Area humming a money melody Construction rises as interest rates dip

January 24, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Commercial construction began to take off around Baltimore during November, and housing construction turned up sharply in response to lower interest rates, the Baltimore Metropolitan Council said yesterday.

Developers in metropolitan Baltimore took out permits during November for $64.8 million of new commercial construction, the council said, up from less than $10 million in November 1994. And the value of commercial additions, alterations and repairs exploded to $221 million, up from $33 million in the same month a year earlier.

In the housing market, permits for single-family homes and townhouses rose 20 percent, cutting 1995's year-long loss to 9.5 percent after big dips early in the year.

The market was held back early in the year due to a residue of high mortgage rates from 1995, but it has been more healthy in recent months, the council said.

Building permits are one of 11 components of the federal government's index of leading economic indicators, which economists use to project the business outlook for six to nine months into the future.

"Basically we're humming," said Michael A. Conte, director of the University of Baltimore's Regional Economic Studies Program. "We're seeing sort of the first confluence of good news across sectors -- both residential and commercial, both new construction and additions and alterations."

The figures mostly reflected projects that had been unveiled earlier, with the issuance of permits showing the deals moving closer to fruition.

The biggest permit in Baltimore was for the $151 million addition to the Convention Center. Other leading projects that won their permits were a 121-unit, $20 million apartment complex and the $23 million headquarters building for Sylvan Learning Systems Inc., both at Inner Harbor East.

Baltimore also granted a permit for the $20 million environmental cleanup of the old Allied Signal plant site, which is near the harborside mixed-use development.

"This type of work is consistent with the general trend, which is that public-related types of jobs are a major factor these days," said Joseph Cronyn, vice president of Legg Mason Realty Group Inc. in Baltimore.

"The Convention Center is obviously one of them. And Inner Harbor East, there's a significant amount of public investment and public marketing that went into that," he added. "Publicly related jobs are things that in this era of slow economic growth in the Baltimore region have a higher likelihood of being able to come off."

In the suburbs, retailers accounted for a big part of November's construction boomlet. The largest permits approved in Anne Arundel County were for retail projects, including deals that are part of Target stores' expansion into the area.

Harford County's biggest permit was for a school-renovation project, Baltimore County's was for a $3 million project at Villa Julie College. But in both counties, the next-biggest projects were retail stores. Carroll County's biggest project was a $3.5 million supermarket center in Eldersburg that will be anchored by a Giant Food store.

"There's still, through the rest of this year, going to be substantial development for value-oriented retailers coming into the area," Mr. Cronyn said. "Target is only the most recent example. The trend has been going on for three to four years."

But that trend so far has stopped well short of bringing the construction industry, which accounted for nearly 6 percent of Maryland jobs before the 1990 recession, back to its cyclical highs.

About 130,300 Marylanders worked in construction during November, said Marco Merrick, a spokesman for the state Department of Labor, Licensing and Regulation.

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