Who and what to watch in 2001

Places and prospects


How the housing sector will perform is critical to the area's economy. New homes drive demand for building materials such as lumber, siding, brick and Sheetrock, and fuel construction and supplier jobs. Consumers buying both new and existing homes need household goods, appliances and paint. Although sales of new homes have fallen off, more because of a shortage of land than of demand, existing-home sales continue to rise.

The last four months of 2000 saw increasing sales of existing homes, and pending contracts--an indication of future activity--were also on the rise, meaning the first quarter should get off to a fast start.

And with fixed-rate mortgages hovering around 7 percent--the lowest in almost two years--the expectation is that first-time homebuyers will still be able to jump into the market. But with supplies tight, expect home prices to rise.

According to the National Association of Realtors, the Baltimore metropolitan area had the strongest price increase nationwide in the third quarter of 2000--the median price of $160,800 was 24.8 percent above the third quarter of 1999.

Legg Mason, T. Rowe Price

Each year, shares of Legg Mason and T. Rowe Price surge on rumors that they are in the cross hairs of an acquirer. While the executives have acknowledged that they would have to consider any serious offer, both have memorized a simple mantra: "Why sell?"

Legg Mason, which employs about 4,800 companywide, is rolling with revenue and profit at a record pace. Ditto for Price, which has about 4,000 employees.

Both are expanding overseas. Both have tried to insulate themselves from swings in the market. But with the market sinking lower, can they keep churning out profits and keep their stockholders happy? If they succeed, there will be little reason to sell Baltimore's crown jewels.

Arundel Mills

Out-of-state tourists are expected to flock to the theme park-style megamall--which borrowed in its design from Las Vegas and Disney--and make it the state's top attraction.

The mall, near BWI, anticipates 18 million people a year diving into their wallets to spend at the mix of factory outlets, discounters, specialty shops and anchors that entertain--including a 24-screen, Egyptian-themed movie palace. As Baltimore-area shoppers flock to this new shopping temple, older malls such as those in Columbia, Glen Burnie and Annapolis are sure to feel more than a pinch.


Biotech companies will have to do more than talk fancy about how they're using the human genome. Experts believe the sector is growing up, and investor expectations are growing with it.

To really impress the Street, biotechs will have to prove they have something profitable to sell--or at the very least show promise of having a money-maker soon.


Tech stocks took a beating in 1999, including local stars like upstart Corvis Corp., whose stock price soared as high as $114 but then dropped to $17, and Ciena Corp., whose stock is less than half its 2000 high. Companies without earnings or revenue growth can expect to stay in a funk.

Some blossoming tech companies, meanwhile, are migrating to Maryland.

One rising British telecommunications company, Bookham Technologies PLC, is opening its North American headquarters in Columbia early this year, adding to Maryland's emerging high-tech cluster.

US Airways-United merger

Expect shorter lines and fewer fare sales at Baltimore-Washington International Airport this year if federal regulators approve the marriage of United Airlines and US Airways. United has said it will curtail US Airways flights out of BWI after the merger, increasing Southwest Airlines' dominance in the market and possibly leading to higher fares. State antitrust officials will go to court to stop the deal unless it is restructured to preserve BWI competition.

Integrated Health Services

The Sparks-based operator of more than 350 nursing homes across the country is trying to complete a bankruptcy reorganization, a process likely to take at least until midyear.

And last month, the Justice Department joined a whistle-blower case charging the company with Medicare fraud, an issue that complicates the reorganization. Genesis Health Ventures, a Pennsylvania-based company with 50 nursing homes and 8,000 beds in Maryland, is also reorganizing under bankruptcy protection.

Both are hoping that higher Medicare rates, approved by Congress last month, will help them in the future.


Dig deeper, transportation officials say, or the port of Baltimore will hit bottom. After years of study, Army Corps of Engineers officials will decide in 2001 whether federal funds should be spent to deepen the Chesapeake and Delaware Canal.

It remains to be seen whether environmentalist and dredging foe Rep. Wayne T. Gilchrest can deep-six the $40 million project.

