Sale of west-side block to developer approved

Bank of America plans to build $60.8 million retail, residential center

October 04, 2001|By Scott Calvert | Scott Calvert,SUN STAFF

The Board of Estimates approved yesterday the city's sale of a square block on downtown's west side to Bank of America for a $60.8 million retail and residential development.

Mayor Martin O'Malley said the effective sale price of $4.9 million, if viewed narrowly, is "not a great deal for the city," which spent $12.1 million to buy the properties on the block and might not be paid by the bank for 11 years, if ever.

O'Malley said the Centerpoint project -- a deal put together by Baltimore Development Corp., the city's quasi-public development arm -- would act as a stimulus for a depressed 20-block area.

"It is a leap of faith, and it's an investment in the future of that area," the mayor said.

The city and developer agreed on a $6 million purchase price, but that will be reduced to $4.9 million because the developer is expected to spend $1.1 million on demolition and environmental cleanup.

The board approved the sale in a 4-1 vote. Dissenting was Comptroller Joan M. Pratt. She said the sale was "not in the best interest of the citizens" because of favorable terms for the developer.

But supporters said the agreement reflects the bank's risk in taking on a major project in a struggling part of town.

"This is not a sure thing," said Irene E. Van Sant, BDC's project analysis director. "We're sitting here hoping and praying the west side will work, but no one can guarantee it."

"There are a lot of risks we take," added Christopher B. LoPiano, senior vice president at Bank of America's Community Development Banking unit.

Yesterday's action clears the way for work to begin on Centerpoint, which documents say would have 370 apartments, 58,000 square feet of retail space and a 450-space parking garage.

Construction is expected to take two years. Bank of America's partner is Harold A. Dawson Co., a minority-owned firm in Atlanta. The development will occupy the block bounded by North Howard, North Eutaw, West Baltimore and West Fayette streets.

In addition to buying the properties in that block for $12.1 million, the city spent $1.7 million to relocate merchants. City Real Estate Officer Joseph A. Wesolowski said $700,000 more may be paid in relocation costs.

A BDC analysis says the city might not begin to be paid for the sale for at least eight years. That's when the cash flow generated by the investment is expected to begin to cover the bank's guaranteed 15 percent annual return.

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