F&G Life to Fleet Street tower

State tax credits will facilitate move to Inner Harbor East

Downtown skyline

June 21, 2000|By Meredith Cohn | Meredith Cohn,SUN STAFF

Fidelity & Guaranty Life Insurance officials said yesterday that they plan to tap state tax credits available to businesses that stay in the city and move to a new office tower under construction in Inner Harbor East.

F&G Life has outgrown its space and plans to move its 165 employees by December to leased space in the Fleet Street building being developed by H&S Properties Development Co. It will take two of the building's six floors, or 56,000 square feet, which doubles its current space. Sylvan Learning Systems also plans to anchor the tower, which will adjoin a Courtyard by Marriott and some retail space.

"We wanted to stay downtown; our employees wanted us to stay downtown," said company president, Harry N. Stout.

The company had moved in 1996 from a campus on the city-county line to Pratt Street downtown with a state incentive grant of $500,000. It pledged to maintain a staff of 100.

The company now plans to apply for tax credits valued at up to $5 million during the next 10 years based on its spending, Stout said. He said the benefits will come in the latter half of the time provided F&G Life adds 25 jobs and invests at least $500,000 in its Baltimore operation.

The requirements should not be a problem, Stout said. Construction work to ready the space will cost the company "in excess of a few million." He also expects to add employees as the company grows.

F&G Life reported that sales at the life insurance and annuity company topped $1 billion in 1999, doubling sales of the previous year. Stout said the life insurance industry is booming, unlike property and casualty, which caused F&G Life's parent company, St. Paul Cos., to go through a series of layoffs.

This move should be the last for a while, Stout said. It signed a 10-year lease with H&S Properties.

And it was lucky to get the space, Stout said. Available class A, or top of the line, space is dwindling downtown, and that forced the company to consider splitting up its operation or moving out of the city. Stout said he considered Owings Mills among other possible locations - a move that he said would not have violated his agreement with the state.

City and state officials had been concerned that the company might not find suitable space in the city. Laurie Schwartz, the city's deputy mayor for economic development, put vacancies in top-tier class A space with water views at around 5 percent. She hopes that expanding companies such as F&G Life will push developers to build another office tower this year." I wouldn't call it a challenge, keeping businesses in the city," she said.

"But anytime we learn of a business's lease coming due, we worry we could lose the business."

Stout said he did not go looking for a state handout to stay in the city. But officials discovered that the company qualified for the tax credit program.

"It was not the reason we stayed in the city," he said.

However, a state official said he was glad the program was available. The program worked as intended, said David S. Iannucci, deputy secretary of the Maryland Department of Business and Economic Development.

The tax credit program was enacted two years ago by the legislature to aid areas of the state that have a harder time luring or retaining businesses because of parking or crime or other drawbacks.

"We're always concerned about large employers in the city staying here," he said. "The program is working the way it was intended by essentially making the jurisdiction more competitive. Five years ago, we might have had a different conversation. They might have found it a lot easier to bolt for the suburbs."

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