The city has forfeited a $1 million federal business grant because the project the grant was to fund proved unfeasible.
The Board of Estimates yesterday voted to terminate acceptance of the grant from the federal Economic Development Administration.
The $1 million was to be used to redevelop the old school headquarters building on East 25th Street into a small business "incubator."
After architectural plans were drafted for the site, however, the city learned that the renovation costs would be $2.5 million -- a figure that made the project unfeasible, Mayor Kurt L. Schmoke said.
"This was envisioned as a place for small business to develop. It would have had high-tech laboratories for high-tech companies and offer below-market rents," Schmoke said. "But the project was uneconomic. No one would be able to recover their money with the cost of the proposed project."
The city has since been able to open the small business incubator for $1 million less at the South Harbor Business Center on Key Highway, but the project was funded with city money after the federal government refused to allow the city to shift the grant to the new site.
But, while the grant is lost for now, the city is in discussion with EDA about using the money on other projects, Schmoke said. One is a long-planned renovation of the old American Brewery building in East Baltimore. There are several proposals for that site, including one that would make it into a home for several small businesses.
"There is no guarantee the city will receive the grant," Schmoke said. "But if the board had not terminated the agreement, we would have no chance of receiving another EDA grant."