Aegon USA will remain downtown Company to move into vacant building at 205 W. Centre St.

Five-year commitment

City takes comfort in news after USF&G purchase

January 24, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Aegon USA yesterday told employees that it will remain and expand in downtown Baltimore through 2002, but the company left open the possibility it might consolidate more than 1,000 workers outside Baltimore because of changes taking place in the insurance industry.

In committing to the city, the nation's ninth-largest insurer will expand into a vacant, six-story office and warehouse building at 205 W. Centre St. once occupied by retailer Hochschild, Kohn & Co. and the Bank of Baltimore.

As part of the move, the North American subsidiary of giant Dutch insurer Aegon N. V. will shift 300 employees in its Special Markets Group to the 225,000-square-foot building by May. "Our new office location provides us with the much-needed space to accommodate our current business as well as our future growth," said Bart Herbert Jr., president of Aegon USA's Special Markets Group, who broke the news to employees at the Belvedere Hotel yesterday morning.

That group, at Aegon USA's headquarters at 1111 N. Charles St., will move to make room for 300 new employees scheduled to come to Baltimore in March, the result of its parent company's $3.5 billion purchase of a Kentucky insurer last year.

For economic development officials, Aegon USA's decision comes as welcome news after the purchase announced earlier this week of USF&G Corp. by a Minnesota company, an acquisition likely to cost the region hundreds of jobs.

"They're taking a conservative position at this point because of all the changes in the insurance industry because the Aegon of today is not the same as it was five years ago, and isn't expected to be the same five years from now, so it's understandable," M. J. "Jay" Brodie, president of the Baltimore Development Corp., the city's economic development arm, said of Aegon USA.

"And with USF&G being bought," he added, "in Aegon we're seeing the flip side of that coin. So it's an important and positive decision as we see it."

But Aegon USA's loyalty to the city -- the company had considered Hunt Valley as an expansion site -- came at a price of more than $1 million, the amount that the city and the state are offering in financial incentives.

In sub-leasing the building -- and 150 indoor parking spaces -- from First Union Corp. for five years, Aegon USA rejected an unprecedented offer from the city to construct a $30 million, 150,000-square-foot building and 500-space parking garage adjacent to Aegon USA's existing offices, where it employs 800. Aegon USA rejected the offer because the city had sought a 15-year commitment, Brodie said.

Aegon USA is expected to spend roughly $5.5 million to lease the 205 W. Centre St. building, part of the Harry & Jeanette Weinberg Foundation's $1.5 billion in real estate holdings.

"The large floor plate of the building will allow them to be much more efficient, the building has parking, and it will be much less disruptive to their employees because they're already accustomed to coming downtown," said David J. Downey, a principal of Colliers Pinkard, the real estate firm that represented Aegon in its search.

But in committing for only five years, Aegon USA left its options open. Herbert told employees yesterday that any future consolidation would be largely contingent upon industry trends. Aegon USA officials declined to comment on future moves.

Aegon USA's move to 205 W. Centre comes as the area around Park Avenue and Centre Street is rebounding slightly, after years of decay and business losses.

Across the street from the former Hochschild, Kohn building stands the former Greyhound bus terminal occupied by the Baltimore Metropolitan Council.

On another corner, Southern Management Co. is refurbishing Centre Towers, an empty 21-story apartment building.

But signs of blight and decay remain visible. Just to the west of 205 W. Centre stands a burned-out, four-story building at 506 Park Ave., occupied only by debris and surrounded by a chain-link fence.

"We're hoping [Aegon will] be an additional anchor there," Brodie said.

Pub Date: 1/24/98

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