Downtown Baltimore will effectively become the new State Office Center over the next several years as Maryland officials shift about 3,500 employees from the current State Center complex near Bolton Hill.
State officials today outlined plans to move employees in up to a dozen agencies out of aging buildings in State Center and into space in Baltimore’s central business district, during a briefing session organized by the Downtown Partnership of Baltimore.
Maryland’s General Assembly this spring allocated $50 million to help cover costs of the multi-agency relocation, from moving expenses to buying furniture and fixtures to printing stationary with new addresses.
The legislation was passed in part to free up space in State Center for redevelopment but also to help office landlords in the downtown business district recover from the loss of tenants during the COVID-19 pandemic. In addition, several large companies have announced plans in recent months to move out of downtown and into new buildings at Harbor Point and Harbor East, further reducing the number of office workers in the city’s traditional core.
“This should be the largest single influx of jobs in downtown’s history,” said Shelonda Stokes, president of the Downtown Partnership. “This is the important catalyst that we needed in the central business district.”
The briefing session was led by Nelson Reichart, deputy secretary of the state’s Department of General Services (DGS), and Wendy Scott-Napier, assistant secretary of the department’s Office of Real Estate. DGS Secretary Ellington Churchill Jr. joined the meeting toward the end.
The main area targeted to receive agencies is the district bounded by Pratt Street on the south; Interstate 83 and President Street on the east; Franklin Street on the north and Martin Luther King Jr. Boulevard on the west. That means the state is not giving high priority to moving tenants to Harbor East or Harbor Point, two areas that have been drawing tenants out of downtown, or the areas in or around Camden Yards. Metro West, the former Social Security Administration complex on North Greene Street, is eligible to receive tenants.
State officials are primarily looking to move agencies to privately-owned buildings that are already open, not buildings owned by the state. One exception is the Department of General Services, which plans to redevelop a state-owned facility for its own use, because it has a canine unit to house, a large amount of equipment to store and other non-traditional requirements.
In general, “we’re trying to focus towards commercial buildings rather than state-owned facilities,” Reichart said. “Every building within the boundaries, if it provides all of the necessities that the agency needs, it can be considered.”
State officials may be willing to consider proposals for new construction as well as existing buildings, he said, but the state doesn’t want to wait years for a building to be ready.
“Could a new building be constructed within the boundaries?” he asked. “It could be. The biggest issue would be, in our analysis, what is the time frame? I don’t believe that we would want to continue to operate State Center for four or five years until a new building is up and running. That would be a little bit counter-intuitive to what we are trying to do. But certainly, if there’s a newer building that meets the criteria for the state, sure.”
The timetable calls for the state’s Department of General Services to seek proposals to house individual agencies over the next several months. The goal is for the landlords’ proposals to be submitted and evaluated by end of summer 2022 and for the moves to begin in 2023 or sooner.
“The typical commercial lease acquisition process runs about 12 to 15 months from the time we issue the Request for Proposals until we have approved leases, which means the leases are presented to the Maryland Board of Public Works,” Reichart explained.
“We hope to have all of the approvals…presented to the Board by the end of summer in 2022. That’s probably 15, 16 months from now. After that approval, we then begin the final design, the fit-out, the build-out of the space, the construction and the actual move-in.”
The entire process from the issuance of the RFP until a tenant actually moves in “usually falls within that 18- to 24-month period,” he said. “So as we begin to issue these RFPs over the next several months, that 18- to 24-month cycle will begin. We’re looking to have everybody’s leases signed or leases approved sometime in the end of ‘22.”
The property owner will be responsible for interior design and construction work needed to accommodate the tenants, Reichart said. “It’s on his dollar to provide the space as required.”
Rental rates will be the Number One consideration in selecting downtown locations, but the state will consider both newer Class A and older Class B buildings if they otherwise meet the specifications of the Request for Proposals.
“There are some [buildings] that are small and inefficient and there are some that are good,” Reichart said. “We’re going to be looking to see what is the best value for the state.”
The price component “does carry the most weight,” Scott-Napier said. “Price is the largest consideration in the evaluation process.”
When all of the agencies are relocated in about two years, the state will move ahead with plans to redevelop the 25-acre State Center property, most likely with a “mixed-use” development that may include housing, offices and retail, Reichart said. Until all the state employees move out, the state will have to bear the double costs of operating both the State Center complex and the newly-leased downtown offices, he said.
The state agencies targeted to move include the departments of: Aging, with 60 employees; Budget and Management, 280; Health, 2,500; Information Technology, 25; Labor, 1,000; Planning, 75; Assessments and Taxation, 206, and Maryland Tax Court, 10. The state has already begun a search for a new downtown headquarters for the Department of Human Services, with 700 employees.
The state’s plans to move an estimated 3,500 employees to the downtown space excludes employees in those departments who may eventually work from home.
Also moving but conducting their own searches are the Maryland Comptroller’s Office and the Department of Legislative Services. The National Guard is expected to the remain at the Fifth Regiment Armory, a historic building that is owned by the state.
Reichart said the state would be open to the possibility of multiple property owners joining forces and offering more than one location for a large agency. CBRE, a private real estate brokerage with offices at 100 East Pratt Street, will assist state officials in evaluating proposals. More information is on the Department of General Services website at www.Maryland.gov.
