Legg seeks room to grow

Brokerage looks at sites downtown and in the suburbs

Commercial real estate

June 29, 2000|By Meredith Cohn and Bill Atkinson | Meredith Cohn and Bill Atkinson,SUN STAFF

Legg Mason Inc. expects company growth to fuel a major expansion over the next decade and is talking with city officials and developers about building - and subsidizing - new top-tier office and parking space to keep the brokerage's workers downtown.

There are no plans to abandon the company's headquarters on Light Street, where about 1,600 employees occupy two-thirds of the building, according to James W. Brinkley, president of Legg Mason Wood Walker Inc., the brokerage subsidiary of Legg Mason Inc. He said the number of new jobs isn't clear. But hurdles downtown, including costs and a lack of office and parking space, have the company looking at Owings Mills, Hunt Valley and elsewhere in the region for the expansion.

"We're looking at the future," Brinkley said. "Certainly we'd like to expand in the city, but we're a public company and we have shareholders."

To bypass a suburban location, where rents are lower and parking is free, the company would likely request public money to offset at least part of the difference.

Further, Legg Mason is concerned about time. With little space to expand in the tight, upscale office market downtown, a new building would be a must, all parties agree. Brinkley did not dismiss that option, although it would take at least 18 months.

The city and developers have responded with three sites that could accommodate both a high-rise office tower of 30 floors or more and a multilevel parking deck. All the sites are in the planning stages and, officials said, could be developed once an anchor tenant such as Legg Mason is identified.

"We see Legg Mason as a very important business to which we want to pay a lot of attention," said M. J. "Jay" Brodie, president of the Baltimore Development Corp., the city's quasi-public economic development arm that is one of the entities negotiating with the brokerage. "We're looking at the situation and if there is a solid argument for public assistance. We're not just writing blank checks."

But the city is making sure every suitable site is presented to Legg Mason.

The first is on East Lombard Street between Calvert and South streets, a site the city is in the process of acquiring. A dozen tenants would have to be relocated before the city could build a 500-space parking garage and high-rise office tower. The city would likely sell revenue bonds to fund the garage, to be repaid with parking fees, and lease the air rights above the deck to a developer who would build an office tower.

The second site is One Light Street, owned by developer J. J. Clark Enterprises. A 600-car garage is planned with an office tower of at least 30 stories on top.

Also under consideration is the campus of Baltimore Community College, where an 800-space garage and office building next door are planned. Developers Lockwood Associates also plan retail and a midservice hotel there.

Brodie said all of the projects will move ahead whether Legg Mason commits or not, and that will give the city badly needed top-tier office space to pitch to other local and out-of-state companies. However, none of the developers can beak ground until they have a committed anchor because lenders want an ensured income.

To lure Legg Mason to one of the projects, the city may have to use public money to subsidize monthly parking, which ranges from $150 to $180 a space downtown. The city may also have to use taxpayer dollars to offset annual rent, which reaches $30 a foot downtown for the nicest buildings. The city could also subsidize the development. No specific deal has been offered by the city, Brodie said. The Downtown Partnership is working on temporary parking for the company.

"We're confident their needs can be met at these sites," he said. "But it all has to do with timing and economics."

Brodie said he fears that the city may not be able to match a deal offered in the suburbs. The city lost law firm Piper & Marbury LLC in 1998 to an existing Baltimore County building when space it wanted at the community college was awarded to a rival of the developer it had chosen.

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