The Maryland Institute College of Art's long-delayed plan for a student housing complex in Bolton Hill is expected to finally move forward next week when Alex. Brown & Sons Inc. brings to market a $12 million bond issue to fund the project.
The institute's plans were derailed in August when Moody's Investor Service downgraded the debt of MNC Financial just days before its subsidiary, Maryland National Bank, was to have signed a final construction loan agreement with the school. The lowered rating left MNC unable to sell commercial paper to back up the loan and forced Maryland Institute to delay construction until it could secure new financing.
The new package is "a totally different form of financing" from the scuttled loan, Maryland Institute President Fred Lazarus said. The 30-year bonds will be priced and put on the market Wednesday, said Orlando Springs, a vice president in the municipal finance department of Alex. Brown, the sole underwriter. The bonds are exempt from federal taxes and, for Maryland residents, from state and local taxes as well.
For the Maryland Institute, the offering means the end of a nine-month struggle to replace the Maryland National loan. "It's been a long, drawn-out process, but it's great to see it off and running and ground about to be broken," Mr. Lazarus said.
He added that the delay had actually allowed the school to cut construction costs from $12.6 million to $12 million because of changed market conditions and lower interest rates.
Construction will begin this spring and end in time for the beginning of the fall term in 1992, a year later than originally planned, Mr. Lazarus said.
The project will be the school's largest ever in terms of dollars, Mr. Lazarus said. Previously the only college-owned housing available to students was in 10 converted town houses in the neighborhood.
With an increasingly national and international student body, the institute faces a growing demand for affordable housing near the campus. According to Mr. Lazarus, two-thirds of the institute's students come from outside Maryland -- the reverse of the proportion 10 years ago.
The four-story complex, made up of four apartment buildings grouped around a courtyard, would house about 350 students in units. In addition, the institute will create 150 off-street parking spaces on the 5.7-acre parcel between North Avenue and McMechen Street.
Schamu, Machowski, Doo and Associates is the architect and Roy Kirby & Sons is the general contractor for the project, which has received all necessary design approvals.