Exelon picks Harbor Point for future headquarters
Project led by bakery magnate, developer John Paterakis Sr.
The site of the old Allied Chemical plant, between Harbor East and Fells Point, which will be the site of the new Exelon Headquarters. (Gene Sweeney Jr., Baltimore Sun / February 1, 2012)
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1300-1398 Philpot St, Baltimore, MD 21231, USA
The prospect of adding a new office tower to Baltimore's skyline excited city officials and the development community. But some were disappointed that the companies chose a site between Harbor East and Fells Point, rather than in the central business district. Others questioned whether the burgeoning waterfront area can handle all of the recent development.
J. Kirby Fowler, Downtown Partnership's president, called Exelon's commitment to downtown "good news" but said he was disappointed in the site selection.
"There were many compelling and appealing sites that would have had the added benefit of reinforcing downtown, particularly the older core," said Fowler. His group had been advocating for properties in the central business district, including the former McCormick and News American properties near the Inner Harbor.
Exelon, which has pledged to build a Baltimore headquarters as part of a $7.9 billion buyout of Constellation Energy Group, did not release details on the building's design or the project's scope. The development deal is contingent on Exelon and Harbor East Development Group LLC reaching an agreement on lease terms and other conditions. The property once held an AlliedSignal chemical plant.
The Constellation-Exelon merger must be cleared by regulators, including the Maryland Public Service Commission, which is expected to make a decision by Feb. 17.
"We are committed to Baltimore's downtown and its business district, and we look forward to being a growing part of the Baltimore community as the overall vitality of the city's downtown continues to flourish," Exelon President and Chief Operating Officer Christopher M. Crane said in a statement.
For its new Baltimore headquarters, Exelon sought proximity to the waterfront, 300,000 to 370,000 square feet of rentable space, at least 7,000 square feet on a single floor for its trading operations, an office floor of about 30,000 square feet and occupancy in 2014. Exelon said it evaluated developers based on their experience and proposed "competitive and economic lease terms."
"It was a challenging decision and one based on a variety of criteria," Exelon spokeswoman Judith Rader said. "The Harbor [Point] site best met those criteria, and we think the development overall will be very good for Baltimore's economy."
Rader said Harbor Point also provided flexibility for future growth and the developer has experience on "delivering downtown Baltimore high-rise office buildings on schedule." Harbor East Development also owns the Legg Mason Tower.
Exelon did not reveal all the sites that it considered, but developers, city leaders and others had identified a handful of locations that could accommodate a new office tower.
Besides Harbor Point, other sites that had been proposed to Exelon included the former McCormick site at Light and Conway streets; the old Southern Hotel site at 1 Light St., Baltimore City Community College's Bard Building at Lombard Street and Market Place; and the old News American property at 300 E. Pratt St.
Three of the sites — 1 Light St., the BCCC building and Harbor Point — are in state-approved city enterprise zones that offer tax breaks of varying levels over a 10-year period.
Advocates for the city's core business district, including the Downtown Partnership of Baltimore, had been pushing Exelon to select a location to reinforce the area around Pratt and Light streets. They also feared that a new structure could hurt the city's business center by creating an excess supply of office space.
Looking forward, Fowler said city officials and other stakeholders should evaluate how incentives are used to lure businesses downtown.
"We want to ensure that older parts of downtown get a shot at succeeding as much the new parts," he said. "It's paramount for us to engage the public and private sectors on how incentives are being used to move office tenants around the city."
The owner of the old McCormick plant recently sought a property tax break from the city to allow it to compete with other developers for Exelon's headquarters.
"I just wish we could have developed a comparison of sites that was apples-to-apples," said Councilman William H. Cole IV, whose district includes downtown. The McCormick site was disadvantaged in the process by being outside long-established tax incentive zones, he said.
Plans for the old McCormick property, owned by Questar Properties, called for nearly 400,000 square feet of office space topped with about 350 apartments with street-level shops and an above-ground garage. Last week, the Baltimore Development Corp.'s board of directors considered Questar's request for a subsidy known as payment in lieu of taxes, or PILOT. BDC board members were prepared to make a recommendation to Mayor Stephanie Rawlings-Blake after last week's meeting, according to BDC President, M.J. "Jay" Brodie.