Health care provider plans headquarters in city Candler Building lease could mean 330 jobs

October 25, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

In what would be one of the largest office leases downtown in a decade, Sierra Military Health Services Inc. intends to establish a regional headquarters with roughly 330 employees in the 12-story Candler Building by January.

Under terms of a letter of intent between the Candler Building's owner and Sierra, the health care provider will lease 83,000 square feet -- or 16 percent of the building -- through 2008.

Sierra's lease, expected to be signed next week, is valued at roughly $12.5 million. However, part of that cost will be offset by $500,000 in incentives from the city's economic development agency for job training, wage tax credits and an office improvement loan that could be converted to a grant if Sierra meets certain goals for hiring city residents.

"It's a great statement about the attractiveness of the City of Baltimore," said Bruce Lane, a principal of the Meridian Group Inc., a Washington real estate investment firm that bought the Candler Building for $21.8 million in August 1996.

The regional headquarters -- also one of the largest corporate moves to Baltimore in a decade -- stems from a $1.2 billion contract the Las Vegas, Nev.-based company won this month to coordinate health care for more than 600,000 military dependents from Maine to Virginia.

The next largest corporate relocation from outside the state to Baltimore in recent years came in November 1995, when Treasure Chest Advertising Inc. moved from Los Angeles to the 26-story 250 W. Pratt St. building.

Sierra officials said this month it selected Baltimore because it is close to the Pentagon and central to the 13-state region Sierra will serve as part of the contract. Sierra officials locally and in Nevada declined to comment on the status of its lease negotiations.

As part of the regional operation, Sierra intends to create a 24-hour telecommunications center for clients, a key factor in the selection of the Candler Building over another finalist, the 22-story One Charles Center. Those office buildings are the only two downtown with enough space to accommodate Sierra's space requirement.

Unlike One Charles and many other downtown office buildings, the 535,000-square-foot Candler Building is uniquely equipped for such call centers because of its large floor space.

Candler's floors are so large because the building was once a Coca-Cola Co. warehouse. General Electric Co. converted the building to office space at a cost of $40 million in the mid-1980s.

Sierra will bring the occupancy level at the 111 Market Place building to 94 percent, said David Downey, a principal and vice president at Colliers Pinkard, the Baltimore real estate firm that leases the building for Meridian.

When Meridian acquired the 86-year-old building, its occupancy level stood at 68 percent.

In February, Meridian lost out to Woodlawn in a battle to land a 120,000-square-foot deal with United Healthcare Inc., a Minneapolis health care firm that also was searching for a location to consolidate customer service operations from two area locations.

That deal also would have brought about 300 jobs downtown.

Sierra's imminent move "says the building has a great location, it's a great value and a high-quality project," Lane said. "We're obviously very pleased."

Pub Date: 10/25/97

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