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Tuesday, December 02, 2003 - Page updated at 12:00 A.M.

Baltimore wants to revive ghetto with biotech

By Michael Barbaro
The Washington Post

Tony Davis, left, and another man play chess in front of an abandoned building in the neighborhood known as Middle East, in east Baltimore.
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BALTIMORE — In the hollowed-out neighborhood known as Middle East, three blocks from the Johns Hopkins University Medical School, La-Z-Boy chairs compete with broken-down Ford pickups for space in vacant lots. Row houses sit empty, their windows cemented. And whether it's 11 a.m. or 11 p.m., a clerk at High-Hat Cut-Rate Liquors sells cigarettes from behind a 5-foot-high wall of bulletproof plastic.

Here, on streets where cardboard signs announce that "drug trafficking or loitering is not permitted in this block anytime," Baltimore is trying to attract a different kind of drug business: biotechnology. Invoking eminent domain, the city will soon evict 250 families and over the next year demolish 300 houses to make way for a 2 million-square-foot office park, wiping out an entire neighborhood in a project reminiscent of 1960s-era slum clearance.

It is a drastic proposal. But when it comes to Middle East, city officials say they have run out of easy options. The only way to save the careworn stretch of 17 blocks, they contend, is to tear it down. Then, they say, the international prestige of Johns Hopkins research laboratories and the immutable laws of the free market will kick in and do for the neighborhood what four decades of urban-revitalization efforts never could: turn it around.

City leaders say the $1 billion biotechnology park will transform the east side of Baltimore into a shiny new corporate Mecca for drug developers, medical-device makers and gene decoders. In 10 years, they say, the park should create 8,000 jobs and 2,000 new and renovated homes. Then scientists will move into new housing, spend their paychecks in the neighborhood and throng to new restaurants, banks and retail shops.

Stakes are high

Many U.S. cities have tried to remake their most troubled neighborhoods with huge reconstruction projects. And dozens of communities around the country have plunged into expensive efforts to court the 25-year-old business of biotechnology, with its promise of cutting-edge science, blockbuster products and economic growth. But Baltimore may be the first to try to do both at the same time.

"The stakes are high for everyone," said Mayor Martin O'Malley, a Democrat. "For the residents, for me politically, for Johns Hopkins. But there really isn't an alternative that makes sense."

Under the plan, homeowners will be given as much as $70,000 in moving costs plus the value of their home, advisers to guide them throughout the move, credit counseling and even rides to inspect potential new homes. Renters will receive the same services and up to five years of rental assistance.

East Baltimore Development, the nonprofit group set up to build the center, says housing built around the biotechnology park will include affordable townhouses and detached homes, meaning that some residents can move back. One-third of the jobs, it says, will be available to those with only a high-school diploma.

Jobs in doubt

So far, there is little organized opposition to the proposal in the predominantly black neighborhood. But there is widespread doubt that the biotechnology center's benefits will ever trickle down to those whose lives will be uprooted to make it possible.

Isaac and Rochelle Jones bought their home on North Wolfe Street 20 years ago when working-class blacks bragged about living in Middle East. In the 12-foot-wide house, they laid white tile in the kitchen and installed central air conditioning, new windows and a baby-blue front door. Today, they have seven years left on a 15-year mortgage.

"I was content to stay in a house that was paid off," said Rochelle Jones, 41, a former state employee disabled by lupus.

She is also concerned about her sons. Antwan, 25, works at Wal-Mart; Maurice, 19, works part time at a Johns Hopkins hospital. Both would like better jobs, but neither attended college.

"If you don't have a college education, you might as well be sweeping the floors," said Isaac Jones, 60, a former factory worker. "You tell me what kind of jobs they can get in biotech."

Best hope

There is little question that Middle East needs help. The blocks of red and white, brick row houses slated for demolition have been plagued by some of the worst violence, unemployment and poverty in the nation. One in four of the houses is vacant. For two decades, the city tried just about everything to clean it up: house-by-house renovations, generous tax credits, stepped-up police patrols.

Nothing worked.

John Shannon Jr., president of East Baltimore Development, said biotechnology is the neighborhood's best hope. The development will be less than two blocks from Johns Hopkins University, a hotbed for the kind of medical research that becomes the basis for biotechnology companies.

In 2001, the university attracted $1.2 billion in research money, the second-biggest sum in the country behind the University of California system, according to the Association of University Technology Managers. Nearby researchers at the University of Maryland, Baltimore, last year attracted $324 million. If there is space in East Baltimore to commercialize the fruits of all that research, the logic goes, biotechnology companies will sprout up. Those, in turn, will support dozens of new businesses.

"The ability to have world-class expertise across the street is very attractive to companies," said Craig Smith, chief executive of Guilford Pharmaceuticals, a Baltimore biotechnology firm.

The city will offer businesses incentives: 10-year credits against property taxes for new construction; one- to three-year tax credits for wages paid to new employees; low-interest loans; and work-force-development grants.

Still, with just a few months left to go before the city sends hundreds of eviction notices, not a single company has committed to building on the site.

Tall order

Shannon concedes that persuading biotechnology executives to put offices in Baltimore's toughest area is a tall order.

Even with Johns Hopkins next door, experts say, East Baltimore will face an uphill battle because of the simple economics of the industry.

The cost of commercializing a biotechnology product is exceedingly high, while the odds of its success are exceedingly low. On average, it takes at least $500 million and 10 years for a biotechnology drug to be approved by the Food and Drug Administration, the goal of every company. Most companies run out of money trying.

"This is a mania," said Joseph Cortright, an economist who has written extensively on the development of biotech centers. "Ten years ago, everyone wanted to be the next Silicon Valley. Three years ago, they wanted to be the center of e-commerce. Now that both of those have fizzled, everyone in the economic-development fraternity thinks they need to be in biotechnology."

Copyright © 2003 The Seattle Times Company

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