For defense-related contracting, sequestration lands softly for now

Several events this week showed that defense contracting, while not invincible to decreased government spending, is still doing alright.

The Daily Record reported Wednesday that Lockheed Martin performed better than expected in the third quarter of 2013. Some of that may have been attributable to increased international activity and planning for the worst, but Lockheed CFO Bruce Tanner said that sequestration cuts affected the company less than expected.

As Morningstar analyst Neal Dihora candidly put it, “Most of us are in the dark about what’s happening with the sequester.”

We have yet to see the third quarter earnings for Annapolis-based Telecommunication Systems, but the mobile communications technology company landed a $58.3 million contract in August to provide satellite network support services for the U.S. Marine Corps.

TCS also won a $14 million contract with the U.S. Army on Tuesday under the Global Tactical Advanced Communication Systems Contract (GTACS), which originated in 2012. It was the first GTACS contract awarded directly to Telecommunication Systems. The contract vehicle has a ceiling of $10 billion over five years.

As reported in The Daily Record Thursday, the state has announced a program to help businesses land contracts for military construction projects, aiming to reach small and mid-size businesses that might be intimidated by the process of pursuing and winning a contract. This program began with a specific set of projects in mind — 16 contracts that the U.S. Army Corps of Engineers is expected to announce soon.

DLLR Secretary Leonard Howie said at that announcement that he would like Maryland companies to win 75 percent of federal government contracts, rather than the 34 percent they won in 2013.

While some activity, like the TeleCommunications Systems contract, was allocated prior to major budget cuts, Howie is optimistic that Maryland companies will continue to see contracting opportunities related to the national defense.

“There are certain things that we will not be able to avoid doing,” he said.

Prince George’s hospital to be built at Largo Town Center

The new $645 million, full-service hospital planned for Prince George’s County will be built at Largo Town Center, eventually replacing the financially stressed Prince George’s Hospital Center in Cheverly.

The board of Dimensions Healthcare System, which oversees several medical facilities in the county, including PGHC, unanimously voted Thursday morning to choose Largo from a short list of three other locations.

Hospital officials can now seek approval to build from the Maryland Health Care Commission, with an eye on a 2017 opening. The medical complex will include a hospital with between 260 and 280 beds, a trauma center, specialty care and general care. The University of Maryland Medical System plans to operate it.

The $450 million project will be funded through bond financing, with the state and the county each contributing $200 million.

Four locations were seriously considered: Morgan Boulevard Metro Station, Woodmore Towne Center, Landover Mall and Largo Town Center. A search committee narrowed it down to the latter two, and earlier this week, the committee recommended Largo. County Executive Rushern Baker III and other officials then threw their support behind that choice.

The centrally-located Largo site offers immediate access to the Largo Town Center Metro Station and is about a mile from I-495.

Accessibility was a key factor in the decision, officials said, because the new facility will be the major regional hospital. It’s also close to existing commercial development and wouldn’t cost as much as other sites to improve roads and other infrastructure.

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Top 5: ‘You gotta get on a helicopter’

The real estate reporting of Melody Simmons — including the latest development in her work covering the massive $1.8 billion project in East Baltimore — dominates this week’s Top 5 business stories by Daily Record staffers.

Also cracking the list is part of our two-day look back at Oriole Park at Camden Yards as it gets set to open its 20th season. Finally, consider the date when reading the entry that rounds out this list.

1. New lives in future for two former city schools – by Melody Simmons

Baltimore’s Board of Estimates is expected to vote on a proposal to create a new homeless shelter in the former Coppin Elementary School on the Westside. The board is also expected to vote on the sale of the former Columbus School, a historic red-brick building at 2000 E. North Ave. and Washington Street that is vacant and has been vandalized.

2. Little Italy restaurants join State Center suit – by Melody Simmons

Owners of Da Mimmo’s, Sabatino’s, Chiapparelli’s, Caesar’s Den and Vaccaro’s Italian Pastry Shop filed a petition Monday to add their businesses to a list of more than a dozen downtown property owners suing the state to stop the project. The lawsuit, filed Dec. 17, 2010, says the state Department of General Services did not seek competitive bids when it lined up master developers for the project in 2005.

