ANNAPOLIS -- The plan to tack a new headquarters for the State Highway Administration onto the old B&O Warehouse at the Camden Yards baseball stadium site has run into a possible roadblock in the General Assembly.
State legislators are asking whether the Maryland Economic Development Corp. should be financing the construction of the project. They also are doubtful that Camden Yards is the best place to relocate the SHA headquarters.
"I don't think it's illegal," said Sen. Julian L. Lapides, D-Baltimore, a member of the Budget and Taxation Committee. "What's wrong is we have a state agency [MEDCO] that is designed to help the private sector contracting with a quasi-state agency [the Maryland Stadium Authority] to house another state agency [SHA]. . . . It's like a shell game."
The central player in this scenario, MEDCO, proposes to buy the southern part of the warehouse from the Maryland Stadium Authority for $4.7 million and then issue $26.6 million in bonds to renovate the warehouse's exterior and construct the eight-story addition for SHA.
"It does get a little incestuous when you have all these state agencies doing different things," said Laurence Levitan, D-Montgomery, the committee chairman. "We want to make very sure that our analysts look it over and we see everything before we do anything."
Alison Asti, assistant attorney general for the Stadium Authority, said the authority sees no legal problems with the proposed transaction.Hans F. Mayer, MEDCO's executive director, said lawyers who specialize in public finance have reviewed the proposal and given their approval.
"Sure it's legal," said Mr. Mayer, whose corporation was established by state statute in 1984. He said the statute describing what sort of property MEDCO should try to develop "says vacant and underutilized, and what is that building but vacant and underutilized?"
Mr. Mayer said the Stadium Authority came to him with the idea last year. The authority didn't have the money to renovate the warehouse's exterior, and SHA was looking for a new place because the lease on its main office in Baltimore expires this year.
"I think it's a mutual convergence. You've got [SHA], which needs space. You have an opportunity to assist them, and you have an opportunity to assist the Stadium Authority," said Mr. Mayer.
"It strikes me as a 'win' deal," he said. "The other thing is, quite frankly, the private sector has had this thing and nothing has happened. Nobody had wanted to go in there for 20 years."
But now, with the construction of the stadium well under way, Senator Lapides wonders why the state wants to grab a valuable piece of real estate in the Inner Harbor. And he wonders about MEDCO's involvement.
"I think it goes against the legislative intent of MEDCO," he said. "I mean, it was set up to help the private sector, not the state."
Moreover, Mr. Lapides said, the Camden Yards property might not be the best place to put the SHA.
"To put another major thing in the Inner Harbor is just not proper," he said. "[SHA] should be in an area where you can generate business. I think you might be able to get an even better deal than you have now."
The deal, which would have to be approved by the Board of Public Works, calls for SHA to lease its space at $15 per square foot for 25 years, with a three-year notice to vacate after 10 years. It is estimated that the plan would save SHA and the state $20 million over the life of the lease.
"From our perspective, every agency comes out a winner," said Hal Kassoff, SHA administrator. "You're left with a fairly high-quality space as opposed to a very narrow, bowling alley-like configuration."
Still, senators are skeptical of the idea and are awaiting their own legislative analysis.
"I think we ought to look at it. They're saying they can provide space for [SHA] at the same rate they're paying now," said Mr. Levitan. "If everything else proves to be true, it may not be a bad deal. But that's the question: if everything proves to be true."
Although the Stadium Authority has obtained the rights to the warehouse, the courts have yet to decide how much the authority would have to pay to buy the structure from its present owners, Willard Hackerman and Morton Macks.