Work begins on shops at Lockwood Place

Delayed project to add an office tower to skyline

April 17, 2003|By Meredith Cohn | Meredith Cohn,SUN STAFF

A gap in the skyline along Baltimore's main street of commerce will be filled with a 13-story, blue-tinted glass and metal building and a neighboring shopping mall in just over a year, according to developers who recently began construction.

The work on Lockwood Place was put off more than a year because of the sagging economy, but the developers expect that shops and businesses will again be ready to move and expand next year - especially to space that offers harbor views, parking and modern amenities.

Champps Americana sports bar and restaurant, Chevy's Fresh Mex, Olive Garden and the Baltimore Chocolate Factory and Museum are to occupy more than 60 percent of the three-story retail complex that broke ground this week and will run along Pratt Street and Market Place, according to King of Prussia, Pa.-based Kravco Co., the lead developer.

The remainder of the 105,000-square-foot space is unleased.

"We really wanted to start in '01," Timothy S. Herb, Kravco's development director, said yesterday. "We've had a couple of really tough years in the retail market, but hopefully things will start to get better."

The mall is part of a $100 million project, including the office building and a recently completed parking garage, commissioned by Baltimore City Community College on its downtown property as a means of adding to the school's income.

The project was proposed in 1998 and requires the developers to pay rent and build on a specific schedule, which has been amended because of economic conditions. The city offered tax breaks for the offices and garage to help get the project going.

The 275,000-square-foot office building has no tenants, but work on its foundation commenced over the winter and steel will rise in the next couple of weeks, said its developer, Trammell Crow Co.

"This will fill in the last major office development site on the harbor," said T. Courtenay Jenkins III, a senior vice president of Trammell Crow. "It will be the corporate address for companies that need the image of Pratt Street."

The developers say they know the office project is a gamble. The economic malaise continues, neighboring office buildings have significant unleased space, and brokers say activity is slow. The vacancy rate in the Baltimore office market is about 13.5 percent and goes up to 14.6 percent in the central business district when offices for sublet are included, according to commercial real estate company MacKenzie/Oncor Intl.

Two other buildings have been constructed downtown recently: Dugan's Wharf, a 172,000-square-foot building developed by the Cordish Co. on Pier 4 that is nearly full, and a 338,700-square-foot building at 750 E. Pratt St. that is about one-third leased.

The downtown vacancy rate drops some when only the top-tier office buildings on Pratt Street are counted, said James R. Grieves Jr., a vice president at MacKenzie.

"They're betting on the market correcting itself in the next 12 to 24 months and there will be pent-up demand for space, and that's probably a pretty good guess," he said. "It might take a while to lease up, but if those other buildings are fully leased, then they'll have first dibs on anyone looking for new space."

New buildings, however, tend to take some tenants from older downtown buildings, Grieves noted.

Daniel S. Hudson, managing director for Trammell Crow, said some local businesses have expressed interest in his building because they need more space or want to be in the newest harbor building.

"The owners are very excited about the opportunities presented by this asset in particular and Baltimore in general," Hudson said. "It's a downtown, urban location with harbor views and parking."

The office building owner and equity investor is Multi-Employer Property Trust, a pool of corporate and public pension money. Trammell Crow has developed other office projects in the region for the trust.

The office tower shell and mall are to be completed by May 2004. The 940-space garage opened in February.

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