The U.S. Drug Enforcement Administration has signed a 10-year lease to move its Baltimore office to the St. Paul Plaza office tower at 200 St. Paul Place, a move the building's developer said would help its bid for a successful reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The DEA will lease 27,700 square feet of the 13-story office building for about $28 a square foot, said David W. Kornblatt, the project's developer. The agency will move out of the Fallon Federal Building.
That rate is about the same as what the building was asking when it opened in 1989 in a much stronger real estate market. But Mr. Kornblatt said he had to throw in options to get the same price in 1992: six months of free rent; free parking for 104 cars in the project's 900-space garage; and, a promise of no rent increases for 10 years, except for increases to pass along higher building expenses.
"I'm happy with what I got," Mr. Kornblatt said. "It's as well as you're going to do in this market, believe me."
Mr. Kornblatt said he expects the DEA to rent more space in the building, but said he can't say how much more. Officials of the General Services Administration, which handles leasing transactions for federal agencies, couldn't be reached for comment yesterday.
The partnerships that own the building and the parking garage filed for protection from creditors under the bankruptcy code last year, as did Mr. Kornblatt's own company, which has interests in other projects than the St. Paul Plaza building.
Mr. Kornblatt said that the entities were preparing their plans for reorganization and that the new lease, which represents about 10 percent of the building, will be a major help.
"It beefs up the income" the building will generate, Mr. Kornblatt said. That, in turn, gives some or all of the entities more ability to pay their creditors.
The building is now 81 percent leased, Mr. Kornblatt said.