Munsey Building may be turned into apartments

Developer also plans shops on lower floors, and basement parking

Meeting a need downtown

Commercial real estate

October 09, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

A Rockville developer plans to purchase the vacant Munsey Building downtown and convert the 18-story building into 126 apartments and lofts beginning early next year.

Developer Richard Brinker Sr.'s plan also includes as many as 120 parking spaces in the basement and retail and commercial uses on the first three floors of the 85-year-old building at 7 N. Calvert St.

The $20 million conversion would take about a year, Brinker said.

"Market studies that we've conducted show that [residential] vacancies downtown are almost zero," said Brinker, who has developed more than 12,000 apartments since 1960. "And, with various tax-abatement programs that the city has, and state and federal tax credits, it makes it feasible to do a project there."

Brinker's plan marks the latest in a series of attempts to convert the Munsey Building to multifamily housing.

In January 1997, the former Legg Mason Realty Group determined that it would cost $13.5 million to convert the Munsey Building into 138 apartments. Of the total estimated cost, $5.5 million would have been derived from a combination of property tax abatements, tax-exempt financing and housing tax credits.

Brinker said that he, too, would apply for historic tax credits to keep the costs of conversion under control. Apartments in the Munsey Building will rent for about $1,100 per month, he said.

The project is to be financed by either the Community Development Finance Corp. or the U.S. Department of Housing and Urban Development, with permanent financing being supplied by Fannie Mae.

The Munsey Building would be the latest in a string of planned conversions and new multifamily projects downtown. Developers are studying a building at 300 N. Charles St. as well as the Congress Hotel, the Abell Building, the Johnson Building, the Fidelity Building, the Bromo Seltzer Tower, the Stanbalt Building and the Hecht Co. building on Howard Street for possible conversions.

The Downtown Housing Initiative has set a goal of having 1,000 apartments under construction downtown by June 2000.

Before any residents will be calling it home, however, the Munsey Building will have to overcome daunting challenges, not the least of which is its location, surrounded by courthouses and office buildings.

"The Munsey Building wouldn't link up with other planned or existing residential projects, and that's one of the things we'd like to see, is that the projects coalesce and create a sense of community," said Tracy Durkin, a Downtown Partnership of Baltimore Inc. executive and director of the downtown housing initiative. "But, clearly, market rate housing is what we want to achieve, and converting the Munsey Building would preserve a historic building."

The Munsey Building has been owned since 1995 by H&S Bakery Inc. co-owner John Paterakis Sr., who acquired the building for $650,000 from NationsBank Corp.

Paterakis had attempted to lease the building to tenants but suffered from a dour office market for older properties.

Michael S. Beatty, a vice president of Paterakis' H&S Properties Development Co., said Paterakis did not consider converting the building a viable option.

"It wasn't something we were interested in," Beatty said. "Our focus is Inner Harbor East and building there. We bought it to renovate it to office space, and that never got off the ground. Brinker can do a great job, he has some great ideas, if he can solve the parking issues."

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