The Joint Strike Fighter

The Pentagon wants one airplane to do the impossible: satisfy the Navy, the Air Force and the Marines. It's called the Joint Strike Fighter, and it could become the most expensive military contract ever.

Sometime this fall either Lockheed Martin Corp. or Boeing Co. will win the privilege of building the $200 billion fleet, and the losing company might well be forced from the fighter business forever. Yet some analysts think the Joint Strike Fighter itself could lose this year--slashed from the budget because of the slowing economy and because its awkward design satisfies no one rather than everyone.

Prime Retail It's a rebuilding year for the world's largest owner of outlet malls, including centers in Hagerstown, Perryville, and Queenstown.

The debt-laden company is back from the brink of bankruptcy, thanks to an 11th-hour deal to sell four shopping centers and borrow up to $71 million.

This year, Prime hopes to focus on marketing and capital improvements at its centers, but more sales of shopping centers are not out of the question.

Sparrows Point

Bethlehem Steel Corp. ponied up more than $300 million for a new state-of-the art cold-rolling sheet mill at its Sparrows Point plant and the union said yes to 400 job cuts to get it.

The new facility is supposed to save the country's third-largest steelmaker $130 million a year, and it needs every penny: Cheap imports, depressed prices and high payouts to retirees have added up to big losses. Company officials hope the new mill will help to end the flow of red ink.

Owings Mills Town Center

The $200 million Owings Mills Town Center breaks ground this year. Baltimore County and the Mass Transit Administration want the precedent-setting project to do more than pay lip service to Smart Growth.

The pedestrian-friendly combination of housing, shops and other amenities, to be built over 10 years on the Metro station parking lot near Owings Mills Mall, should give the suburb a focal point and Baltimore's subway a substantial boost in riders.

West side downtown redevelopment

At least five major construction projects that include new housing, shops and offices are planned on the city's west side. City officials and downtown business leaders say these and a state-funded renovation of the Hippodrome Theater will lead to a strong second act in this once-thriving commercial hub.

GM Broening Highway plant

General Motors Corp. has told workers at its Chevrolet Astro and GMC Safari van assembly plant on Broening Highway that it will remain open at least until the third quarter of 2003. As the clock ticks down, state officials will be trying to persuade GM to assign Baltimore a new vehicle. That would mean retooling the 65-year-old plant or building a new factory.


Nolan D. Archibald Chairman and CEO Black & Decker Corp.

Archibald told the state and Baltimore County last summer that if they didn't put up, he might pack up his Fortune 500 company and take its 1,200 local jobs elsewhere. State and local officials coughed up $9.5 million to help the toolmaker expand its Towson headquarters, adding a seven-story office building and a four-level parking garage--and about 340 jobs in the next several years.

William L. Jews President and CEO CareFirst BlueCross BlueShield

Profit margins have gotten slimmer for the state's largest health insurer. In response, CareFirst killed its Medicare HMO and is in the process of shutting down its participation in the Medicaid program. Annoyed key legislators are once again eyeing the special benefits CareFirst gets as a nonprofit insurer. Meanwhile, the insurer continues to work on integrating the District of Columbia and Delaware Blue Cross plans that joined with it under the CareFirst umbrella in 1998 and last year.

Dan Knise President and CEO Washington-Baltimore Regional 2012 Coalition

With the region's 600-page bid for the 2012 Summer Olympics delivered to the U.S. Olympic Committee last month, Knise is focusing his attention on raising the $1 million plus needed to take the region's bid through 2002 when the USOC will name a U.S. candidate city. He also will work to rally local support and to lure more elite athletic events to the area as Washington-Baltimore competes for the 2012 Olympic Games against Los Angeles, San Francisco, Cincinnati, Dallas, Houston, Tampa-Orlando and New York.

C. William Struever President Struever Bros., Eccles & Rouse Inc.

What's old is new again thanks to Struever, who is transforming the city's old warehouses into funky office, retail and residential space and is the prime mover behind the Digital Harbor with his redevelopment of the American Can Co. in Canton and Tide Point, a former Procter & Gamble factory in Locust Point. If anyone can successfully transform the no- man's land of the old AlliedSignal chromium plant near Fells Point, it's Struever.

