Parkway invests in downtown

FIRST SINGAPORE, NOW BALTIMORE

October 25, 1993|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

They're best known for fashion marts in Singapore, medical centers in Malaysia and residences in London. But officials of Singapore-based Parkway Holdings Limited see a bright horizon half a world away in Baltimore.

As general partner and half-owner of two major projects -- a $600 million Inner Harbor community and a proposed $600 million medical trade mart near Camden Yards -- Parkway intends to play a major role in shaping the city's downtown.

"There's a lot of wealth . . . in this area," said Parkway Finance Director Tan Kai Seng.

Parkway and its partner, Baltimore developer Richard A. Swirnow, still face significant obstacles. At HarborView, which opened its first residential tower last month, they must overcome a perception that Baltimore and condominiums don't mix. To build the 2.5 million-square-foot medical mart, they must acquire additional city-owned parcels and dodge any ill effects from President Clinton's health reform plan.

In both projects, they must convince skeptics that they have the financial strength to complete their ambitious projects.

"It's difficult to do a project so when you're finished the timing is good for you to sell . . . " Mr. Tan said, commenting on opening HarborView amid an economic slowdown. "If the timing is not right, it's a question of holding power."

Parkway has that, he says, thanks to a broad income base. By building, owning and managing hospitals, medical centers and shopping centers, the company says it can ride out real estate slumps. Parkway reported profits of $22.6 million in 1992, compared to $13.4 million in 1991.

Current projects include doubling the size of the 132-bed Gleneagles Medical Center in Malaysia, expanding Gleneagles Hospital in Singapore to 500 beds and 144 suites, converting the former Singapore Warehouse building into a wholesale fashion merchandising center and building a $50 million residential and commercial complex, also in Singapore.

In London, the company has built several projects, with a total of more than 40 residences. Parkway also gained international recognition in 1987 when it restored the landmark Queen Victoria Building, which houses shops and eateries, in Sydney, Australia.

Neither the perception of Baltimore as a poor condominium town or unanswered questions over land acquisition for the medical mart has shaken Parkway's confidence. The team recently sought City Council approval for an $8 million, 180-bed nursing ,, home across Key Highway from HarborView.

The right ingredients

For Parkway officials -- introduced to Mr. Swirnow after he had a falling out with previous partners -- the Baltimore projects contained the right ingredients. They offered sufficient size, proximity to the Washington market and locations near the internationally known Inner Harbor.

Downtown Baltimore shouldn't be so different from the centers of European and Asian cities, where middle- to upper-income people live and work, Mr. Tan says. He expects the Key Highway site, planned as a 42-acre village of 1,600 condos and town houses, to draw buyers "who live an hour away in heavily wooded areas but have to keep up large homes, and want the alternative of living in a high-rise with all the features and amenities and conveniences of being downtown."

Parkway's experience has helped HarborView by incorporating ideas that have proven successful in other parts of the world, Mr. Swirnow says. For example, Parkway suggested improving security and privacy by building resident parking below the tower and the circular entryway above a public promenade.

Still, Parkway officials were aware of developers or lenders who held auctions or cut prices at such developments as Scarlett Place, Canton Cove, Harbor Court and Belt's Landing.

Because many projects opened one after another, competing for buyers, "the market in luxury condos in Baltimore has never been terrific," said Michael Yerman, associate broker with Prudential Preferred Properties. Unlike Boston or New York, "in Baltimore, you can live in the suburbs and be downtown in 20 minutes. That has always hindered condo sales."

Mr. Tan disagrees, noting that even in troubled developments, "most of the better units sold. We felt [other developers] could be constrained by design or pricing problems."

Local brokers say the condo market might be improving. About 100 of the first HarborView tower's 248 units have sold, at prices from $161,000 to $1.7 million. And HarborView, which has a marina, should appeal to a broader market -- boaters or companies looking to house out-of-town officials, as well as empty-nesters and young professionals, says Nancy Hubble of W. H. C. Wilson & Co.

"If a developer is financially strong and can wait out the market and let customers absorb what's out there, they'll be fine," she said. "Eventually they do sell."

Meanwhile, Parkway and Mr. Swirnow -- Parkway/Swirnow Group Ltd. -- are proceeding with plans for the International Life Sciences Center medical mart. They hope to open it within five years.

The partners have a long way to go in acquiring land for the project. They are continuing negotiations with the city and state.

They may need twice as much land as originally sought, Mr. Swirnow has said. And they still don't know whether a city-owned block bounded by Camden, Paca, Pratt and Eutaw streets -- previously reserved for the U.S. Health Care Financing Administration -- would be available for medical mart expansion.

Despite such questions, city and state officials have welcomed Parkway's projects as a way to strengthen Baltimore and spark more foreign investment. They expect the medical mart to lure thousands of visitors to showrooms of medical equipment, and HarborView to trigger a residential revival and shore up the city's tax base.

"People from all over the world will know they can invest in the city of Baltimore and know they've made a good investment," Gov. William Donald Schaefer said as the first of six HarborView towers opened.

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