City's problems and opportunities

January 03, 1994

Two news developments occurred late last year that illustrated Baltimore City's problems and opportunities.

The sale of the 26-story office tower at 250 West Pratt Street -- one of the most aesthetically pleasing structures downtown -- established a new low watermark in declining commercial real estate prices. The building that carried a $56 million mortgage changed hands for just over $22 million.

Such a dramatic drop in valuation will be reflected in lowered tax assessments, which in turn will mean less revenue for the city. Already, Baltimore is facing a $3 million budget shortfall because of lower-than-expected property tax revenues from public utilities and downtown office buildings.

This is a problem that will be only deepened when residential real estate is reassessed. Many city neighborhoods -- particularly older areas -- have experienced a dramatic drop in prices. Owners will be asking for lower tax assessments.

The decision by Waverly Inc. to remain in the city illustrates the opportunities.

After searching for a new headquarters site near the Baltimore-Washington International Airport and at other locations in the metropolitan area, the leading publisher of medical journals became the first private sector tenant -- aside from the Orioles -- to locate at the renovated warehouse overlooking the baseball stadium at Camden Yards.

Ironically, that site -- next to a MARC commuter train station to Washington, a light-rail stop and an Interstate highway ramp -- is just a few hundred yards from 250 West Pratt Street.

With the current half-a-billion dollar investment the state is putting into constructing new facilities at the nearby University of Maryland at Baltimore, the whole area is ripe for a takeoff. This was confirmed when the owners of a building adjoining the new City Crescent federal complex decided to renovate their property for office use. Howard Street lost its only girlie bar but is gaining visibility.

Which brings us to Mayor Kurt L. Schmoke's economic incentives task force and its recommendations.

Baltimore desperately needs more aggressive economic development efforts. Retention of existing businesses -- and providing them opportunities to expand -- is particularly important. It is equally important to streamline the city's project approval process.

The existing process is too cumbersome and time-consuming. As a result, Baltimore has needlessly lost opportunities to neighboring jurisdictions -- particularly Harford County, whose quick approvals are the stuff that business dreams are made of.

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