Mike Caruthers
For someone who’s worked from his Montgomery County base of Bethesda-Chevy Chase and lived in Northern Virginia for decades, Mike Caruthers certainly has made a substantial impact in the Baltimore area.
His influence can be felt by anyone who frequents Arundel Mills. He was a pivotal figure in the planning and construction of the regional mall, and the surrounding retail and hotel properties — which included working with 22 community associations during the process.
While the Mills project is key to his legacy, his fingerprints are also all over the adjacent Arundel Preserve, Arundel Overlook (located right across Route 100 from the mall) and Baltimore Crossroads at 95, a huge undertaking located near White Marsh Mall in Baltimore County.
On the occasion of this year’s Salute to the BWI Business District & Fort Meade, the normally press-shy Caruthers agreed to an interview with The Business Monthly that spans from his early career to his views on retirement.
What was your exact role in the development of Arundel Mills?
I graduated from college in January 1972 and was accepted to grad school that September, but I was married and needed a job. So, I went to work for a guy named George Reditz. It was intended to be for that summer; but, of course, it’s turned out to be the only job I’ve ever had.
His family owned the Arundel Mills property, which was about 460 acres at the time. We bought an additional 135 acres in 1982, 500 more in the early ’90s and 70 more in 2000. So we ended up with almost 1,100 acres zoned for various uses.
When George passed in 1987, I was named a personal representative of his estate. We needed to do something with the property, so my partner Neil Greenberg and I formed a company and started thinking. It was suggested as a site for a music pavilion, then we had a deal with Trammell Crow to make it an office park; however, a regional mall was a better use. So we contacted Simon Malls with that idea — partially because The Mills Corp. wouldn’t give us the time of day.
What are you proudest of concerning Arundel Mills?
I’m proudest that we’ve been true to our word with the community about our plans for the property and the quality of the project. Most community groups take an adverse reaction to real estate projects, but I have an axiom that I live by: “Support the good projects, and reject the bad ones. If all are rejected, no one benefits.”
Construction at The Hotel at Arundel Preserve is almost complete. What sector of the market are you targeting with the project?
We are passive owners of the hotel and the restaurant, which is owned by Southern Management Corp. We think it will be supported by Fort Meade, so it will be priced as a limited service hotel, though it will have all of the amenities associated with a full service hotel. We want to attract business meetings of up to 350 people and keep the hotel occupied on the weekends with weddings, etc. Not catering to the weekend market has been an issue for the hotels in the BWI Business District.
You’ll have a new white tablecloth restaurant (à la Clyde’s of Georgetown) coming online at the hotel. It looks like you’re trying to create a market there, given the dearth of that type of offering in the district.
Typically, hotel restaurants are not something that the public at large will use. However, we’re advertising it separately, will offer outside seating and have a separate entrance. It will also have its own sign. We’re doing everything we can to market it as a restaurant at a hotel, not a restaurant within a hotel.
And what’s your outlook on the state of the hotel market in the BWI Business District?
Good. I don’t know what the effect of slots will be, but the market is picking up, Fort Meade is expanding and cyber is just getting started.
What projects are you working on with St. John Properties?
One is Arundel Overlook, which is 340,000 square feet of office and flex space. We have five of the eight buildings finished there, as well as the three pad sites; the other is Baltimore Crossroads at 95, which is located in White Marsh. Eventually, we’ll have 6 million square feet of office, flex and retail built on the property; of the 1.4 million that’s already been built, we’ve put up about 400,000 square feet.
During a conversation we had in 2009, you said that you were expecting the commercial real estate recovery to take several years. Are you sticking to that?
Well, there are some small deals going on, and there’s more tire-kicking in general. On the residential side, we build a lot of apartments and they’re leased extremely well, and single family and townhomes are selling very well.
On the commercial side, the Arundel Preserve mixed-use project also includes a retail element that features Einstein Bagels and an Indian restaurant. We’re also trying to lure a gourmet burger restaurant. If we do, we’ll be 100% leased.
However, we put up a 153,000-square-foot LEED Gold building with Corporate Office Properties Trust three years ago and we still only have one 7,000-square-foot tenant. Still, we remain optimistic.
At Baltimore Crossroads at 95, Jim Lighthizer of Chesapeake Real Estate Group bought about 100 of our 1,000 acres about four years ago and immediately built three industrial buildings. He leased about 60% of the space then, but he couldn’t fill them up until earlier this year; however, I think that recent action indicates that we’re pointing in the right direction. People who need to expand aren’t as afraid to now — or they perhaps feel that they have no choice.
Are you expecting BRAC to have the impact that the area’s business community has generally assumed that it will?
I do. It’s a slow buildup, but that’s not necessarily a bad thing, because our infrastructure — and I don’t just mean the roads, I mean everything — can’t handle the influx of the Base Realignment and Closure (BRAC) yet. But it’s real. And I think this will be the cyber capital of world, if it’s not already.
What do you hope to accomplish as the incoming chair of Baltimore Washington Medical Center?
To keep improving the facility. The way you measure that is to be in the top 10% of composite scores for safety and quality. It’s crucial that they remain high.
The other thing is that we have is an aging population, coupled with the BRAC transplants. So we have to constantly reassess our surgical offerings to satisfy the needs of the market.
What kinds of projects do you seek out to work on today?
Smart growth. It’s here to stay. Twenty-five years ago, development was easy in this area because we had designated where people would live, work, etc. But that doesn’t work anymore because we don’t have much developable land left.
Also, regardless of the price of gas, people don’t want to travel. They want to live and work in close proximity to where they live, which is also due to the time constraints that cramp all of our lives.
Could you ever retire?
No. I’ll gradually start spending more time away from the office, but if I don’t have anything else to do that day, I’m going to work.
We have so much property that we’ll be busy for quite some time. We have another 2 million square feet of office, another hotel and more retail to build at Arundel Preserve; at Baltimore Crossroads, we have 3 million more square feet to build, plus 22 acres adjacent to Quiet Waters Park in Annapolis.
