The first wave of Legg Mason employees showed up at new Harbor East headquarters Monday, representing a new start for the struggling money manager while also creating a potential boon for businesses at the waterfront neighborhood.
At the same time, Legg's relocation will leave a big dent in the old central business district. The huge vacancy at 100 Light St., where Legg occupied 22 of the 35 floors, has not been filled.
For surrounding businesses at Legg's former home, the loss means more bad news during trying economic times.
Theresa Shoemaker, the general manager at Burke's Cafe, across the street from the Light Street tower, said Legg's relocation will mean fewer customers at a time when business is also suffering from the poor economy and expensive parking.
"We get a lunch crowd from Legg Mason, we get carryout from Legg Mason and a happy hour crowd too," she said.
Even though the move comes at a challenging time for Legg, company officials say the amenities - the waterfront view and the arts and business community that includes a theater, an athletic club, upscale restaurants and shops - will help motivate its employees and attract new ones.
Legg Chief Executive Officer and Chairman Mark R. Fetting, a Baltimore native, said the employees are excited about the new building, which is closer to the water than the Light Street headquarters and has a variety of features that the Light Street building does not, including a fourth-floor cafeteria with a large outdoor terrace and views of both the new harborfront and the historic neighborhoods farther inland.
"There's a difference in being on the water versus having water views," Fetting said. In the new building at Aliceanna and President streets, "the views are very inspiring. You can see the combination of the past and the future."
Some 550 downtown workers will move to the new glassy tower, down from 700 or so employees two years ago, a result of layoffs during the past year. About 450 workers based in Owings Mills, originally set to move to Harbor East, will be staying put, said spokeswoman Mary Athridge.
The first 20 employees at the new building work in the corporate services and real estate and technology departments. The "green" building features tons of natural light, amenities like an herb garden for the cafeteria caterer and wireless and other technology.
Julia M. Smith, who works in Legg's facilities and operations department, said the open work space is "really conducive to working as a team," while the Harbor East location encourages workers to mingle in the neighborhood.
Legg has signed a 15-year lease at the new skyscraper that bears its name, and the company will occupy 10 1/2 floors while subletting three others. The move, which will occur in stages, is expected to be completed by Sept. 13, said Wayne Christmann, Legg's vice president of global facilities.
The building's owner, H&S Properties Development Corp., secured about $34 million in tax breaks from the city, a move that provides tax forgiveness to the office tower for 15 years and to an underground garage for 25 years.
When Legg announced its move to the new Harbor East skyscraper in 2007, it was not only a major boost for the once-industrial area but for the company transforming into a global asset manager.
But fortunes have changed for Legg since then. Its profit and stock have suffered, hurt by costs related to propping up money market funds invested in toxic securities, dismal returns from its flagship mutual funds and shrinking assets under management amid the recession. Legg's total work force, which includes its headquarters and its subsidiaries, has lost 565 people, or 13 percent, since September.
Asked about the timing of its move today, Athridge said, "It could certainly have been better, and we did not foresee the events of 2007 and 2008 when the decision was made in 2006. That said, we are moving forward; our employees are excited to move in."
Not only are Legg workers looking forward to the move, so are nearby shops. Some like boutique Urban Chic are planning promotions for Legg employees.
George Sakellaris, owner of Handbags in the City, which is a few doors down from the new Legg Mason Tower, said he envisions more foot traffic and increased sales.
"They're on lunch, they see something in the window and they come in and boom, they're done," Sakellaris said. "It'll bring a lot of new people in the area, like their family and friends."
Ben Hauser, owner of Glarus Chocolatier, said Harbor East's redevelopment, including Legg Mason's move, was a main reason he and his wife chose to open the store's second location on South Exeter Street, across from the Whole Foods Market.
"We do a lot of corporate gift-giving. We count on retail sales but we look forward to businesses like Legg Mason to buy gifts for people," Hauser said.
Despite the huge vacancy at 100 Light St., David J. Downey Jr., a senior vice president and principal at Colliers Pinkard, the commercial broker representing the building's owner, said there's "positive activity in the building, and hoping that we will announce the first new tenant in the next few weeks."
Kirby Fowler, president of the Downtown Partnership, said he's not worried. Fowler said the building's owner has opened a parking garage for the building's tenants and has launched a redesign of the two-acre plaza surrounding the tower.
"100 Light St. is one of our best properties downtown and will have tremendous demand," he said, noting his group will monitor the vacancy. "We have confidence that the building will have a good future."
Staff writers Andrea K. Walker and Ed Gunts contributed to this article.
