paul Taylor, executive director of Baltimore’s Small Business Resource Center. But “they’re beginning to look for types of funding.”
Even those in the more typically funded areas often found out only by word of mouth.
“I did a whole two months worth of research…a lot of these are only listed on some obscure pages of 600 pages of some website,” said Justin Shelby, owner of Federal Hill Fitness, who said, “I tell every single person I come across.”
“I guess it’s ironic that the biggest developers in the areas are the ones who know about the incentives instead of the little guys,” he said. Those in less developed neighborhoods are “probably the least aware of these programs. … I think it’s a matter of grabbing the low-hanging fruit and getting the word out.”
Shelby bought a building in Federal Hill after he saw its potential for a health club and decided he no longer wanted to drive to a strip mall for exercise. And while he said he would have figured out how to achieve his goal one way or another, “it would have been a hell of a lot harder road” without NBW.
NBW’s Brown admitted there wasn’t a lot of advertising out there, but said the program hosts an annual breakfast and has a few ads in periodicals. He agreed it was “very much so” a word-of-mouth organization.
Glendening said the administration of his successor, Gov. Robert L. Ehrlich, Jr. is giving the program what he calls “benign support” – they aren’t pushing for it, but they aren’t cutting it either.
“If you really want to show your support, show it in the budget,” he said.
Brown said there were no plans to request more funds, but that the program would try to maintain its current $6 million budget – down from about $9 million in the late 90s. His long-term goal is to expand the program throughout the state and “increase our participation in a lot of the small businesses that are out there.”
Even today and even in the areas of Baltimore that do receive over half of the state’s support, many businesses are high in risk and low in security.
“It would be tough to finance this,” said Shelby, referring to his high-end fitness facility in Federal Hill. The bank had “every possible layer of protection in front of them that you could imagine – at my expense and the state’s expense.”
Mazzoleni said Bicycle had the same problem. “I believe it is still difficult for me (to get financing) for one reason: it’s a restaurant,” she said. “Restaurants are notoriously bad investments.”
Brown said most of the businesses they support are “inherently” high-risk. “We take that risk. The banks don’t take that risk.”
But Mazzoleni said even the government makes business owners prove their worth, which she said may make it harder for people in certain areas or income brackets to obtain a loan.
“You need to have a proven track record,” she said. “You have to be a savvy business person to get a loan from them.”
While Brown said the program’s default rate is about average, it is when businesses like Federal Hill Fitness, Inn at 2920, Bicycle and The Black Olive survive and thrive that Brown feels the program has succeeded.
“It’s actually probably harder now for small businesses to own their own building (than previously in Fells Point), which is essential to maintaining a long-term business,” Spiliadis said. “It made us feel comfortable to pour anything we make right back into the building and the community and the business.” “Now not only am I going to stay here, but we’re going to continue to grow.”