Baltimore's push to revitalize its traditional downtown core took another step yesterday with the sale of Baltimore Gas and Electric Co.'s historic West Tower headquarters for $5 million to Southern Management Corp., which expects to turn the space into 183 apartments.
The 21-story, beaux-arts building at 39 W. Lexington St. on the west side of Charles Center, which dates from 1916, is to be transformed into apartments by late 2006 or 2007.
"We were sitting there with more space than we needed," said Gregory C. Martin, vice president of general services for BGE. "It continued the connection of BGE to downtown Baltimore, and it also anchored the West Side redevelopment. It served their purposes as well as ours."
The BGE building complex is on the eastern edge of the Westside Redevelopment Project, an $800 million rebuilding and renovation effort that is adding housing, stores, attractions and restaurants to the historic downtown retail district.
The linchpin, the Hippodrome Theater on Howard Street, will reopen next week as a performing arts auditorium.
Constellation Energy Group, the parent of BGE, recently committed $1 million for the renovation of the historic theater.
BGE announced last spring that it was negotiating to sell the West Tower and that it planned to move its headquarters to an adjacent tower, keeping its 500 workers in Charles Center. The company expects to move its employees into the more modern East Tower by mid- to late 2005.
The 15-story East Tower will require a new lobby and a new elevator system, Martin said. He declined to reveal the cost of those projects.
David Hillman, president of Southern Management and a longtime apartment developer, said he expects the apartment project to cost about $20 million and take 20 months to complete once he gets control of the building.
"There's no shortage of people who want to live down here," he said yesterday. "The area is going to be great. The transformation is going to be dramatic."
With the new venture, Hillman will control about 900 units in the large block bound by Charles, Saratoga, Liberty and Fayette streets.
His other projects include the Atrium in the converted Hecht's department store on Howard Street and the Standard in the former Standard Oil building on St. Paul Place. Both are about 90 percent leased, he said. A third project, the Gallery on Center Street, is fully leased, he said.
Hillman said he is concerned about whether the historic tax credit will be in effect for the West Tower, which recently was added to the National Historic Registry.
"The plans turned out to be really dynamite," he said. "The problem is, if we don't get the historic tax credit, we'll have real problems with this building. When the interest rates go up, which they will, it's going to be real hard to market at a price that anyone in their right mind would pay."
Hillman said rents are to range from about $900 a month for a studio apartment to $2,000 for a two-story loft.
Renovation of the BGE complex will be enhanced by a more than $5 million refurbishment of the plaza outside the two buildings, which is to begin this spring.
The infrastructure of the two buildings must be physically separated, and five elevators must be installed in the East Tower, in addition to improvements to the heating, air conditioning and electrical systems.
"I've been feeling like a pioneer over there on Howard Street, because I am," Hillman said. "And the people living with us definitely have been pioneers, but they're going to have a lot of company soon. There are enough real things in the west side to make prospective tenants feel real comfortable."