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Mullan Contracting honored for Cristo Rey renovation

The transformation of a former convent in Fells Point has led to two things – a newly renovated Cristo Rey Jesuit High School and an award of excellence for Mullan Contracting Co. for its construction.

Mullan received the award this month from the Baltimore chapter of the Associated Builders and Contractors for work at the school, located at 420 S. Chester St.

Renovations totaled $7.4 million and included the overhaul of the former Holy Rosary convent as well as installation of an elevator system and a three-story breezeway to connect the existing school building to the former convent.

Cristo Rey now has updated classrooms, a computer lab and library for its students, who come from some of the city’s poorest neighborhoods to study under a thorough college prep curriculum. Students also work in part-time jobs in the community, and employers pay the school directly, which funds their tuition as part of the school’s unique model.

The school has an enrollment of 320.

Mullen was founded in 1904 as a general contracting firm that specializes in commercial office, retail, hospitality, healthcare and institutional industries.

Own your own pothole?

Now that winter seems to be loosening its icy grip on Baltimore, potholes are blossoming on local streets, and officials are combing through their scarce budgets to find the money to pay to fill them.

But one town in Germany has come up with an interesting idea: Selling potholes. Niederzimmern, a hamlet in the eastern German state of Thuringia, will repair a pothole and attach an individual’s name to the newly filled hole. The cost for owning a pothole? Only $68.

Niederzimmern Mayor Christoph Schmidt-Rose said there’s interest from the local populace in the plan. “The point is to use a funny idea to find people who can then help us to get our streets back in order,” the mayor told German radio on Wednesday.

While an unfilled pothole begs for attention, one that’s filled is saying, “Someone cares about me.” And, as Mayor Schmidt-Rose observes, people who pay to fill a pothole “feel like they own [it].”

Some years ago, Baltimore officials got people to buy bricks inscribed with their name or the name of a loved one for placement along the Inner Harbor waterfront promenade. That idea proved to be very popular.

So who’s up for owning a personal, inscribed pothole?

A sign of the housing market times

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This comes via the finance blog Calcutated Risk. A developer in Victorville, an eastern suburb of Los Angeles, has paid to demolish a bunch of model homes that were all built, or at least almost-built, but never occupied. The city of Victorville was fining the builder, apparently, for leaving the structures vacant.

The video is pretty shocking (although it would be nice if the cameraman wasn’t talking the whole time about how shocking it is) at face value, but most interesting, I think, as a physical representation of how little demand there is, at least in a place like suburban southern California, for new housing stock. It’s really gotten this bad.

More new houses! Whoopee! (Or maybe not)

Two seemingly unrelated news tidbits crossed my desk today. One is the unexpected report from the Commerce Department that nationally, home construction is up 22 percent. The AP reports that both housing starts and permit applications are higher than economists were predicting, largely due to an uptick in apartment construction.

The other bit of news comes from the agenda (.pdf) of Baltimore’s Board of Estimates, which is likely to approve a measure tomorrow (there are no protests filed on the item as of yet) to amend the city’s SCOPE program to make it easier for Realtors to market blighted houses in Baltimore.

The program, — which stands for Selling City Owned Properties Efficiently, and has been criticized for failing to do just that — pays agents from the Greater Baltimore Board of Realtors an 8 percent commission to successfully sell city-owned vacants to buyers interested in rehabbing them.

This new measure would change the SCOPE program in variety of ways, including allowing homebuyers to make offers on multiple SCOPE properties using one contract of sale, giving the buyer 15 extra days to back out of the contract if inspection problems arise, and two measures that hardly strike me as “efficient”– one that gives the buyer 18 months after to purchase to establish occupancy in the house and one that “[increases the] amount of time to settle from 60 days to 90 days due to numerous extension requests of purchasers as the result of financing issues.”

