In a nearly unprecedented economic development initiative, Baltimore has proposed constructing a major office building and parking garage for Aegon USA adjacent to its North Charles Street headquarters, a move aimed at retaining hundreds of jobs and attracting hundreds more.
The projected $30 million proposal from the city's economic development agency comes as the Baltimore-based life insurer is preparing to add as many as 300 jobs to the region over the next two years, in the wake of a $3.5 billion purchase of a Kentucky insurer in June by Aegon USA's Dutch parent company.
But, despite having 800 employees and a 71-year history in Mount Vernon, Aegon USA is considering moving a bulk or all of the new employees to Hunt Valley, sources said, setting the stage for the latest in a series of economic development battles between the city and Baltimore County.
Aegon USA's potential shift of even a few hundred jobs to the suburbs worries city officials not only because of its psychological impact, but also because corporate defections typically occur in small increments over time, as was the case with CSX Corp.'s decision several years ago to relocate its headquarters to Jacksonville, Fla.
"We're evaluating several locations both in and out of the city," said Bart Herbert Jr., an Aegon USA executive vice president. "The major factor in our decision, which we expect to make shortly, will be the impact on our employees."
Aegon USA executives declined to comment further. But sources said the company could make its decision as early as next week.
Under the city proposal, the Baltimore Development Corp. would either finance outright or provide tax breaks and other incentives for the construction of a 150,000-square-foot office tower -- roughly equivalent in size to the 11-story Inner Harbor Center at 400 E. Pratt St. -- and a 500-space parking garage at 1111 N. Charles St.
In exchange, the city is seeking a 15-year pledge from Aegon USA that the company would maintain its employment base and consolidate new employees into its expanded North Charles Street facility, said BDC President M. J. "Jay" Brodie.
"The concept we've proposed is in front of them," Brodie said. "And we're aware they are looking at other buildings. But our main desire is for them to keep a major presence here and expand in the city."
The BDC plan is one of three Aegon USA is considering, sources said. In addition, the company is focusing on the 22-story One Charles Center building owned by attorney Peter G. Angelos, one of the few buildings in the city with enough available space to accommodate large space requirements.
In Hunt Valley, Aegon USA is in discussions with AAI Corp. to lease space in the defense contractor's 180,000-square-foot headquarters, which has been on the market for the past year. It could not be determined what, if any, economic incentives Baltimore County is offering Aegon USA, and county economic development officials could not be reached for comment.
But the BDC's aggressive plan to keep the nation's ninth-largest insurer headquartered downtown may be hurt by crime and grime, sources said. Aegon USA executives have been complaining to the city for years about safety problems and the cleanliness of the 1100 block of North Charles Street.
"There are problems in the area, and, while I think everyone would agree we must remain diligent, I believe everyone would also agree that there has been improvement there," said Brodie, who added that city officials have been meeting with Aegon USA for more than a year and a half.
If the subsidiary of a giant Dutch insurer with $130 billion in assets worldwide agrees to the BDC plan, city officials hope that the company's expanded presence -- along with a growing University of Baltimore -- would help stabilize and restore a decaying business climate in and around Mount Vernon.
"It would help bring momentum," said Roger C. Lipitz, BDC's chairman. "And we've really been struggling with how to deal with that area. If it works, it would produce a lot of revenue to the city, because these types of investments give the city the best economic and social returns."
"Any Aegon expansion would make a wonderful addition to the area," said H. Mebane Turner, president of the University of Baltimore. "It certainly wouldn't do the area any good if they left."
Pub Date: 12/10/97