Money manager Legg Mason Inc. said yesterday that it will leave its Light Street skyscraper for Baltimore's Harbor East when its lease expires in 2009 - a major boost for the accelerating expansion of downtown beyond the boundaries of the old central business district.
Legg expects to move nearly all of its roughly 1,000 Baltimore-area employees to a mixed-use complex that H&S Properties Development Corp. will build in the fast-developing Harbor East, a once-industrial area transformed in recent years into a cluster of upscale hotels, residences, offices and retail. The move will include 200 to 300 workers now based in Owings Mills as well as the 700 or so downtown.
The company said it has signed a 15-year agreement to lease up to 400,000 square feet, most of the 24-story office tower that H&S Properties is building. The complex will include a Four Seasons Hotel topped by condos and a 1,200-space parking garage under the twin buildings.
Legg plans to move its headquarters there in the summer of 2009, creating a major vacancy in its former home. Legg leases well over half of 100 Light Street, the tallest building in the city and a signature part of the downtown skyline. The building's owners and civic leaders are optimistic about finding new tenants when the time comes.
Yesterday's announcement was met with cheers by local officials and civic leaders, who are delighted that one of Baltimore's largest employers plans to stay in the city - and bring in more jobs. M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's economic development arm, said it is one of the most exciting economic development decisions in "a very long time."
"It just really confirmed that people see Baltimore as a thriving city with energy," said Mayor Sheila Dixon.
Said James W. Hirschmann III, the company's president and chief operating officer: "We had a serious preference to stay in the city from the outset, although we did have the option of relocating out to Owings Mills."
Legg changed its corporate bylaws recently to delete the requirement that its headquarters be located in Baltimore, creating the impression that it might leave.
Its move eastward marks a significant and symbolic shift for Baltimore. When Legg's current building on Light Street opened in 1973 as the then-USF&G Corp. headquarters, it was the first major private project in the development of the Inner Harbor - a sign that the old blue-collar waterfront really could be reimagined as a white-collar destination.
Now Legg will become the largest employer in the redeveloping Harbor East, joining businesses such as university operator Laureate Education Inc. and investment firm Brown Advisory.
"It's not your grandmother's downtown anymore," Brodie said. "You used to be able to say there was a rather small area called the financial district, and you used to be able to say, `Well, the Inner Harbor, that's at Light and Pratt and maybe a couple blocks in either direction.' So, that's clearly expanded. ... What happens to older buildings downtown then becomes another set of questions, but it's a good set of questions to have versus your downtown is static, not expanding, no new buildings."
The team handling Legg's building - H&S Properties and Struever Bros. Eccles & Rouse, the development manager - recently asked for "financial assistance" for the complex, Brodie said, but the city has not made a decision. He declined to be more specific about the request.
H&S Properties plans to break ground in March on the two-building, $550 million project, though the Legg building still must receive design approval from the city.
The Four Seasons Hotel is scheduled to open in early 2010, a half-year or so after the office tower - and much later than the developers originally planned. When the project was announced, they expected to begin construction in 2004.
The condominium component is also squishier than it once was, possibly because the market has weakened. The original plan was for 26 condos, but H&S Properties now declines to say how many there will be.
"It's going to be a project that people talk about around the world," said Michael S. Beatty, president of H&S Properties. "It's iconic architecture."
Speculation abounded in recent weeks that Legg would move from its front-and-center spot downtown. Talk was fueled not only by the bylaw change, but also by a long closed-door meeting of the Baltimore Development Corp.'s board that Brodie confirmed yesterday was about Legg.
City officials had originally wanted the company to stay put and hoped that a 10-story parking garage the tower's owners are developing would help. But company executives wanted newly built space.