City hopes to avoid late fees Alex. Brown unlikely to excuse tardy garage

December 18, 1997|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

One of downtown's biggest employers is rebuffing the city's effort to wriggle out of paying more than $200,000 in late fees for delaying the opening of a $9 million parking garage the city built to keep the company in Baltimore.

Mayor Kurt L. Schmoke wants BT Alex. Brown Inc. to let the city off the hook for the delays caused by the Department of Public Works in the construction of the seven-deck garage at Guilford Avenue and Baltimore Street.

"I am going to try to call them today," Schmoke said yesterday. "Obviously, we would like to negotiate."

A.B. "Buzzy" Krongard, Alex. Brown's chairman and chief executive officer, said he doesn't foresee forgiving the late fees.

"We had a deal, and I have not seen or heard anything that changes that deal," Krongard said.

The deal was that the city had to have the garage ready for 250 of the investment firm's employees by Aug. 1. Though the garage is still not complete, the city allowed Alex. Brown employees to begin using it Monday -- 4 1/2 months behind schedule.

Schmoke's efforts to renegotiate follow several gaffes by the city that caused repeated delays in completing the garage.

After the city promised to build the garage for Alex. Brown, which had been thinking about moving its headquarters out of the city, the garage plans were changed. The city's planning commission decided that the original proposal to build a 375-space, nine-level parking garage was a drain on city finances.

So the city enlarged the garage to a 510-space, seven-level garage. But to do so, the city had to condemn nearby buildings so that enough space could be made for the larger structure. The nearby eight-story INA building had to be demolished to make way.

Construction began in February, one month after the original date the garage was supposed to open.

"The garage was supposed to be ready on Jan. 1," Krongard said.

But the city then told Alex. Brown that the parking garage would be ready Aug. 1. By this time, Alex. Brown officials were doubtful that the city would live up to its word. So they put late fee penalties in the contract.

"Obviously there was skepticism and that is why we put in the penalty feature," Krongard said. "We were very, very generous by giving them until Aug. 1."

After the August date passed, the city said that the garage would be in place by Thanksgiving. The employees began parking at the garage Dec. 15.

Alex. Brown is to receive two free months for every month that the garage was behind schedule.

Alex. Brown has the option of taking a lump sum payment of about $200,000 or eight months of free rent.

The city is expected to complete the financial terms of the deal next month.

The city's effort to broker a new deal comes as the finishing touches on the $9 million garage are being made.

Schmoke would not say how he hoped to persuade Alex. Brown to forgive all or some of the debt the city owes.

Pub Date: 12/18/97

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