Schmoke did not try to stop move from downtown

January 21, 1995|By JoAnna Daemmrich | JoAnna Daemmrich,Sun Staff Writer

Mayor Kurt L. Schmoke knew for two years that USF&G might abandon its landmark tower in downtown Baltimore, but decided early on that it was inevitable and made no move to keep the insurance giant at the Inner Harbor.

From his first meeting with USF&G Chairman and Chief Executive Norman P. Blake, Mr. Schmoke said he recognized that the company had little choice but to consolidate offices and focused his efforts instead on keeping the insurer in Baltimore.

The mayor said yesterday that he did not believe that the city could offer any incentives to prevent USF&G from moving its headquarters to Mount Washington. But some executives and elected officials criticized the Schmoke administration and the city's economic development agency -- which was caught off guard by USF&G's announcement Thursday -- for failing to do more to keep the company's 767 workers downtown.

Del. Howard P. Rawlings, a Baltimore Democrat, said legislative leaders should have been told that USF&G was considering a move, which he called "a potential catastrophe."

"One of the shortcomings of local economic development is that we are usually brought in after the fact," he said.

Mayor Schmoke said he met with top company officials during the past two years to encourage USF&G to remain in Maryland, but did not call in state or local economic development officials.

"It was not like some of the other companies that we have dealt with where they were trying to decide whether to stay in the city or not," he said. "It was far more an internal company move to improve its efficiency. At no time did they suggest there was something the city could do to alter the economics of the situation."

Because he decided the company's move from downtown was of "secondary concern" to leaving the state, the mayor did not ask the Baltimore Development Corp., the quasi-public economic development agency, to become involved.

"We have had no contact with USF&G about this issue," said Robert Hannon, BDC's executive vice president. "They absolutely did not come to us. Obviously, it's not only a surprise but a disappointment for the downtown."

His last contact with the insurance company was an informal meeting with Ray Celli, USF&G's director of real estate services, May. They discussed the issue of having corporate offices downtown and at the company's Mount Washington campus.

Nevertheless, Mr. Hannon said, he did not conclude that the company intended to leave its flagship office tower, which helped kindle the Inner Harbor renaissance.

"We were not asked about any incentives," he said.

Officials at the state Department of Economic and Employment Development also said they had no warning of USF&G's plans to move to the company's Mount Washington Center, which straddles the Baltimore city and county line.

"Obviously, we were aware of the downsizing," said Marilyn J. ZTC Corbett, an agency spokeswoman. "But we first learned of their planned move to Mount Washington when we got a call from a reporter at The Sun."

Delegate Rawlings said, "I'm not going to point at anyone. I could say it is a problem of the City Council, or a problem of the mayor's office or a problem of local government.

"The immediate question is whether there will be a ripple effect," he said.

Some executives who have dealt with the BDC, and senior officials of civic and business groups, pointed to a recent article in The Sun that indicated the agency is unresponsive and often doesn't understand what businesses need to stay in the city.

City Council President Mary Pat Clarke echoed the opinions of those interviewed -- most of whom asked not to be named -- when she said, "I just think we should be ahead of the curve on these issues. At this point, the BDC is a bureaucracy. Its client is the mayor."

But Mayor Schmoke strongly defended the agency.

Mr. Blake said the mayor could have done little to prevent USF&G from consolidating its headquarters. "The cost is so compelling, I don't know how, in fairness to them, they could have."

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