Susan C. Keating President and CEO Allfirst Financial Inc.

Keating, 50, heads the largest bank based in Baltimore with size and muscle to burn--$18.2 billion in assets and 6,000 employees. But Allfirst, which is owned by Dublin's Allied Irish Banks PLC, has been a sleeping giant. Profit has been mediocre and there has been turnover in key senior positions since Keating was named president in 1998. Keating remains under pressure to deliver the numbers.

Christian H. Poindexter Chairman and CEO Constellation Energy Group Inc.

Constellation Energy is riding high after Poindexter announced in October that the power company will split later this year into two billion-dollar companies based in Baltimore. Poindexter will head the more aggressive national wholesale power marketing company, and he has anointed trusted, key leaders to run BGE Corp., the local power provider. Once he separates the company, however, rumors will be sure to surface on whether the 62-year-old will pull the plug on a highly successful career. Those close to him say don't count on it.

Peter G. Angelos Law Offices of Peter G. Angelos, Baltimore Orioles, real estate

He made a name for himself in litigation, and then bought a baseball team. Now see if Angelos can hit another home run in the city's central business district, where this businessman is winding up to develop a new convention hotel, an apartment building and some renovated office space.

Ioanna Morfessis President and CEO Greater Baltimore Alliance

As head of this regional economic development group, Morfessis works behind the scenes to attract new businesses and to make sure that existing companies are not being lured away. Look for the group to figure out this year how to make Baltimore mesh with six trends that Faith Popcorn identified as relevant to Baltimore; the GBA shelled out $275,000 for the trend forecaster's advice on honing a brand identity for the region.

Anthony Deering Chairman and CEO The Rouse Co.

Charging ahead with new and improved shopping malls such as Fashion Show in Las Vegas, Deering is refocusing his Columbia-based company on the upscale. Rouse, which operates more than 250 office, retail and industrial properties in 22 states, will also be selling more of its stock of land in Columbia and Summerlin in Nevada.

Mayo A. Shattuck III Co-chairman, Deutsche Banc Alex. Brown Co-head of global investment banking, Deutsche Bank AG

Deutsche Bank AG is the second-largest banking company in the world, and Shattuck is among its top 40 executives. But the sprawling Deutsche Bank is undergoing a companywide restructuring, and the death last month of Edson Mitchell, one of its top executives, has complicated matters. Shattuck, 46, is well liked, and Deutsche Banc Alex. Brown has produced on his watch. One of its top deals last year was Krispy Kreme Doughnut Corp., one of 2000's best-performing IPOs. Deals like that could make Shattuck's future as sweet as a Krispy Kreme glazed.

Robert J. Lawless Chairman, President and CEO McCormick & Co. Inc.

One of the few criticisms leveled at Lawless since he took over the world's largest spice and flavorings company had been his lack of aggression in the acquisition arena. He quieted those rumblings when McCormick announced in June that it was buying the world's second-largest spice company, Paris-based Ducros, for $394 million in cash. McCormick is now about 70 percent larger, but when will its share price fatten up?

H. Furlong Baldwin Chairman, President and CEO Mercantile Bankshares Corp.

Baldwin runs Mercantile with an iron fist. He has built the state's largest independently owned banking company--with $8.6 billion in assets--into one of the finest banks on the East Coast if not the country. But Baldwin turned 69 this month and could be stepping down this year, after three contract extensions. Two question marks hang over Mercantile: Who will take charge when Baldwin steps aside? And can that person run the bank as successfully as Baldwin?

David Cordish Chairman and President Cordish Co.

David S. Cordish, the Baltimore-based developer known for giving failed projects new life as urban entertainment centers, will open his latest Inner Harbor attraction this spring. With Power Plant Live, the former Brokerage mall at 34 Market Place, Cordish hopes to bring live entertainment back downtown in a big way. By May, look for The Improv comedy club, Howl at the Moon piano bar, the Delta Grill restaurant, Galleries and light shows in the central plaza, joining a lineup that already includes Ruth's Chris Steak House, Have a Nice Day Cafe and BAR Baltimore.