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David E. Johnson: State Center project is a loser

Laslo Boyd, in his Aug. 8 column (“State Center – no guarantee but worth the risk”) got one thing right – the problem is an “out-of-date state office complex in midtown Baltimore.”

He was wrong on just about everything else.

Yes, the developers’ schematics and concepts sound appealing from a distance, as Boyd makes clear.

But upon close examination, the proposal is a loser for taxpayers, state government and for the city.

Just the initial phase — in which replacement office towers are built for state workers — will cost the city and state a bundle at a time when governments are scrambling to deliver basic services.

For instance, the state doesn’t pay rent to occupy its own buildings at State Center. Yet developers are charging the state sky-high rents amounting to well over $400 million during the 20-year lease.

The state also is building a $33 million garage for the developers. The city, meanwhile, must forgive $20 million in real estate taxes from the developers to help pay financing costs.

Missing from Boyd’s column is any discussion of the legal arguments against this project — the flagrant disregard of Maryland procurement laws enacted during the Agnew and Mandel scandals to prevent favoritism in awarding this kind of highly lucrative contract.

Antiquated, wasteful notions

If Boyd is worried about Baltimore’s economic viability, he should focus on the continuing decline of downtown’s business district, with 2.2 million square feet of vacant office space. That’s where the city and state should devote their time, energy and resources.

The notion of keeping state government agencies congregated in a 1950s-style complex is antiquated and wasteful — especially when there are far better alternatives, such as renovating the existing buildings for a fraction of the cost or relocating agencies to far less expensive space elsewhere in Baltimore.

Then the governor and mayor can come up with a realistic proposal for truly integrating this acreage into the nearby cultural district, universities, medical facilities and residential neighborhoods.

Given recent financial gyrations and economic woes, this is not the time to embark on a heavily subsidized development that will be expensive to taxpayers and, as Comptroller Peter Franchot points out, threaten Maryland’s ability to maintain its Triple-A bond rating.

Yes, there’s no guarantee the State Center project will succeed. Indeed, there are growing indications the only thing guaranteed is a costly failure.

Property manager David E. Johnson is president of Stratford Realty Management Co. and senior vice president of Lexington Charles Limited Partnership, which is involved in a lawsuit seeking to block the State Center development.