Financial services company Morgan Stanley began its move this week to a new building between Harbor East and Fells Point as part of a long-term plan to expand in Baltimore and create hundreds of new jobs in the city.
The move also means that Baltimore's newest office building, called Thames Street Wharf, is getting its first tenants. The eight-level building on the former Allied Signal property is the first major office structure to open within the 27-acre Harbor Point parcel that's slated to become an $830 million commercial and residential community.
Morgan Stanley's move is being hailed by Baltimore officials as a boost for a city that has lost corporate headquarters in recent years, including financial firms such as Alex. Brown & Sons. They say Morgan Stanley's expansion will make it one of the largest financial services firms in the city, along with Legg Mason and T. Rowe Price.
"It is one of the most exciting changes in Baltimore in the past several years," said M.J. "Jay" Brodie, president of the Baltimore Development Corp.
This month, 500 Morgan Stanley employees are moving to the waterfront building at 1300 Thames St. from two nearby offices. The company intends to grow to 900 employees by the end of 2012 and to 1,500 by the end of 2018.
Morgan Stanley is occupying just over half of the 275,000-square-foot building, which was developed by John Paterakis' H & S Properties Development Corp. and Struever Bros. Eccles and Rouse. The building's completion is another example of commercial development moving eastward along Baltimore's waterfront from the traditional center of downtown.
The city and the state approved loans for Morgan Stanley to establish and expand offices in Baltimore, and Brodie said they have paid off. "It's the classic example of using incentives to attract and expand a major business," he said. "It's a phenomenal result for the city, well worth the incentives."
Morgan Stanley's local employees work in the areas of institutional securities processing, banking operations, servicing of loans and other activities. Morgan Stanley spokeswoman Sandra Hernandez said the company is hiring employees now and that the new building will give it room to grow.
"The idea is to position the Baltimore location for future growth by consolidating employees in that building," she said.
The employees are moving in phases from two other Baltimore locations, on Bond and Lancaster streets, and will be vacating those locations by mid-year, Hernandez said. A ribbon-cutting ceremony at Harbor Point is planned for early June, after the move is complete.
Morgan Stanley ranks as the world's largest brokerage and the sixth-biggest U.S. bank by assets. The firm bought control of the Smith Barney brokerage unit of Citigroup Inc. in 2009.
In late 2008, Baltimore's Board of Estimates approved a $1.5 million city loan to help Morgan Stanley expand in Baltimore, based on the expectation that it would create 300 new jobs by the end of 2012 and 900 new jobs by 2019. If the jobs goal is met, according to the loan agreement, $750,000 of the loan will be forgiven.
In addition, the company received a $1.75 million loan from the city in 2003, tied to job-creation goals and occupancy of office space at the Bond Street Wharf office building in Fells Point.
Designed by two award-winning firms, Ayers Saint Gross of Baltimore and Elkus Manfredi of Boston, the brick-and-glass Thames Street Wharf is on the western edge of Fells Point, next to the Frederick Douglass-Isaac Meyers Maritime Park and Museum, and several blocks from the shops and restaurants of Harbor East and Fells Point. Cassidy Turley is responsible for leasing.
The building is clad mostly with brick toward the land side of the project, reminiscent of traditional Fells Point warehouses, but gets increasingly glassy on the end facing the water. The architects originally designed it to rise from a pier projecting into the harbor, but the U. S. Army Corps of Engineers would not allow that, and it was repositioned to rise entirely on land. It is not on the capped-over "remediation area" where the Allied Signal chromium plant once stood.
H&S Properties has unveiled plans to build a 300-unit apartment building and a 270-room Westin hotel as the next phases of Harbor Point, but work on those projects has not moved beyond the design phase.
Besides the city loan, the state approved a $4 million grant to Morgan Stanley from the Department of Business and Economic Development's Sunny Day Fund and a $1.5 million work force grant, according to the BDC. Total expansion costs for Morgan Stanley have been estimated at $42 million.
In return for the financial assistance, Morgan Stanley has done everything it said it would do, said Jeffrey Pillas, chief financial officer for the BDC.
"Morgan Stanley has committed to expand here, and they've done exactly that," he said. "It's been a very good relationship between the city and Morgan Stanley. It's been very good all the way around."