In Kevin Plank’s telling, he was sipping whiskey when he gazed up at the Dubai skyline and thought: Why can’t Baltimore do something like this?

It was 2013, his company, Under Armour, was booming, and Plank craved a campus that would rival Nike’s sprawling headquarters near Beaverton, Oregon. He set his sights on the South Baltimore neighborhood of Port Covington, a largely abandoned industrial area. Skyscrapers would rise from the site, glittering above a new waterfront community where a small army of employees would live, work and play.

Since then, that vision of Dubai on the Patapsco River has turned out to be a mirage.

Under Armour dramatically scaled back its headquarters plans. The site underwent three rebrands. The first phase of development is complete, though much of the new retail and office space remains empty. And the developer has not released any additional plans.

But the region’s utility company, Baltimore Gas and Electric, still believes the proposed development — now called Baltimore Peninsula — will one day become a pulsating metropolis. To prepare for this possibility, BGE is spending more than $130 million on a massive new substation and related infrastructure, public filings show.

Spread among BGE’s 1.3 million customers, this spending will be almost imperceptible on the average bill. But it’s one of the biggest projects in BGE’s construction pipeline — and it’s these kinds of expenses that are largely driving rates higher, consumer advocates and elected officials say.

As energy bills soar, the spending at Baltimore Peninsula raises an important question: If there’s a risk that the development doesn’t materialize as originally planned, why should BGE’s customers pay to support it?

BGE and Baltimore Peninsula coordinated their responses to this story. The utility company and the developer said this project — which state regulators have approved — is about more than preparing for the future electrical needs of Baltimore Peninsula. It will also replace aging equipment and benefit existing customers throughout the region.

Consumer advocates say there’s another powerful incentive at play: profit.

When BGE invests in new infrastructure, like a substation at Baltimore Peninsula, the utility earns a rate of return on that substation for as long as it’s in service. That means BGE’s customers pay the utility back for decades, plus profit.

To put it simply, BGE makes money when it spends money, said David Lapp, who leads the Maryland Office of the People’s Counsel, the state’s ratepayer advocate.

With compound interest and profits paid to investors, Lapp said, $130 million in infrastructure spending by BGE will cost ratepayers closer to $500 million in the long run.

“Developers have an incentive to think big,” Lapp said. “Utilities have a huge incentive to think big.”

In a statement, Under Armour spokesman Matt Dornic said the company is “deeply optimistic about the continued momentum and transformation of Baltimore Peninsula.”

“Our campus represents much more than a collection of buildings — it’s a statement of belief," Dornic said. “In our teammates, the Under Armour brand, and in the city that helped shape us.”

A new city of Maglevs and futuristic helicopters

Back in 2013, Plank had reason to be bullish.

Under Armour was on a hot streak. His Baltimore-based apparel company was reporting quarter after quarter of at least 20% revenue growth. That growth was central to the brand’s identity.

Plank already owned some land at what would become Baltimore Peninsula. When he returned from Dubai, his real estate company, Sagamore Development, bought up more parcels, eventually creating a development district of about 235 acres. Sagamore hired Maryland-based Weller Development to oversee the project. Plank knew its founder, Marc Weller, from childhood.

In 2016, Sagamore Development unveiled its ambitious plans for the site: 14 million square feet of new development on a new street grid. It included office space, apartment complexes, stores, restaurants and more. The expected completion date was 2041.

Much of that development would be justified by Under Armour’s new headquarters. An estimated 10,000 employees would work across a series of skyscrapers and buildings, totaling 2.9 million square feet. There would also be a high-tech manufacturing facility as part of “Project Glory,” an initiative to bring shoe manufacturing back to America.

“That’s the driver of how this is going to happen,” Caroline Paff, a vice president at Sagamore Development, told The Baltimore Sun in 2016.

To make this multiphase vision a reality, Sagamore asked in May 2016 for a $658.6 million tax break, in what’s known as tax-increment financing bonds, or TIF bonds. The city agreed to borrow the money on behalf of the developers. Property taxes would be diverted for decades to repay these bonds. ($137.5 million has been borrowed so far.)

The money would pay for public infrastructure, including the storm drains, sidewalks and parks needed for a new community. But it wouldn’t cover new electrical infrastructure. That would be the responsibility of BGE and its ratepayers.

