Leasing, land deals bring some jobs back to E. Baltimore

Daily Record, The (Baltimore), Jul 9, 2008 by Robbie Whelan

At the height of its production in the late 1970s, the old General Motors assembly plant on Broening Highway employed 7,000 workers.

By the time the plant was shuttered in 2005, it had stopped making cars altogether, focusing on vans and coaches, and its work force had been whittled to 1,100.

Now, after a series of leasing and land sale deals at three East Baltimore office and industrial parks, developers, with the help of the city, are trying to bring back some of the jobs that disappeared along with the plant, but they are finding that without a major manufacturer, the area's current trend toward shipping and distribution uses means fewer jobs per square foot of property.

The GM site is now home to Chesapeake Commerce Center, an industrial and office park being developed by Indiana's Duke Realty Corp. So far, two buildings have been completed, with as many as 14 more planned.

Early this year, Duke signed Johns Hopkins Home Care as its first tenant. It will occupy half of the center's first 118,000-square- foot building.

John H. Macsherry Jr., vice president for sales and development with Duke, said Tuesday that Hopkins brought between 400 and 500 jobs to the site.

Last week, Baltimore's Merchants Terminal Corp. announced that it will buy a 13-acre parcel of the 185-acre Duke site. In September, Merchants is expected to begin work on a $25 million refrigerated warehouse facility, bringing 40 additional jobs to the park.

Duke officials have estimated that Chesapeake Commerce Center could draw as many as 3,000 jobs to struggling industrial East Baltimore.

"It's really risky to quote numbers," Macsherry said when asked if Duke would deliver on that figure. "If we do a lot of Hopkins- type buildings we could exceed it, but if we get a lot of Merchant Terminals, we won't."

Meanwhile, local developer H&H Rock Co. is slated to deliver an 82,800-square-foot distribution facility before the end of the year, the first building at its Hollander 95 Business Park, built on the former site of a housing project.

Like Chesapeake Commerce Center, Hollander is being marketed for its proximity to the Port of Baltimore and several major transit arteries, including Interstate 95, Interstate 895, and the CSX and Norfolk Southern railroad lines.

Peter Dudley, a principal with commercial brokers KLNB Inc., which is doing the leasing for Hollander 95, said if the rest of the park is developed as warehouse space, its proposed 500,000 square feet could attract 300 to 500 new jobs.

"Certainly the idea behind [Hollander 95] was attracting jobs," he said. "The current plan is to wait to see what the market dictates.

"There has been a lack of new construction in this eastern market for years. We've got Duke online, we've got our stuff ... and all the sudden you've got a three-year supply of buildings."

Meanwhile, in nearby Holabird Industrial Park, a once city-owned development that was sold to RREEF, a real estate asset group, in 2005, two tenants signed in the last 18 months are expected to bring 70 jobs.

Cinder Express Inc., a port-related shipping company, took 42,000 square feet of warehouse space in December 2006, and last month Georgia-based concrete supplier Aluma Systems relocated to Holabird from Beltsville.

Larisa Salamacha, managing director of industrial development for the Baltimore Development Corp., said Holabird employs about 1,800 to 2,000 people, and that fewer than half of them have jobs directly related to the port. She said since the 1980s, the city has worked closely with port officials to attract jobs to area, but that it's not going to happen overnight.

"[The area] is taking its time, but that's to be expected," she said. "It takes a while to market the area and to get people interested in moving there."

Richard Clinch, a University of Baltimore economist, said the city will have trouble recovering the lost GM jobs because property taxes and operating costs are prohibitively high in Baltimore. As a result, he said, Maryland's concentration of manufacturing jobs is about half the national average.

"The issue of jobs now versus good jobs in the future is a very hard one," he said. "[Developers] can't afford to sit on a property for 100 years waiting for the next GM to arrive. ... It's going to be a long time before it comes back, if ever, to Baltimore City. ... The highest and best use is what the market will bear, and that's distribution."

The result, he said, is fewer jobs with lower wages and worse benefits than the unionized manufacturing jobs of old.

But Jim Caronna, another principal with KLNB, was able to find a bright side.

"I think when you're examining this, you have to look at what would have happened if GM had stayed, because ... there would have been a reduction in work force," he said. "We don't even know if GM is going to exist in five years, and that's pretty scary."