Legislators take tour of Shillman BuildingNo word yet on...

COMMERCIAL REAL ESTATE

February 24, 1993|By Timothy J. Mullaney

Legislators take tour of Shillman Building

No word yet on which building the state of Maryland will choose next in its campaign to replace rented office space with newly state-owned buildings, but state legislators toured the Shillman Building at 500 N. Calvert St. Monday.

The former operations center for failed Baltimore Federal Financial has been a leading contender to be sold to the state Department of General Services, which has already agreed to buy 6 St. Paul Centre.

The department says it is in talks with the owners of a second downtown building, which it refuses to identify, but isn't ready to sign an agreement yet.

In the meantime, the department continues to face an unexpected delay in the 6 St. Paul deal -- the state's legislative spending committees have yet to approve it.

"There's a concern about whether it's a building that should be state-owned and occupied," said Sen. Laurence Levitan, D-Montgomery, chairman of the Senate Budget and Taxation Committee. It may be too fancy for some legislative tastes, he said. "A lot of them like [the Shillman Building] better."

"I don't look at it as one or the other," between 6 St. Paul and the Shillman Building, said Sen. William H. Amoss, D-Harford/Cecil, a member of the capital budget subcommittee. "We would be looking at it from the standpoint of the Shillman Building and one other."

Mr. Amoss said the Shillman Building offers an impressive amount of parking and needs little renovation. The state still thinks that the price is too high, he said. Neither side has confirmed its negotiating price, but the building sold for about $1.8 million in 1991.

"I would disagree with that," said L. Bruce Matthai, a vice president at W. C. Pinkard & Co., which has the listing on the building. "You get parking, you get a 30,000-square-foot floor plate. You get a lot."

Mr. Levitan said he still likes the concept of buying 6 St. Paul. "We need a lot of square feet, and the other buildings don't have nearly as much."

Big chunks of space available in Baltimore

Back when times were good in commercial real estate, what passed for a complaint was the theory that Baltimore didn't have enough empty office space -- or, at least, that it didn't have enough big chunks of space for the city to land a major corporate headquarters, the Moby Dick of an economic developer's dreams.

So one might think that a new report from W. C. Pinkard & Co., pointing out that the city now has blocks of 50,000 or more square feet of contiguous space in five buildings, would be good news. But, says the report's author, that may not be true.

"Baltimore is like most markets in that most of its growth is internal," said Jeffrey B. Samet, vice president of Pinkard. Most real estate growth in U.S. cities comes from the expansion of local companies, he said.

Translation: Don't expect Moby to sweep in from out of town to lease all this space.

The other problem: Big tenants might not like these big empty spaces, Mr. Samet said. Each user has specific criteria for floor layouts, technical capabilities and parking, he said. Some buildings will meet them, others won't.

Moral of this tale: There are no easy answers any more.

Real estate lobby likes Clinton plan

The word is in from on high, or at least from the real estate lobby: Commercial real estate does pretty well under President Clinton's economic plan.

Dana C. Rowan, president of NAIOP-The Association for Commercial Real Estate, said Mr. Clinton's package would allow more tax relief for passive losses on real estate assets and would make it easier for pension funds to invest in real estate. That's two out of three industry goals, the Arlington, Va.-based group said.

What's missing? The plan would not change tax rules requiring lender concessions on restructured loans to be booked as an immediate -- and taxable -- gain by borrowers.

HCFA in Baltimore? Sorry, just a misprint

It looked like a clue to a news bombshell, but it was just a dud.

Monday's roundup of available Maryland construction contracts in the Daily Record included a listing for subcontractors on a $100 million job to build a new headquarters. For the U.S. Health Care Financing Administration. In Baltimore.

Last we checked, HCFA's new headquarters was headed for Woodlawn. But the decision was appealed, with a ruling due next month. Had the ruling come early?

Rouse Co., lead developer of the downtown site, said it didn't place any ad. Ditto for the U.S. General Services Administration, which awarded the HCFA headquarters to Woodlawn, and for James F. Knott Development Corp., local partner in the group that won the Woodlawn contract.

Kevin Geraghty, an executive at Knott, said the error apparently originated in a regional construction-industry newsletter listing. The local paper picked up the list -- and the error -- from the newsletter, he said.

By the way, said GSA spokesman John Thompson, don't hold your breath over rumors that the city is using political muscle to get the new Clinton team at GSA to reverse the HCFA decision. There is no Clinton team at GSA yet.

Mr. Thompson said career GSA officials are in charge in Philadelphia, the regional headquarters where the HCFA decision was made, and in Washington. Bush appointees left with the Bush administration.

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