The National Security Agency has rented a 12-story office building that towers over its sprawling complex at Fort Meade and has remained nearly empty for more than two years, real estate industry and county sources say.
The KMS Group Inc. announced yesterday that the building, which came to symbolize the area's depressed commercial leasing market, had been rented to a "major Department of Defense activity" but would not elaborate.
The office tower, prominently located in the National Business Park near Route 32 and the Baltimore-Washington Parkway, is the largest office building in the county. It is owned by KMS, a subsidiary of Constellation Holdings, Baltimore Gas and Electric Co.'s development arm.
KMS said yesterday that the U.S. Army Corps of Engineers signed the lease for all 250,000 square feet of the concrete and glass building on a year-to-year basis.
"It is just tremendous," said Larry Lichtenauer, a spokesman for KMS, based in Columbia. "Hopefully, it will stimulate greater activity and create a lot of attention to the park."
The building has been available since June 1990. The 350-acre park has two other two-story office complexes -- one of which is rented to several private defense contractors. The other is vacant.
The only tenant in the 12-story building was a company called Security Affairs Support Association, which rented only 2,000 square feet and had a total work force of six people. Mr. Lichtenauer said they probably will be relocated.
The news that the long-vacant building will be leased pleased county officials, who said they hope this is a sign that the market is improving.
"It's great news," said Lynn Palmer, the business development representative for the county Office of Economic Development. "It helps out plenty. I think this is really the impetus that KMS needs for its business park."
But Joe Cronyn, who compiles Legg Mason Realty Group's annual real estate and marketing surveys, said NSA may be consolidating outside offices from rented space around Baltimore-Washington International Airport, meaning other companies may be losing tenants. "For Anne Arundel County, it may not be a plus or a minus," he said.
Mr. Cronyn said the building seemingly was built with NSA or a similar Defense Department operation in mind as a tenant because commercial businesses in Baltimore and Washington were unlikely to find the location attractive.
"It is a very nice building, but it was built in a no-man's land," he said.
County and industry officials said the building's prominent location on a major highway, with its "space available" sign, was a clear indication of a slumping real estate market.
"People used to drive by and see a dark building," Mr. Lichtenauer said. "Now they will see a building with lights. It will be a huge commercial for us. There is nothing like a leasing to put out the good word."
But Mr. Lichtenauer would not discuss the rent for the building, and he insisted he did not know which Department of Defense activity will use the space.
Other sources identified NSA, the largest employer in Anne Arundel County, as the tenant.
The agency, which operates behind a veil of secrecy so thick that neither the number of its employees -- estimated at 30,000 -- or its contracts with private business are made public, said two years ago that it spent $23 million to lease local office space in 1989.
The statement issued by KMS yesterday referring to its tenants only as a "major Department of Defense activity" prompted smirks from people who know better. "I was amused at what they are calling it in the press release," one source said.
Jerry Volker, a spokesman for NSA, said yesterday that he "is not sure if it's us or not" that is renting the building. He said the person who knows the details was not in, but said the agency would have no problem confirming if it is the lessee.