Then Under Armour’s fortunes shifted dramatically.

The company reported fourth-quarter revenues for 2016 that were lower than expected. The chief finance officer resigned abruptly on Jan. 31, 2017, for “personal reasons.” The stock price plummeted, falling 50% by the year’s end. Investors would later accuse the company of manipulating sales figures to boost revenues. Under Armour paid $434 million last year to settle those allegations. The company denied wrongdoing.

After the stock price’s initial plummet in 2017, Under Armour softened its plans for a new headquarters, telling The Baltimore Sun that construction would unfold as needed — not according to any strict schedule.

That September, a new opportunity arose.

Amazon announced its intention to build a second headquarters outside Seattle, setting off a national frenzy. Cities and states rushed to assemble incentive packages to woo the retail giant.

Baltimore worked with Weller Development to create a digital brochure. Renderings showed people walking along a footpath next to a Maglev train station. Rows of gleaming office towers stood like canyon walls. Futuristic helicopters flew overhead.

Amazon did not pick Baltimore.

In 2018, after three cybersecurity companies committed to moving there, Weller Development tried another rebrand, dubbing the site “Cyber Town, USA.”

Construction started in 2019. The first phase included a hotel, an apartment building, a mixed-use building and a large office building. Then the pandemic hit.

As demand for office space plummeted, the cybersecurity firms scrapped their plans to move to the site. Weller Development dropped the “Cyber Town, U.S.A.” nickname in 2021.

The next year, the development team replaced Weller with New York-based MAG Partners and San Francisco-based MacFarlane Partners. One of MAG Partners’ first steps was rebranding the site from Port Covington to Baltimore Peninsula.

Construction on the first phase wrapped up in 2023. Since then, hundreds of residents have moved into the apartment building. CFG Bank relocated its headquarters from Baltimore County. High-profile tenants, like the restaurant Slutty Vegan, have opened.

In recent months, Baltimore Peninsula has signed leases with the firms PwC and Newmark, as well as a satellite campus of the University of Maryland’s Robert H. Smith School of Business. All three will be moving from in and around downtown Baltimore to occupy about 40,000 square feet at the Rye Street Market building.

But recent financial disclosures to bondholders show that roughly half of the retail and office space at Baltimore Peninsula remains vacant, and the project has yet to repay almost all of its $280 million in construction loans.

Last year, Under Armour opened its new headquarters at Baltimore Peninsula, a 275,000-square-foot building with 1,500 employees.

The company has no other plans to expand its headquarters, though Dornic said the company has “always believed that investing in Baltimore’s future is inseparable from investing in our own business.”

Like Under Armour, the peninsula’s future doesn’t appear poised for massive growth.

Nearby is Locke Landing, a community of hundreds of new rowhomes and apartments on one of the few parcels not controlled by Baltimore Peninsula. A different firm, 28 Walker Development, bought the land in 2022 and spearheaded that project, which is under construction.

State officials recently studied a proposal to put a minor league soccer stadium on Baltimore Peninsula’s land, but there’s no plan to fund such a project.

However, office space was expected to be the primary driver of electricity demand on the site. Sagamore Development’s original plans said office space would use a disproportionally high amount of electricity.

Yet there are currently no plans to build more office space — or anything else — at Baltimore Peninsula.

When asked about future phases of construction, spokesperson Eve Jalinoos said via email that Baltimore Peninsula will share that information “as we progress.”

Jalinoos said the 235-acre site can still have up to 14 million square feet of new development. One-tenth of that space has been built.

Jalinoos said that the COVID-19 pandemic slowed the initial construction but insisted that the 25-year timeline for site development still applies to Baltimore Peninsula.

“Nothing has changed,” Jalinoos said.

‘Gold-plated’ power projects

Despite the evolving plans at Baltimore Peninsula, BGE never wavered from its commitment to the project.

In 2015, before Plank had publicly announced any plans, BGE was already talking with his development team about the future energy needs of the site, according to a timeline BGE provided to regulators.

When the city produced its marketing brochure for Amazon in 2017, it said BGE had been planning a new substation at what was then called Port Covington for more than two years. The brochure included comments from BGE’s then-CEO, Calvin Butler Jr.

