Buy Now, Save Later

February 02, 1993

It never made much sense for the state of Maryland to put most of its Baltimore-area office workers into expensive rental space. As rents rise, so do the costs to state taxpayers. It is a never-ending upward cycle.

Three years ago, the Schaefer administration came up with TC proposal to use $88 million in bond money to buy up cheap office space in the city for its own use. But the General Assembly killed that idea in order to save money. It actually ended up costing taxpayers a bundle.

Fortunately, Gov. William Donald Schaefer never gave up on the notion of buying downtown office buildings. Last May, the State Highway Administration bought a Calvert Street building for $8.5 million for its permanent headquarters. Over the next 15 years, the savings from not paying rent are estimated at $10 million.

Also last year, the legislature agreed with the governor's request to use $13 million for downtown office purchases. This should happen within the next few weeks. Again, the savings will be in the tens of millions of dollars.

Now Governor Schaefer is seeking $20 million more in bond money for the same purpose. It's a great time to do so. The recession and the glut of office space allow the state to buy property cheaply. This adds to the taxpayer savings. Another bonus is that the state gains possession of valuable real estate that could be sold off in later years if the state's needs change.

If this new bond money is approved by the General Assembly, the state would be able to shift close to three-quarters of its central operating functions in the Baltimore area from leased office space to the newly state-owned buildings. The future savings are enormous. In 1991, the governor's budget department estimated that by buying up 725,000 square feet of downtown Baltimore office space, the state could save an astounding $600 million over 40 years. Even if these numbers are optimistic, the benefits are substantial.

Legislators should endorse this latest step designed to ease the long-term burden on taxpayers. As real-estate agents always tell their clients, "Why rent when you can buy?"

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