Sun scraps plans to sell Calvert Street building Company says talks with Dome continue on alternatives

October 22, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Baltimore Sun Co. has scrapped plans to sell the newspaper's North Calvert Street offices to a real estate affiliate of the Johns Hopkins Institutions, according to a company memorandum issued yesterday.

The decision to end negotiations on the deal -- in which the Sun Co. would have sold its property to Dome Corp. for $10 million and then leased space from it after a lengthy $10 million renovation -- stems from an ownership change involving the six-story 501 N. Calvert St. building and a 650-space parking garage next door.

In August, Times Mirror Co. transferred its real estate holdings to a new company formed with the Chandler Trusts, the Los Angeles-based corporation's largest shareholders. Times Mirror is the parent company of The Baltimore Sun Co.

As a result, the Sun Co. "is no longer in a position to sell the properties to Dome," the memo said. Times Mirror will lease the North Calvert Street buildings for 12 years from the new company.

"It was a great idea and a lot of people worked hard to make it happen," said Mary E. Junck, former publisher and chief executive of The Sun, who was promoted last month to president of Times Mirror's Eastern newspaper group. "It just didn't work out, because Times Mirror's decision changed the nature of the deal."

Under terms of their September 1996 agreement, the Sun Co. planned to sell its offices to Dome and then lease roughly a third of its building back through 2011.

Dome had planned an ambitious renovation, including installing ground-floor retail space, new elevators, heating and air-conditioning equipment and upgrades to each floor of the 501 N. Calvert St. building.

But sources said complications ranging from asbestos mitigation to the cost of renovations to the 440,000-square-foot building pushed the cost of the project up considerably and delayed the deal's closing, which had been expected in January.

Lester R. Conley, president of Dome's real estate operations, declined to comment.

Howard Weinstein, a Sun Co. vice president, said the two sides continue to discuss alternatives, including a deal in which Dome would sublease space from the new joint Times Mirror/Chandler Trusts' company.

Junck said, "We wanted to get the building refurbished in 1997, but now we anticipate getting this on the docket in 1998. It needs to get done."

Pub Date: 10/22/97

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