“It is with great enthusiasm that I am writing to recommend Port Covington in Baltimore, Maryland for Amazon’s HQ2 development,” said Butler, who is now CEO of BGE’s parent company Exelon. “Our strong partnership with Sagamore Development will ensure future energy needs of the Port Covington project are met on time and on budget.”

The brochure also said the site already had enough existing utility infrastructure to handle 4 million square feet of new development.

In 2020, BGE went before Maryland regulators, the Public Service Commission, and asked for permission to raise its customer rates. It asked the PSC to pre-approve spending on all of its major construction projects for the next three years, a new approach called a multiyear rate plan.

Among the biggest projects on the horizon was the buildout at Port Covington.

In testimony to the commission, Ajit Apte, BGE’s then-vice president of technical services, said the company’s spending would spike in 2023 “mainly due to significant levels of work beginning to support the Port Covington redevelopment.”

The redevelopment of Port Covington needed more than a single substation, Apte said. It required a substation in nearby Westport to be demolished and rebuilt first, he said, plus new electrical infrastructure to connect the two sites.

The Public Service Commission approved the plan, but BGE’s filings show that much of the construction did not start as projected. In 2023, BGE resubmitted it plans.

That time, there was more pushback.

From an Under Armour campus to Amazon’s second headquarters to Cyber Town, U.S.A., to Baltimore Peninsula, the project was by then on its fourth iteration.

Staff for the Public Service Commission asked whether BGE had considered that the development might not materialize as planned.

Lapp and the Office of the People’s Counsel took that line of questioning even further.

In its filing to the commission, the ratepayer watchdog listed a number of reasons why the development might struggle: aftereffects of the COVID-19 pandemic, the collapse in demand for office space, the tighter lending standards today and the possibility of a future economic recession.

Given these possibilities, the Office of the People’s Counsel asked: Why is BGE pushing to build the Baltimore Peninsula infrastructure?

BGE rebutted both questions. The utility company said it was confident the development would proceed to completion, which meant BGE needed to start building utility infrastructure now.

Laura Wright, BGE’s current vice president of technical services, testified to the PSC that the utility company “meets frequently” with the developers at the site. In a different filing, BGE said it “works closely with the respective developers on at least a monthly basis.”

It’s unclear what was discussed in these meetings.

BGE declined to make Wright available for an interview, and a spokesman said the company doesn’t disclose its conversations with individual customers. Similarly, Baltimore Peninsula declined to make any of its executives available for interview or answer questions about its meetings with BGE.

The Public Service Commission approved BGE’s spending plan, including the $130 million related to Baltimore Peninsula — and the profits that will accompany this spending. The future electricity needs were well-documented, they wrote, and not approving this spending might one day lead to a system overload.

The decision was part of a larger ruling, which paved the way for BGE to raise its rates over the next three years. The company said these bigger bills are needed to finance a variety of projects that ensure the safe and reliable delivery of gas and electricity.

It sounds more like a high-interest credit card scheme to Emily Scarr, a senior adviser with the Maryland PIRG Foundation, a nonprofit public interest research group.

In this scenario, BGE is both a credit card company and a shopaholic holding a credit card, Scarr said. BGE swipes its credit card, racking up charges for new gas pipelines and electric substations, but it’s ratepayers who spend decades paying off the balance — to the benefit of BGE and its shareholders.

Many of these purchases are necessary, Scarr said, but BGE has a “perverse incentive” to swipe that credit card often — and no strong incentive to seek the best deals. She and other consumer advocates have criticized BGE for the explosion of “gold-plated” capital projects.

“If your profits are tied to spending, you’re going to spend as much as possible,” Scarr said. “This is why we have seen BGE’s profits triple since 2010.”

Today, Baltimore Peninsula bears little resemblance to the skyline of Dubai, though BGE is still preparing for that possibility.

The utility company has already done some construction work at Westport. BGE spokesman Nick Alexopulos said in an email that a new substation has already been built at Clare Street. An 80-year-old substation across the street is also going to be demolished and rebuilt. Alexopulos said the new indoor substation is expected to be in service by 2028.

And the private utility spent $4.2 million buying land adjacent to Baltimore Peninsula for its future substation. Demolition and construction have not started.

Alexopulos said BGE is “working through approval delays outside of its control and load forecast changes from when the project was initially planned.”

He declined to answer questions on the substation’s current cost estimate, saying it’s in the design and engineering phase.