Glitz unlikely to replace seedy strip

January 16, 1994|By Jacques Kelly | Jacques Kelly,Staff Writer

Sleek office buildings, chic restaurants and glittering retail shops won't quickly displace The Block's seedy businesses, say real estate executives familiar with the area.

"Downtown values are basically shot," said Richard Alter, president of the Manekin Corp. "They have gone bare. The downtown market is so depressed that people are hard pressed to give property away." His real estate company owns a large portion of the 200 block of E. Baltimore St., near The Block.

Commercial real estate executives have plenty of reasons for gloom these days. High vacancy rates have pushed down the value of office buildings, hotels and other major projects. And to lure tenants, landlords have slashed rents -- the average office rent in the Baltimore region has fallen to 1985 levels.

Mr. Alter said the presence of the adult-entertainment district also has hampered leasing at Commerce Place, a 30-story, $90 million office building at the southeast corner of Baltimore and South streets.

"Through fact or rumor, deals may have broken down because of people's perceptions of the long-term outlook of a neighborhood," he said. "A building like Commerce Place is too close to gaudy neon signs, offensive window treatments and bars' open doors. It makes it hard to attract a high-quality tenant."

But commercial real estate appraiser C. Gordon Gilbert Jr. questioned whether Block business owners should have their property condemned or be put out of business through zoning restrictions.

"There is a basic unfairness when large outside real estate developers come in and put up high-rise office buildings that sit vacant," he said. "They then cry foul about The Block being there. These people knew where they were when they were locating buildings in a certain spot."

Mr. Gilbert said developers are to blame for misjudging the market. "In the relative scheme of things, the buildings with unrented offices like the Merritt Tower [6 St. Paul St.] and Commerce Place are the ones that don't belong."

Most commercial developers have not tried to break into The Block. In recent years, only Commerce Place and a city office building have intruded on the district.

"No one in their right mind would put a new office building on East Baltimore Street," Mr. Gilbert said. "Are restaurants going to discover this real estate? I don't think so. There's not even a market for parking. Monthly contracts for parking are falling in value."

The Block should not be tampered with, Mr. Gilbert said.

"There is real estate value on The Block as it now is," he said. "Why tear down or change buildings capable of producing significant income? The businesses that are paying real estate taxes do not deserve extinction until there is a higher and better use for the land . . .

"The Block is like a tube of toothpaste. If you push prostitution, liquor and pornography out, it will go elsewhere. Why not continue to license it and tax it? It sits right by Police Department headquarters. What better eye could you have? It brings life to Baltimore Street from 5 p.m. to 2 a.m."

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