The development team named to construct a new federal office building in Baltimore has agreed to pay the city $3.3 million for the downtown site.
Baltimore's Board of Estimates approved yesterday an agreement that calls for the city to sell half an acre at the southwest corner of Baltimore and Howard streets to City Crescent Limited Partnership, a local group headed by minority developers Otis Warren and Theo Rodgers.
The action is a sign that the city is willing to proceed with the sale even though the federal government's decision Aug. 31 to lease 250,000 square feet of space in the Howard Street office building has been challenged by a competing developer and is being reviewed by the U.S. General Accounting Office.
Although the GAO review could take three more months to complete, city officials say they are operating under the assumption that the $37 million project will survive the challenge from a group headed by developer Leonard Attman.
If built as planned, the 11-story, 340,000-square-foot building will be the first major office project in Baltimore built by a minority-controlled company.
Mayor Kurt L. Schmoke said yesterday that the project is "an important step toward full minority participation" in the renewal of downtown Baltimore.
"I am pleased that a meeting of African American developers that I convened last winter to discuss future downtown development opportunities has borne fruit so quickly," the mayor said.
"And I congratulate Otis Warren and Theo Rodgers on their selections by the federal government for this premier project, which will provide new business and jobs for Howard Street."
Under the terms of the land-sale agreement, the developers are required to pay the city $500,000 initially and the rest of the principal and interest over the next 10 years.
They are required to pay interest of 5.9 percent annually, and if they sell or refinance the project in less than 10 years, they are required to pay off the total still owed at that time.
Jeff Middlebrooks, a vice president of Center City-Inner Harbor Development Inc., the agency that oversees downtown development, said the $3.3 million figure includes the air rights over a portion of Redwood Street, which the building will span.
He said the project still requires City Council legislation authorizing the city to sell the Redwood Street air rights to the development team.
The building has been designed by the Wiehe Partnership of Washington to house 2,500 government employees from agencies including the Army Corps of Engineers, the Small Business Administration, the National Labor Relations Board, the Equal Employment Opportunity Commission and the Department of Housing and Urban Development.
Expected to generate $500,000 annually in real estate taxes, the building is the first phase of an $80 million complex that is to include an 800-car garage at Redwood and Eutaw streets, 168 apartments above the garage and a second office building at the northwest corner of Howard and Lombard streets.
Construction is to begin about Nov. 1 and be complete by March 1992.
Mr. Attman, who heads the group that registered the protest against the City Crescent selection, is developer of the proposed Baltimore Financial Centre, a 34-story office tower planned for the southeast corner of Charles and Redwood streets.
The Financial Centre project was one of eight offered as sites for the federal agencies, but it lost out to the City Crescent proposal. Mr. Attman has declined to comment on the protest.
John Thompson, an executive assistant with the U.S. General Services Administration, which selected the City Crescent proposal, said the GSA has until Oct. 15 to make a report to the GAO showing why it did so.
The GAO then will have three months to determine whether the award process was carried out properly and report back to the GSA, which probably will follow the other agency's recommendations, Mr. Thompson said.