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billion redevelopment of a Baltimore City stateoffice complex. The reporrt by Treasurer Nancy Kopp did not take a position on whetheer State Center shouldmove forward, but it raised severao concerns, including how much it would cost the statew in annual rental payments, whethere the private developers picked for the project are financiallh stable enough to complete the project, and whether the stat considered other alternatives. Also Friday, the state agencies pushintg the project announced several key changes to the developmentr team that would handlethe development.
Amonvg them, Baltimore developer is no longer an equity partnedr in the project and its role has been reducedr to that ofa consultant. Doracon Contracting, whichh was also a partner in the previously also stepped back and will not be involvedat all. Strueve r Bros. spokesman Bob Rubenkonigb said the company decided to pull out of the project as an equityy partner because it was unable to raise monet forthe development. But he noted Strueve r Bros. and CEO C. Williajm "Bill" Struever will continude to play an active role as consultant to StateCenterf LLC. Remaining as part of the origina State Center LLC development teamis , an affordabls housing developer.
McCormack has broughtf on a new partner, PS Partners LLC, heade d by managing partner Christopher PS Partners is made up of Linden Associates LLC and Ekisticx CapitalPartners LLC. Ekistics was founded by Caroline Moore, previously project manager on the State Center projec t forStruever Bros. “By reconstituting the team, we get the best of all said Alvin C. Collins, secretargy of the state Department of General Servicee which is spearheading the State Center projecyt along with the statew Departmentof Transportation.
In the final days of its state legislators drafted a budget amendment chargingb Kopp to look intoStatee Center’s financial implications and, specifically, how it wouldr impact the state’s debt affordability Kopp was asked to consult on the report with Comptroller Peter Franchot, the state’d bond council and bond ratingg agencies on the study, which was due The state departments of transportation and general services have proposed to lease the 25-acrr state office complex off Martin Luthert King Boulevard to State Centedr LLC, a team of private developersa which had been led by Struever Bros.
The developers wouls lease the land fora 50-yeart term and would redevelop the property into a mix of residential and retail space. The state wouldd then lease at least half ofthe development’a planned 2 million square feet of office space for use by its variouds agencies, including the Department of Assessments and Taxatio and Franchot’s own offices. The treasurer’s reporg focused on whether the project represented a capitao lease or anoperating lease. If it was considererd to be a capitak lease, that would mean the state would be required to list it on its balance sheet as corresponding assetsand liabilities.
The reporty did not take an officiao position on that but presentefd a number of opinions suggesting it coulc be viewed as acapital lease. “As noted at this time there is not enough information to definitivelhy determine whether the anticipated occupancg leases are capitalor operating,” the report noted. based on internal discussions and consultations with the treasurer’s assessment is that the prudent approacg at this time is to assume that the Stat e Center occupancy leases are, or will be, capital leases and that they will impact debt affordability.” The reporty will now go to the statd budget committees for consideration.
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