Ulman wants Howard to buy Ascend One building in Columbia

Proposed $26 million purchase would give county ownership of building it has leased since 2008

December 22, 2010|By Larry Carson, The Baltimore Sun

The Ulman administration is moving to buy the 160,000-square-foot Columbia office building Howard County has leased since 2008.

County Executive Ken Ulman said the $26 million purchase of the Ascend One building was "too good to pass up," partly because it would produce an operating profit during the first few years of the two-decade-long repayment. He is asking the County Council for approval to sell bonds and borrow the purchase price in legislation set for introduction Jan. 3 but filed Wednesday. Annual payments, including interest, Ulman said, would be about $2 million.

"It provides the county with immediate cost savings," Ulman said. The building's owner, W.P. Carey and Co. LLC, a New York based-real estate holding company, offered it for sale during a finite window of time at "recession" prices, he said. Ascend One, a for-profit credit counseling firm, holds a lease on the entire building for five to seven more years, but the firm occupies only about a third of the two-story, open-concept brick structure.

Under the deal Ulman wants, Ascend One would pay the county $1.1 million a year, instead of the county paying Ascend One $1.6 million in rent. That combination would more than make up for the annual purchase cost through the first few years, Ulman said.

In addition, the county plans to move the health department from other leased space into the Ascend One building in two years, saving another $1 million a year in rent. Also, county schools are now relocating teacher training and administrative offices from the former Faulkner Ridge Elementary building in Wilde Lake to Ascend One, allowing the run-down Faulkner Ridge building to be closed, according to school system spokeswoman Patti Caplan.

"That building is not in the best condition," she said, and school officials need office and meeting space.

The deal is reminiscent of the county's 1992 fire-sale purchase of the Gateway office building in Columbia during the severe recession underway then, and that building, now in need of renovations, plays a role in this purchase, Ulman said. During the initial five years after the Ascend One purchase, Ulman said, the county could decide whether to sell or renovate the Gateway building.

Howard County leased 106,000 square feet of the Ascend One building, at 8930 Stanford Blvd. off Dobbin Road, for $1.6 million a year starting in 2008, when county government offices moved to Columbia to allow a total renovation of the George Howard building complex in Ellicott City. That renovation was completed in September, but the county continued the Columbia lease because the Circuit Court building is now due for renovation. The courts are to move to Ascend One in early 2011 for about a year. In addition, two county agencies, Human Resources and Information Technology, remained in Columbia.

"It really makes sense," Ulman said. Not only is the building open and in good condition, but it was designed to allow a two-story, 40,000-square-foot addition if needed."You just can't find a building that big and flexible. Brand new, it would cost $47 million, plus land," he said.

Ulman is asking the County Council for permission to use existing borrowing authority to sell bonds to finance the purchase price and then pay it off over 20 years.

Council chairman Calvin Ball, a Democrat who represents the area where Ascend One is located, said the council needs to learn more details and study them, but at first blush the deal might make sense.

"At this point if we can effectively use the county's resources, we should consider that opportunity," he said. Courtney Watson, an Ellicott City Democrat known as a fiscal conservative, said she too needs more information.

"I do know we are in need of [agency] consolidation, and it would enable us to do that," she said about the purchase.

Greg Fox, the council's only Republican, was surprised to hear about the idea from a reporter, and had no immediate response.

larry.carson@baltsun.com

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