State standing firm on some assessmentsAfter slashing...

COMMERCIAL REAL ESTATE

October 07, 1992|By Timothy J. Mullaney

State standing firm on some assessments

After slashing about $200 million off the tax assessments of downtown office buildings in the first round of tax appeals, state assessors have shown some signs of digging in.

Late last month, owners of both Signet Tower and the Bank of Baltimore building got "final notices" from the state Department of Assessments and Taxation refusing to reduce assessments that the buildings received late last year.

The Bank of Baltimore building's assessment, therefore, stays at $50 million, and the Signet Tower is still worth $58.9 million, according to the state.

Even so, those numbers may not be final.

Elaine Crawford, building manager of the Signet Tower, said the owner, Trammell Crow Co., is planning an appeal to the Property Tax Assessment Appeal Board. Trammell Crow didn't expect to get a reduction in September, she said. She has focused on gathering evidence for the next round of appeals.

"For [the Bank of Baltimore building], income information submitted supported the value," said Richard Nanson, an assessor supervisor for the Department of Assessments and Taxation. "For the other, no information was submitted to dispute the value."

The Bank of Baltimore building is owned by partners led by Manekin Corp.

Meanwhile, two of the city's biggest buildings are waiting for results of supervisor-level appeals. The USF&G tower, at 100 Light St., appraised at $86.8 million late last year, is due to receive its final assessment in about three weeks, said Kerrie Burch-DeLuca, a spokeswoman for the building's major tenant, USF&G Corp. An appeal also is pending on 100 E. Pratt Street, the IBM-T. Rowe Price building.

Since January, appeals have cut some office assessments by 40 percent or more.

The lower tax assessments are a sign of the recession's toll on Maryland's real estate industry. The state, in what officials concede was a mistake, tried to raise most downtown Class A office building assessments from 1988 levels when the new figures were sent out.

State officials said their assessments turned out high because they made appraisals at a fairly early stage of the recession and released the numbers months later, after conditions had worsened.

Towson office building will be auctioned

Later this month, a small office building will go on the block in what is believed to be Towson's first office auction of the recession.

The Riderwood Office Building, at 1107 Kenilworth Ave., will be auctioned at 3 p.m. Oct. 19. The building's owner, Riderwood Building L.P., defaulted on a $1.57 million mortgage from Sentry Life of America, a Wisconsin-based insurance company.

The 21,500-square-foot building is 51.9 percent leased, said Jeffrey Samet, a vice president at W.C. Pinkard & Co. who tracks market statistics for the Baltimore brokerage and property management firm.

Lenders have taken over fewer buildings in the area than in the southern suburbs, especially Howard County.

That's partly because the northern suburbs of Towson and Hunt Valley have lower vacancy rates than does most of the metropolitan region.

"We just think the economic base is stronger in Towson," said Raymond C. Nichols, president of BSC Financial Group in Baltimore, which owns Atlantic Auctions Inc. "There's been a lot of movement from inner city out to that corridor. And there wasn't the go-go building in the Towson corridor that you had in some areas."

At Towson's most conspicuously troubled project, the two-building Dulaney Center, an auction was averted when Maryland National Bank took over and began marketing the buildings.

The bank has a contract to sell one of the two buildings to the Maryland State Retirement Authority, which would use the building as an investment. But MSRA officials said they have not yet closed on the building.

Nova's parent firm will merge operations

It's not a major surprise, but the new owner of Nova Pharmaceutical Corp. is getting ready to shut down the company's headquarters at the Bayview office and research campus in East Baltimore.

"We are indeed working on consolidating our operation, and we are going to be subleasing the . . . space," said Kira Bacon, a spokeswoman for California-based Scios Nova Inc., Nova's parent. "We're working on moving various departments at this point."

Scios Nova, created by a September merger, will consolidate Baltimore operations at 6200 Freeport Circle, where it already has administrative offices and a laboratory. Nova leased about 33,000 square feet of office and laboratory space at Bayview.

Bayview is owned by Dome Corp., the for-profit affiliate of Johns Hopkins University and Johns Hopkins Health System. But a spokeswoman for Dome, Karen Russell, said Dome doesn't plan any immediate involvement in helping lease the old Nova space.

"Nova has the lease on the space and at this point is responsible for the disposition of he space," Ms. Russell said. "While Dome is an interested observer, we're not a participant."

Sources said a Baltimore County company is interested in moving to the Bayview site, but Ms. Bacon said it is too soon to discuss who might sublease the space or on what terms.

For a roundup of commercial real estate leasing activity in Maryland, see Page 12D.

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