Since Hurricane Isabel flooded Baltimore?s World Trade Center in 2003, the state has been losing money on it. That?s nearly four years of taxpayers footing the bill for a building with lots of “potential.”
Despite the financials, acting Transportation Secretary John Porcari recently said the state dropped plans to sell the I.M. Pei-designed landmark, something advocated by Gov. Robert Ehrlich?s administration.
That?s a bad idea for a number of reasons.
Last year, the building, opened in 1977, cost taxpayers $100,000 to operate. The state did not make operating figures available for 2003 to 2005, but spokesman Jack Cahalan said the building lost money. Figures were available for 1998 to 2002, which showed the building generating between $900,000 to more than $1.4 million each year.
The problem with using the 1998 to 2002 figures as a guidepost for future revenue is that the building now is half empty, needs a ton of maintenance and does not have parking. The state will not estimate how much that will cost and has not yet said how long it would take to rehab to Class A office space.
Estimates late last year priced the building in the $80 million range.
The best argument the state can put forward for keeping itis, “The World Trade Center remains a premier property on Baltimore?s skyline and a valuable asset in the state?s portfolio.”
But who?s to say the mantra “(Re)build it and they will come!” will work? It sure hasn?t with the Hilton convention hotel. Newly released figures show convention numbers booked for coming years way down, just as the new 757-room, $300 million hotel is set to open. And it sure hasn?t with the Rocky Gap Lodge and Golf Resort in Western Maryland, which vacuums state coffers each year. Those projects represent different types of properties, but all demonstrate inept planning and management on the part of local and state government.
Besides, there is no guarantee businesses will always consider downtown a top location, even with vacancy rates on the decline in recent years.
Legg Mason Inc. announced last month it will move from its 1970s skyscraper downtown to a new development at Harbor East. And Patrick Turner?s Westport Waterfront project means an estimated 2.5 million square feet of office space will open in the southwestern part of the city as soon as late next year. He?s promised to make it a “second downtown.”
Economist Friedrich Hayek said humans all have limited knowledge. As the above examples show, real estate does not fall into government?s sphere of understanding. It would be best for the state to sell the building as is and let private developers take on the risk of redeveloping it ?and pay taxes along the way.
