In one of the largest corporate shifts downtown in the past decade, Legg Mason Inc. is on the verge of inking a deal to relocate its headquarters to the USF&G Tower to consolidate operations and accommodate future growth.
The move to the 35-story signature skyscraper at the Inner Harbor would also avoid the loss of even a portion of the company's nearly 1,000 professional jobs in the city, at a time when Wall Street's explosion has fueled investment firms' growth and caused T. Rowe Price Associates Inc. to expand in Baltimore County.
For the city, however, the retention of a company with roots in Baltimore dating to 1899 will come at a price.
Tomorrow, the city's Board of Estimates is expected to approve a deal to purchase the company's former headquarters at 7 E. Redwood St. for $5.6 million.
Under payments stretching through 2017, though, the city's actual cost will total $14 million.
Baltimore, in turn, intends to invest $1 million from a state loan into the 20-story building and attract business and nonprofit agencies to downtown.
"It's a deal that makes good financial sense, keeps an expanding business downtown and gives the city a quality building that it can use to keep or attract other office tenants," said M. J. "Jay" Brodie, president of the Baltimore Development Corp., the city's economic development agency.
Brodie added that the purchase was justified because city taxes generated by Legg Mason's 963 downtown employees are expected to grow 28 percent, to $1.53 million annually, between next year and 2003.
Furthermore, Legg Mason is slated to grow to 1,367 employees downtown by 2003, Brodie stated in a letter sent late last week to the Board of Estimates.
In all, the 7 E. Redwood St. purchase is projected to provide the city with a 61 percent return on its investment.
By consolidating its work force from the 28-story, green-tinted Legg Mason Tower and 7 E. Redwood St., Legg Mason expects to generate increased efficiency and avoid further segmentation.
"The ability to consolidate had a big bearing on our decision," explained Raymond A. "Chip" Mason, the company's chairman, president and chief executive officer.
Room to grow
"The primary issue was that we're now in two locations and we would soon need to go to a third, in the county or somewhere, and this way we can all be together, be downtown and help the rebirth of downtown," Mason said.
