Mystery sale for Martin site

World War II aircraft plant in Middle River sold to anonymous bidder for $37.5 million

September 23, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

A huge World War II aircraft manufacturing plant in Baltimore County's Middle River community sold for $37.5 million yesterday after a three-month-long online auction that drew international attention.

Local leaders were stunned by the price - it set a record for an online auction of U.S. General Services Administration property - and were eager to learn the identity of the anonymous buyer, known only as "believe1." The GSA expects to reveal who the winner is in seven to 10 days.

The 1.9 million-square-foot main building, a former Glenn L. Martin aircraft plant listed on the Maryland Inventory of Historic Properties, sits on 50 acres on Eastern Boulevard.

It's across from Martin State Airport, next to a MARC train station and a short drive to Interstate 95 and I-695.

Baltimore County Executive James T. Smith Jr. hopes the property will be redeveloped with a mix of uses - retail, office and residential - to take advantage of the transportation options.

The auction got off to a slow start. The first bid, for $10.5 million, didn't come in for a week. The second bidder waited for a month after that. But thereafter the speed - and price - quickly escalated. At the end, bidders had until 2 p.m. every weekday to outbid the highest offer of the previous day.

Smith, ebullient yesterday after the auction closed, said he had expected that the property would bring no more than $20 million. He saw the price as a sign that developers have bought into government efforts to revitalize older industrial communities on the county's east side.

"It clearly confirms our enthusiasm for Baltimore County and our excitement about eastern Baltimore County," he said.

More than 250 inquiries came in from across the country and elsewhere. Prospective buyers who visited the property hailed from as far away as Central America and Hong Kong, said David S. Iannucci, executive director of economic development for the county.

Together, the General Services Administration and Baltimore County conducted more than 40 tours of the building, some with multiple developers tagging along.

In the end, eight people - or groups - put in a bid. By the beginning of this month, there were just two left - "believe1" and a bidder known as "26." The latter was outpriced by $200,000.

Despite the international interest, local real estate brokers speculate that the winner is local. The name suggests Baltimore ties, a possible reference to the city "Believe" campaign.

In any case, rumors are flying, said Michael Spedden, vice president at MacKenzie Commercial Real Estate Services in Baltimore. He's thinking about an office pool - name that developer.

"It's a challenging project, so I'm tickled pink that somebody bought it, and I hope they do wonderful things with it," he said. "We had some people looking at it."

Constraints

Spedden thinks it isn't a simple conversion because the main building's historic status limits the alterations a developer can make. The ground floor is studded with columns built closely together, so he's not sure how it could be used - other than as storage space or very inexpensive offices.

The building was used for both purposes by the GSA, which acquired it in 1964 from the Navy.

But the top level - where planes were once assembled - has 120,000 square feet of unobstructed space. The county considers it a perfect opportunity for loft residences.

Conversions are gaining popularity nationwide, even tricky ones. Locally, developers are putting structures ranging from a grain elevator to a power plant to new uses. Old buildings are looking better and better as the cost of new construction has soared in the past two years, Spedden said.

The Middle River site's $37.5 million selling price sounds high for industrial space, said Edmond L. Prins, chief executive of Idled Assets Group Inc., a Florida consulting group that works with large corporations trying to get value from their real estate.

But it might prove to be "a very cheap price" for other uses, he said, especially with the commuter train access to Baltimore and Washington.

`They buy ideas'

"Obviously somebody who went in there had an idea, because the reality is, people don't buy real estate, they buy ideas," said Prins, who has handled Baltimore-area projects.

Because it's near I-95 and part of the growing Baltimore-Washington market, the location makes sense, said Joseph M. Cronyn, a partner at real estate consulting firm Lipman Frizzell & Mitchell.

"There aren't a lot of large properties like that that are available on the East Coast," he said.

Access will improve shortly. The long-awaited extension of Route 43 from U.S. 40 to Eastern Boulevard is expected to open next month.

For county officials, who are busily trying to guess the identity of the buyer, the end of the auction is cause for excitement. They're just a bit disappointed that they won't have a reason to stare at the auction Web site now, refreshing it to see if the ante was just upped.

jamie.smith.hopkins@baltsun.com

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