Tower developers near deal Tentative pact signed with Embassy Suites owner for hotel floors

Commercial real estate

March 06, 1998|By Edward Gunts | Edward Gunts,SUN STAFF

The developers who plan to build a $100 million office and hotel tower in place of the former Southern Hotel in downtown Baltimore have a tentative agreement to sell the hotel portion to a Dallas-based real estate investment trust as soon as construction is complete.

FelCor Suite Hotels Inc., the largest owner of Embassy Suites hotels, is the prospective buyer of the 267-suite hotel that would occupy floors 11 to 18 of the 34-story building known as One Light Street.

Developer J. Joseph Clarke said yesterday that FelCor was scheduled to sign an agreement this month that would give it the right to purchase the hotel for an undisclosed price from the development team, headed by an affiliate of Capital Guidance Corp. of Geneva.

He said the sale agreement is a key part of Capital Guidance's plan to finance construction of the tower, which would be one of the tallest in downtown Baltimore.

The hotel is also an amenity that would help draw office tenants to the building while addressing the need for an all-suites hotel downtown, he said.

"This is a real mixed-use project -- half office, half hotel," he said.

"Our market studies indicate that there is a strong demand for a business-oriented, all-suites hotel downtown. We intend to sign a deal which will allow FelCor to buy everything in the place. That means the linens, the glassware and everything else. The hotel will form an anchor tenant and represent 40 percent of the cost of the deal."

Clarke, who heads J. J. Clarke Enterprises and is working with Capital Guidance, disclosed details of the hotel "pre-sale" during a presentation yesterday to Baltimore's Architectural Review Board, which scrutinizes plans for construction downtown.

He also unveiled preliminary plans that indicate the building will be a slender glass tower, with curving east and west facades and setbacks on the 11th and 32nd floors that would give it a distinctive silhouette.

Designed by Peter Fillat Architects of Baltimore to rise 400 to 440 feet in the block bounded by Light, Baltimore, Grant and Redwood streets, the building would be slightly shorter than the NationsBank tower at 10 Light Street, and a visual companion to it on the skyline.

Besides the hotel, the building would have 18,000 square feet of retail space at street level; a 660-car garage on levels two through nine; one level of meeting rooms, including a ballroom; and 340,000 square feet of office space on the top 13 floors. The main entry would be off Light Street. One of the building's most unusual features is a three-story-high "sky window" midway up the south side -- designed to let natural light filter into an eight-story atrium surrounded by hotel rooms.

All-suites hotels in the suburbs typically contain central atriums with skylights, said architect Peter Fillat. Since this one cannot have a skylight because there will be office floors above, the skywindow was created to let in light and add interest to the central space, he said.

Fillat also said the developers will attempt to incorporate fragments of the 1914 Southern Hotel into the lobby of the new building, including terra cotta swags and bas relief panels visible on the exterior.

The vacant hotel is an official city landmark, but Baltimore's preservation commission previously agreed to let it be razed for a replacement project that never materialized. Clarke said Capital Guidance expects the preservation commission to reissue a demolition permit for the Southern Hotel.

In all, six buildings in one block would have to be torn down to make way for the proposed tower. Five were assembled by Capital Guidance in the 1980s, and tenants are aware they may have to vacate on short notice to make way for construction, Clarke said.

The sixth building is the Thomas building at 101 E. Baltimore St., which is owned and occupied by McDonald's Corp. Capital Guidance plans to buy the building from McDonald's and has agreed to allow McDonald's to buy and occupy space at the base of One Light Street, Clarke said.

Clarke said hotel suites at One Light Street will cost $130 to $135 per night, and office space will lease for about $25 per square foot. He said the developers do not have any office tenants signed up but plan to select a leasing team and launch a marketing effort in the near future. The typical office floor plate has about 30,000 square feet of space.

The group is seeking financial assistance from the city, including the sale of parking revenue bonds to pay for garage construction and permission to make a fixed "payment in lieu of taxes" for the first 10 years of the building's operation. It still needs approval from Baltimore's Board of Municipal and Zoning Appeals.

Clarke said the development team hopes to firm up its financing in time to begin clearing the site this year and start construction in early 1999. Under that schedule, he said, the building would open late in 2000.

Pub Date: 3/06/98

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