Sylvan close to deal to move downtown

March 03, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Sylvan Learning Systems Inc. is close to an agreement with the developers of the planned Inner Harbor East project to move the company's swelling headquarters and more than 250 jobs downtown from Columbia.

The move to the planned $350 million project south of Little Italy would provide the city with a much-needed economic development boost, on the heels of decisions by other companies to leave downtown.

USF&G Corp. recently announced it would move out of its downtown tower and relocate to its 72-acre campus in Mount Washington.

"There are still a couple of key issues that need to be resolved, but they are resolvable issues," said Sylvan President Douglas L. Becker. "Our preference at this point would be to relocate to Inner Harbor East, though, because we think it would be an ideal location for us."

Sylvan's urban relocation would also represent the largest influx of professional jobs to Baltimore in more than three years. Based on past growth, Mr. Becker estimates the nation's largest tutoring firm could have roughly 350 employees by the time a move to the city would take place.

Sylvan, which doubled its revenues between 1993 and 1994 to nearly $40 million, is obligated to its current Columbia headquarters through March 1996.

Mr. Becker told The Sun in November that the 4-year-old company was considering a move downtown to heighten the company's visibility and image, and also because he hopes to establish Baltimore as a nationally recognized education center.

If Sylvan does commit to the 20-acre project, Inner Harbor East's owners intend to develop a six-story building there, the first new commercial office building to begin construction downtown since 1989.

Sylvan is currently negotiating to sign a long-term lease for 55 percent of the 110,000-square-foot building, said Mr. Becker, a city resident who is also chairman of the city's planned $30 million children's museum slated to occupy both the Brokerage and Fishmarket complexes.

Mr. Becker and others said a commitment from the company for space in the $12 million building could be reached as early as June.

"We're on the 20-yard line at this point," said Michael E. Culbert, ,, vice president of Gilbane Properties Inc., a Rhode Island-based firm that is developing Inner Harbor East together with H&S Bakery Inc. owner John Paterakis. "They seem generally favorably disposed to our location, but a move would result in higher occupancy costs for them, and it's something they're concerned with."

In all, Inner Harbor East is planned to contain 800 residences, 600,000 square feet of office space and a 325-room hotel. Thus far, the project contains a 200-slip marina, and construction is proceeding on a restaurant scheduled to open in July. The developers also plan to begin work on a $12 million, 116-unit apartment complex this year.

Because Sylvan's rental and related costs downtown would be significantly higher than in Howard County, both the Baltimore Development Corp. and state's Department of Economic and Employment Development have been working with the company and the developer to provide financial assistance.

The agencies are studying ways to alleviate expenses that would affect Sylvan's rent, said Michele Whelley, a BDC executive vice president. A lease for 60,000 square feet in the Inner Harbor East building would cost Sylvan in excess of $1.2 million annually.

One major expense would be parking, a dramatic change from the free parking Sylvan currently enjoys in Howard County. Sylvan would require at least 150 parking spaces, said Ira J. Miller, a Miller Corporate Real Estate Services vice president representing the company.

"These are the same challenges we face whenever we try to get a company downtown that has grown up in the suburbs," Ms. Whelley said.

And although Inner Harbor East lies within the city's designated Empowerment Zone -- an area slated to receive $100 million from the federal government for economic rehabilitation -- it is unlikely Sylvan will be able to take advantage of the zone's tax breaks, Ms. Whelley added.

"We want to help the city," Mr. Becker said. "If just a couple of companies looked at being part of the solution, we could turn things around."

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