Agency relocating to Schaefer Tower


September 01, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

The state's Mass Transit Administration intends to relocate its headquarters to the 28-story Schaefer Tower downtown early next year, a move that will save the government hundreds of thousands of dollars in annual rent payments.

John A. Agro, the MTA's administrator, said the move also will save money by allowing the MTA to consolidate some operations.

"Anything we can do to operate more efficiently and in a less expensive manner is something that we're obviously sensitive to," he said.

The MTA is expected to save $584,220 annually in rent costs by relocating from 300 W. Lexington St., where it has operated since 1985. Roughly 350 employees will be affected by the move.

With 78,000 square feet, the MTA also will be the largest state agency at 6 St. Paul St., occupying nearly a quarter of the building after the February 1995 move. Had it expanded its present quarters to the same size at One Market Center, the MTA would have paid $1.3 million in rent annually.

The state office building at 6 St. Paul St., renamed William Donald Schaefer Tower this summer, also is home to the Maryland Public Service Commission and the Office of People's Counsel. In all, some 1,300 state workers now occupy the building, which as a privately owned building two years ago accounted for roughly 20 percent of all available Class A office space downtown.

The MTA's relocation to the 339,461-square-foot building underscores the state's efforts to and take advantage of the depressed downtown commercial real estate market. The state acquired the former Merritt Commercial Savings & Loan Association property in March 1993 for $12.2 million from lender Chemical Banking Corp. of New York. It has since invested $14 million in office improvements there.

Chemical took possession of the building in September 1991, after a New York development firm defaulted on its $43 million mortgage. The building was completed in 1985, for $38 million.

Since March 1993, the state has spent $18.3 million to acquire three downtown properties and saved taxpayers $15 million by renegotiating various lease commitments statewide. Total rent savings as a result of the purchases -- which include the five-story Shillman Building at 500 N. Calvert St. and a three-story building at 211 E. Madison St. -- is expected to top $50 million through 2008.

The MTA's move became possible earlier this year, when the state Department of Juvenile Services, which had planned to move to Schaefer Tower, was directed to relocate to a Martin Marietta Corp.-owned building in Middle River.

"This gives the MTA a premier address, and for us, they will move into virtually all the available space in 6 St. Paul," said Martin W. Walsh Jr., secretary of the state Department of General Services, the agency that oversees most of the government's real estate requirements.

The MTA will have a customer service center in the building's lobby, replacing a similar facility in One Market Center. "We still intend to be very customer friendly," Mr. Agro said. "One of the real benefits of 6 St. Paul is that we'll be able to set up a tickets office in the lobby to assist the elderly and handicapped."

But the move will severely hurt One Market Center, raising the vacancy level in the two-building, 193,000-square-foot property to roughly 50 percent. The 300 W. Lexington St. property is owned by Murdoch Development Co., an entity controlled by Dole Food Co. Chairman David H. Murdoch. Murdoch Development bought and renovated the building in August 1984 with a $15.85 million loan, according to city records. The MTA currently occupies 56,288 square feet in the project.

Neither Murdoch Development nor local leasing representatives involved with One Market Center could be reached for comment.

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