Buying up offices in Baltimore

January 25, 1993

The state of Maryland is about to embark on a spending spree. Only this time, legislators in Annapolis are all in favor. So is the governor's office. There's a good reason: It will be money well spent.

What this $13 million will buy is up to 300,000 square feet of downtown office space. State offices dealing with central operating functions will move from expensive, leased space to the new state-owned facilities. The savings will be in the tens of millions of dollars.

Rental space is an extravagance for government. Rent payments always rise. For this money, the state gains no benefit from the increasing worth of that building. But once the state becomes its own landlord, taxpayers become the beneficiaries of not having to pay rent and also owning real estate that is certain to appreciate in value.

Three Baltimore office buildings are in the running for the state's purchase: the Munsey Building at 7 N. Calvert St.; 6 St. Paul Centre at 6 St. Paul St., and the Shillman Building at 500 N. Calvert St. Last year, the State Highway Administration spent $8.5 million to buy its headquarters building at 707 N. Calvert St., a move that should net the state a $10 million profit over the next 15 years.

Another spending spree could be in the offing. Gov. William Donald Schaefer, in his capital budget request, has asked the General Assembly to approve $20 million in bonds for the purchase of office buildings. State government has 1 million square feet of space under rent in the Baltimore area for its many internal operating functions. The more offices that can be moved to state-owned buildings, the bigger the future savings.

Three years ago, Governor Schaefer tried to use $88 million in bond money to buy six Baltimore office buildings. This plan was rejected by the legislature. That was unfortunate because the 40-year savings from those purchases was estimated at a whopping $600 million.

Since then, lawmakers have reversed themselves. They approved the $13 million sought by the governor last year for downtown office purchases, money that should be committed in the next few weeks. Another $20 million spending spree in the next fiscal year would enable the state to continue to take advantage of the depressed downtown real estate market and to move more state workers out of expensive rental space. It's a good deal for government and for state taxpayers.

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