Federal offices put in limbo over financing

November 08, 1991|By Edward Gunts

One month after it negotiated an agreement to enable it to move ahead with the construction of a $39 million federal office building, a group headed by Otis Warren and Theo Rodgers has been unable to obtain financing for the project.

The U.S. General Services Administration sent an official to Baltimore yesterday to determine the reason for the delay and will decide soon on whether to wait for Mr. Warren's group or to go with another developer.

Mr. Warren could not be reached for comment. But John Thompson, director of business and public affairs for the GSA's Philadelphia office, said he understands the developer has been unable to sell the bonds needed to raise funds for the construction of the 11-story, 300,000-square-foot building, planned for the southwest corner of Baltimore and Howard streets.

Mr. Thompson said that Mr. Warren was working with a group affiliated with Legg Mason Realty to sell the bonds, but a buyer never emerged. He said Mr. Warren's agreement with Legg Mason expired and the developer is "in the market himself trying to find a buyer" for the bonds.

On Oct. 2, Baltimore's Board of Estimates approved an agreement in which it offered to lease the building for 15 years if the federal government decided not to occupy it after the first 10. The city agreement was set up to help show prospective lenders that the building, called the City Crescent, would be fully leased for 25 years.

The GSA had extended the developer's deadline to complete construction until the end of 1992 and can't wait much longer for work to begin, Mr. Thompson said. If GSA officials decide Mr. Warren's group can't fulfill its lease obligations, one option they have is to turn to the second-ranked bidder, the Rouse Co., which offered to construct a building on a site it controls just west of the Sheraton Inner Harbor Hotel, he said. They also could reopen the entire bidding process, he added.

For now, Mr. Warren is "still in a gray period where he can find financing," Mr. Thompson said. But "we're quickly approaching a point where a decision has to be made concerning Otis Warren's bid. It's a question that has to be addressed, and pretty soon."

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