Baltimore's business district struggling Downtown group cites vacancies, decay

December 09, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Against a backdrop of recent optimism about downtown Baltimore, a prominent business group said yesterday that the central business district is seriously threatened by physical decay, soaring office vacancies and lack of investment.

The report, by the Downtown Partnership of Baltimore, highlights the growing number of empty offices in downtown's older, "Class B" buildings. It arrives as city leaders increasingly are talking about demolishing more of those buildings to make room for development.

The paper, from a group traditionally known for emphasizing downtown's positives, draws a sharp contrast between the thriving area immediately around the Inner Harbor and the lagging central business district north of Lombard Street.

"The long-term survival of the traditional and historic central business district is threatened by physical deterioration and lack of investment," the report says.

The paper calls the disparity between metropolitan Baltimore's suburban and urban office markets "among the worst in the nation" and prescribes new public and private spending to bring the business district up to Inner Harbor standards.

The controversial idea of accelerating the destruction of Class B office structures isn't specifically mentioned in the report, which calls for more parking space, residential, retail and entertainment venues in the central business district. But demolition is clearly near the top of the list of mulled remedies.

"We have come to realize that there are buildings that may never be reused and that we need to take them and demolish them to provide sites for other development," said Harold Adams, chairman of architecture firm RTKL Associates as well as chairman of the Downtown Partnership.

"Tearing down some buildings, having some clean sites, will encourage people to say, 'Gee, that's a place to build whatever.' "

Dissenting view

The partnership's report drew dissent from the Baltimore Development Corp., a public/private group that is the city's main economic development arm.

"I thought they were a little hard on themselves and a little hard on the situation in general," said BDC President M. J. "Jay" Brodie.

"My own view is that the glass is half-full and not half-empty, and that the water in the glass is clearly rising," he said.

Brodie pointed to efforts to increase downtown parking, convert old office buildings into apartment complexes and improve business district streetscapes as examples of improvement.

He, too, emphasized the need for demolition. "There will be some demolition," he said. "To think otherwise would be an illusion. If we could save three-fourths of Redwood Street by tearing down one-fourth and providing parking, that's a choice I would make."

Preservationists urged that other options be exhausted before allowing the wrecking balls to swing.

"We are not at all interested in seeing demolition where it is not, absolutely, 100 percent necessary," said Tim Bishop, first vice president of Baltimore Heritage, a preservation group. "Even buildings that are not of the highest significance we find worthy of preservation."

The report appears as downtown overall is at its most vibrant in years.

Three developers are vying to build a major luxury hotel somewhere near the harbor. A stadium for the Baltimore Ravens is rising on the harbor's west side. A convention center expansion just started operating. Last month, 100 E. Pratt St., a building near the water, sold for a $137 million, a record price for a single Baltimore office building.

And an improving economy has helped drive vacancies in newer, "Class A," harbor-front offices down to 5 percent, as major tenants such as financial concerns Legg Mason and T. Rowe Price have made new commitments.

25 percent vacancies

Meanwhile, Class B vacancies downtown have soared past 25 percent, partly as a result of the harbor-front's success. Many of the Class A tenants have migrated from older buildings a few blocks uptown. For example, Legg Mason vacated more than 100,000 square feet at 7 E. Redwood St. and moved those operations into the former USF&G building on the harbor.

While $900 million is being invested in various projects in the Inner Harbor and University Center, only $72 million is aimed at the central business district, according to the partnership's report.

The result is that "it appears as though we have our own 'Tale of Two Downtowns,' " Downtown Partnership President Laurie Schwartz said in a speech to city leaders yesterday. "Pratt Street may have the high buildings and high occupancy, but it's the financial district, with its high vacancies, that's casting the shadow on downtown's future."

Central business district office trends also clash with those in Baltimore's suburbs, where vacancies have fallen to around 10 percent, in contrast with downtown's overall 20 percent vacancy rate.

That contrasts with Portland, Ore., San Francisco and Boston, the partnership's report said, where vacancies are similarly low in suburbs and urban cores.

Baltimore is in better shape, however, than metro areas such as Los Angeles and Hartford, Conn., where vacancies are near 20 percent in both suburbs and city.

And David Gillece, a vice president with Colliers Pinkard, which manages downtown real estate, said, "I think we're going to see some strength in the Class B market" of downtown, now that Class A is almost full.

Schwartz called for increased investment in safety, parking and streetscape cosmetics such as brickwork on sidewalks and landscaping.

The city needs to do a better job of cultivating downtown-friendly industries such as education, printing, finance, real estate and utilities, the partnership's report said, and it should develop a master plan for the area's development.

"We're not trying to sound like doom and gloom," Schwartz said. "It's a situation that needs jump-starting."

Pub Date: 12/09/97

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