Alex. Brown weighing offer of rights to Power Plant

August 03, 1994|By Timothy J. Mullaney and Edward Gunts | Timothy J. Mullaney and Edward Gunts,Sun Staff Writers

An exasperated Schmoke administration has offered Alex. Brown Inc. the exclusive right to negotiate a redevelopment of the long-vacant Power Plant complex, breaking off talks with a group that wants to convert the Inner Harbor landmark into an interactive sports entertainment center.

The city's move comes after nearly two years of talks with Sports Center USA Inc., a venture led by Lynda O'Dea and other local business leaders, along with Capital Cities/ABC Inc.

Yesterday, Mayor Kurt L. Schmoke indicated that the city's patience with the group's inability to secure financing had run out.

"It's not as though I want to get into a public debate on this, but we really want to see something happen on that facility," the mayor said. "We really feel that we have been patient, and it's time to have something more concrete happen."

The offer to Alex. Brown, a venerable Baltimore investment banking firm that has said it may move from downtown when its lease runs out in 1997, would commit the city to talking only to Alex. Brown about the site for the next 60 days.

Late yesterday, Alex. Brown officials said they were uncertain whether they would accept the offer.

"We haven't made a decision yet," said Alex. Brown Chief Executive Officer A. B. "Buzzy" Krongard. "We'll make it tomorrow."

The hulking Power Plant, built in 1901, has been unused since 1990, when Six Flags Corp. closed its $40 million amusement center and nightclub there after five years of disappointing attendance and millions in losses.

The Sports Center, touted by Ms. O'Dea as "the Epcot Center of sports," was to bring the complex to life with sports-related virtual-reality machines, motion simulators, video highlights booths and big-screen movies, including software designed around specific stars, plus clinics and fantasy camps with celebrity athletes.

Talks with the city broke down after Sports Center failed to get its potential lenders to remove conditions and contingencies from the financing offer, Ms. O'Dea said.

Ms. O'Dea has refused to say who had offered to finance the $32.5 million project and declined to say what contingencies brought objections from officials of the Baltimore Development Corp.

Sports Center's exclusive negotiating authority, which was granted in August 1992 and extended last year, expired again July 31. Mr. Schmoke said Sports Center's negotiating rights were not extended because the developers did not meet all of the city's requirements by the deadline.

The mayor and his aides also made clear that keeping Alex. Brown in the city is a top priority.

The firm, which has been based downtown since its founding in 1800, occupies about 90,000 square feet in the Bank of Baltimore Building and has workers in at least four other buildings downtown, as well as space in Timonium.

Of its 2,200 employees nationwide, more than 800 work in downtown Baltimore, and about 400 are in Baltimore County offices.

The firm probably could not fit into the 106,000-square-foot Power Plant unless the building were extensively renovated, and real estate brokers and others say Alex. Brown would probably be able to renew its existing leases much more cheaply than moving to a new or renovated facility.

Nonetheless, Alex. Brown has expressed interest in the Power Plant, and the city wants to accommodate the firm.

"We will do what we have to do to keep Alex. Brown in the city," Housing Commissioner Daniel P. Henson III said.

Ms. O'Dea said her group expected the city to open talks with Alex. Brown, but she said she was surprised and upset that the city offered Alex. Brown even a temporary exclusive on the deal.

She said John Paterakis, the H&S Bakery owner who is part of the Sports Center group, met with the mayor two weeks ago and came away expecting the city to negotiate with both Sports Center and Alex. Brown.

"The city wants to continue discussions with us, but that's going to be very difficult if Alex. Brown has an exclusive," she said.

Ms. O'Dea said Sports Center could have trouble holding together its alliances with athletes, companies whose products are endorsed by celebrity athletes and others whom the venture plans to work with if the city completely cuts off negotiations in favor of Alex. Brown.

"Even if you're talking about 60 to 90 days, it's very difficult," she said. She said other cities have approached her group about developing a center like the one she plans for Baltimore.

Ms. O'Dea said the newness of the interactive entertainment concept is the biggest reason why Sports Center has had trouble getting financing.

"The fact that it's a new concept and a new technology makes a start-up even more challenging," she said.

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