Gateway Wins The Lottery And Fills Up Office Space

21,000-square-foot Lease Takes Half Of 1 Building

June 23, 1991|By Erik Nelson | Erik Nelson,Staff writer

The Rouse Co.'s tenant-starved Columbia Gateway office and industrial park was just the ticket for the Maryland State Lottery's new computer contractor, GTech Corp. of Rhode Island, which opened its new lottery data center there Friday.

"We're thrilled. We think that GTech is obviously going to make a major contribution to the park, to thelarger Columbia Gateway project and to the business community as a whole down there," said Harvey Hanerfeld, a managing director of Dean Witter Realty Inc. in New York, which owns the property.

GTech has leased nearly 21,000 square feet in the Greenway Pointe, renamed after Dean Witter Realty Inc. took over sole ownership of the three-building, 118,000-square-foot Sammis Gateway Center from LeeSammis Associates about a year ago. There will be 44 employees working from the office.

The deal, which will fill half of a 40,000-square-foot building that had been vacant for a year, brings the amount of space leased at Greenway Pointe to about 65 percent, according to a leasing specialist in Columbia.

"We liked the appearance of it, and we were able to negotiate . . . the availability, how much space,the price; they were able to meet everything we needed," said GTech site director Victor Contino.

Hanerfeld would not reveal the priceof the five-year, four-month lease, but a commercial real estate insider indicated that other recent leases in the center have gone for as little as $8 a square foot, once concessions such as improvements are factored in.

Prices ran about 50 percent higher last year, before the slump in commercial real estate.

Contino, who helped pick the site, said one its chief advantages was accessibility from all parts of the state, since interstates 95 and 70 as well as U.S. 29 and 40 run through Howard County.

Locations in four other counties alsowere considered, he said.

"We'll have about 24 vans running around the state doing service, so it had to be where they didn't get tiedup in too many traffic jams," he added.

On July 1, the company will begin replacing more than 1,800 terminals run by the Lottery's current computer contractor, Control Data Corp. of Minneapolis.

The state-of-the art machines will be able to process Lottery transactionsmuch more quickly and accurately than the existing machines, many ofthem installed nine years ago, said GTech marketing director Craig Watson.

A GTech system comparable to the one being installed here has performed as many as 300,000 transactions per minute.

The company estimates that a top-line system of nine years ago would have processed only 10,000 transactions a minute.

GTech under-bid Control Data by $17 million to win the $64 million contract from the state Board of Public Works April 17.

The two companies compete for lotterycontracts nationwide.

When the scheduled set-up process is completed by July 24, GTech will have in place about 1,950 of its machines,which will be owned by the lottery but run and serviced by GTech, Contino said.

If the computer center in Columbia goes down, operations will switch automatically to a backup center in Landover in PrinceGeorge's County, he added.

The company operates lottery computer systems in 51 jurisdictions in the United States, Europe and Asia.

The lease of such a large chunk of property suggests movement in themoribund commercial leasing market. Columbia Gateway, with a 35 percent vacancy rate, was hit especially hard.

"Things are picking up.We have seen quite a bit more activity this spring," said Kim Penny,an office leasing specialist with Casey & Associates in Columbia. Nevertheless, the space leased by GTech far exceeds the amount leased by the typical Columbia tenant -- usually about 5,000 square feet, Penny said.

Penny, who represented Dean Witter in the negotiations, worked for Lee Sammis Associates before the company pulled up stakes and transferred its interest in the Gateway partnership.

The company is based in Reston, Va.

Hanerfeld said Dean Witter had put up most of the money required for the development, while partner Lee Sammis Associates was to have managed the three buildings.

"As time moved on and the real estate market deteriorated, it became clear that Sammis was not going to be able to expand into the Howard County market the way it had intended to," Hanerfeld explained.

"Since we had all the money up, we decided amicably that we would just . . . becomethe sole owner of the park, that we would acquire their interest," he said.

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