Downtown business on 'uptick' Economic momentum raises hopes for progress of city

Jobs recaptured

Project blueprints, economic activity increase optimism

June 23, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

After years of suffering from a business exodus, Baltimore's downtown appears poised to recapture lost white-collar jobs and the sense of economic momentum that has been absent throughout the 1990s.

The groundswell of activity, although preliminary in some cases, would bring hundreds of professional jobs downtown in the wake of corporate downsizings, bank consolidations, concerns over safety and a lack of economic development initiatives.

The influx of jobs, along with high-profile public projects such as the $150 million Convention Center expansion, entertainment-oriented ventures such as the $27 million conversion of the abandoned Fishmarket to a children's museum and Cordish Co.'s planned $18 million renovation of the derelict Power Plant, might even contribute to major new development.

Most notably, a Seattle lodging company is considering building a $100 million-plus luxury hotel downtown, the first time in a decade anyone has thought about adding new rooms.

"We believe downtown Baltimore is coming into its next significant phase of development and business activity," said Don Welsh, a Westin Hotels & Resorts vice president.

Among the many businesses negotiating to relocate downtown are the National Association for the Advancement of Colored People, McDonald's Corp. and Crestar Bank, all of which would fill empty office space and symbolically fill the void left by departed firms.

Combined, the NAACP's national headquarters, the regional operations of the fast food conglomerate and the Virginia-based bank would fill more than 100,000 square feet of office space -- enough to fill the entire 16-story One Calvert Plaza building on East Baltimore Street.

"We're not making the kind of statement we want to make at 1300 N. Charles St.," said William C. Harris, chairman of Crestar's Washington-Maryland region, of the former headquarters of Loyola Capital Corp., the thrift Crestar acquired at the beginning of the year. "My preference is to be downtown, because it makes more of a long-term statement about our philosophy."

Crestar is negotiating to relocate nearly 100 employees to three floors in a 25-story office tower at 120 E. Baltimore St., sources say. That space was vacated more than a year ago when First Fidelity Bancorp bought the Bank of Baltimore.

In the case of the NAACP, its board is balancing the cost of moving from the city-owned Seton Industrial Park to downtown to enhance its image, sources say.

NAACP officials declined to comment. Executives of McDonald's, which has been in Columbia since 1989 and is grappling with a lack of available parking downtown, would say only that a move is being contemplated.

Moves being planned

But many moves back to downtown already are taking shape. Within the past few weeks, headquarters relocation announcements by Fidelity & Guaranty Life Insurance and internal growth by Bell Atlantic Corp. have brightened what has been a stagnant office market. Those two corporate shifts alone will bring more than 220 jobs downtown by the end of the year.

For Bell Atlantic and others, downtown was selected because of amenities such as restaurants and hotels, the city's central location in the metro area, convenient access to highways and the Baltimore-Washington International Airport, and the so-called quality of life that the city affords, executives say.

"We're starting to see things changing, especially for downtown," said Daniel J. Whelan, president of Bell Atlantic/Maryland and a Federal Hill resident. "The governor and the mayor are creating a business-friendly environment, and we believe that when change starts, the business community needs to step forward."

The price of office space and its availability -- the very factors that have hurt downtown in the past 10 years -- appear now to be benefiting the city. While a decade ago suburban office space was considerably cheaper to rent than in the city, analysts say a cost equilibrium has developed.

And downtown, with a more than 15 percent vacancy level in even the highest quality skyscrapers, has space to fill at discounts that the suburbs do not.

In the case of First Maryland Bancorp, for instance, its decision to maintain 700 white-collar jobs downtown and stay in its 22-story headquarters through 2006 came with a more than $2 million annual cut in its rent payments.

"Part of it is certainly economics," said Mayor Kurt L. Schmoke, before Bell Atlantic's announcement. "There are some things we can't control, but others, like the perception of a good business environment, we can."

Schmoke and others also credit the Downtown Partnership, the quasi-public booster group whose work extends to safety and cleanliness, with aiding in economic development efforts.

Among those caught up in -- and by coincidence perpetuating -- that perception is Sylvan Learning Systems Inc., the Columbia-based educational services firm that intends to transplant its headquarters and 350 jobs in October to a new $12 million headquarters at Inner Harbor East.

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