Reading these two items, it struck me that as we climb out of the ruins of this recession, the home-building industry and local governments might be at odds as far as their main goals are concerned. There are 2,800 houses in Baltimore, for example, that will be left empty by foreclosure, and need to be sold and occupied to keep them from falling into disrepair and damaging their surrounding neighborhoods. There are 30,000 vacant properties that the city is trying to dispose of through its new Land Bank initiative, and anyone who has ever driven through Park Heights, Sandtown or Broadway East can tell you that they’re a big part of the ruin of many an urban neighborhood.

Why, then, is it a good thing to be building new houses? And should the city be encouraged by a jump in home construction, or worried that new housing stock will undermine their efforts to fill the glut that we already have?

A little complaining goes a long way

erdman-ave-sign.jpgA little while back, while reporting on job growth in East Baltimore, I drove past the sign pictured above, outside the shop of A&B Flooring at 5401 Erdman Avenue.

Nosy reporter that I am, I stopped to take a photo, and made a few notes about the name of the business, the location, etc, when suddenly, a guy with shades pulled up in a Nismo 380Z, stepped out of his car and asked me what the heck I was doing.

It turned out to be Ed Ward, owner of A&B Flooring, and after convincing him that I wasn’t casing his place for a burglary or worse, we had a nice chat.

Turns out Ward put up the “Mayor Dixon ‘Please’ Fix & Repave Erdman Avenue” sign about nine months ago, and about two months ago, a representative from the mayor’s office showed up at A&B, dropped off a business card and promised to put in a good word with the mayor’s office. He said he was tired of potholes, especially because he drives a “really nice car.”

Since, the mayor has launched a highly-touted infrastructure improvement campaign called “Sidewalk Sam,” to go with her ongoing road repaving program, “Operation Orange Cone,” and hard-hat crews have begun repaving Erdman Avenue. I saw them at work when I was out there.

Seems a little complaining goes along way.

ROBBIE WHELAN, Business Writer

Great renovations

People who are renovating their homes, or planning to do so, may be featured on a new HGTV reality series that will air this fall.

“My Big Amazing Renovation” is the brainchild of Denver-based High Noon Entertainment. The production company sent out a release saying it’s coming to Baltimore and surrounding areas to film homeowners who are transforming their homes into their dream homes.

In particular, the company wants to hear from homeowners who are:

• Just starting a major renovation;
• Doubling the size of their house;
• Transforming the original space, including the kitchen;
• Planning several unique design projects;
• Updating the exterior of their home;
• Equipped with a set budget and time frame for the completion of the renovation; and
• Passionate about their renovation and eager to share the experience with others.

“The Baltimore-Washington area is on the top of our list,” said Cindy Baggish, a producer with High Noon Entertainment. “It’s just a wonderful part of the country, and a colorful place to be.”

Also, Baggish acknowledged, she’s a Baltimore native — born at Johns Hopkins Hospital — and has relatives in the area that she would love to visit as filming is going on.

The program will begin airing on HGTV sometime in the fall, and the Baltimore-Washington segment — part of the program’s second season — will be televised around the end of 2008 and into 2009, Baggish said.

So if you’re one of the homeowners who fit the above criteria, Baggish would love to hear from you. To be considered, contact her by email or call her at 303-712-3093. You can also go to High Noon’s Web site.

Paul Samuel, Associate Editor

Thieves get copper-happy in HoCo

When I visited Chicago last month, my colleague and I noticed reports of theft of stainless-steel appliances from residential construction sites. My colleague shared that in his hometown of New Orleans, residents often complain of copper pipe thefts from home sites under construction.

Turns out the theft of this valuable metal doesn’t always happen so far from home.

Patuxent Square, a new commercial/residential development in North Laurel, Md., is hiring a night watchman after $10,000 of copper pipe fittings were ripped off at its construction site, the HoCo Times reported last week.

And the Patuxent Square development is just one of many. According to the story, the Howard County Police say copper thefts from county construction sites tripled in October (14 reports) and November (13 reports). At scrap dealers, copper yields about $3.20 per pound.

JACKIE SAUTER, Multimedia Editor