ANNAPOLIS — Commercial redevelopment of two properties adjacent to Lexington Market can move forward after the Board of Public Works Wednesday gave its approval to two long-term leases.
University of Maryland, Baltimore officials said the lease of the properties will be part of a commercial and residential redevelopment of four contiguous properties, and they said the project will not only benefit the Baltimore but also the university.
“This is property that has long been vacant. When it was acquired several decades ago, it was thought that perhaps the university might have need for it in the future,” said Dr. Jay A. Perman, president of the University of Maryland, Baltimore. “They cost money to keep standing, to maintain. We have an opportunity now to have a developer build on these two properties, which are adjacent to the Lexington Market.”
Focus Development, LLC and Kinsley Equities II, the developers, plan to build retail and residential housing in the area at what is now the Drovers & Mechanics National Bank Building at 100 N. Eutaw Street and the former Sons of Italy Building at 410 and 412 W. Fayette Street. The leases also include surface parking directly next door to the Sons of Italy building.
The university issued a request for proposal for the properties in June of 2014. The proposed projects are located in area of Baltimore the city has been trying to revitalize for years. Those efforts include issuing RFPs for various city-owned properties, launching efforts to renovate the historic Lexington Market and rebranding much of that area as the Bromo Arts & Entertainment District.
Perman said the project would serve a number of goals including “collective efforts to improve the west side of downtown, to return property to the tax rolls, to get more people on the street. It’s good for the university. People are attracted to the University of Maryland, Baltimore as faculty, as staff, as students because they perceive that there is increasing revitalization downtown.”
“This is not only good for the city but it’s very good for the university,” Perman said.
The university will pay off a $7,500 annual ground rent on the property. The developers will enter into a 75-year lease at $90,000 but have the option to purchase the property for $3 million, a price that escalates by 3 percent annually beginning in the third year of the project.
The higher of two state-hired appraisers valued the property at more than $2.8 million.
The total effort is actually two projects for the purposes of some tax credits.
Developers will rehabilitate the bank property, which dates back to the 1870s, using federal historic tax credits. Those credits will require that the properties be developed separately both in a legal sense as well as remaining physically apart.
The Sons of Italy building will require a mitigation agreement with the Maryland Historic Trust before demolition and redevelopment can begin. University officials said negotiations are already underway.
“West side development is something that has been in the works for a number of years and what the university can do helps a lot,” said Lt. Gov. Boyd Rutherford, who chaired the three-person board meeting in Gov. Larry Hogan’s absence.
Staff writer Adam Bednar contributed to this story.