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Insurer, beauty products maker plan to relocate headquarters to Baltimore

Two companies announced plans Monday to relocate to Baltimore from the suburbs, bringing more than 300 jobs to downtown and Locust Point.

The Maryland Automobile Insurance Fund will move its headquarters from Annapolis to the expanding McHenry Row mixed-use project in Locust Point by fall 2015, bringing its 240-person workforce. And Kao USA Inc., a unit of a Japanese beauty products company, will move from Hanover to offices at One Charles Center, with 70 workers.

MAIF, a state-created entity that insures drivers who can't get private-market coverage, will lease two floors to be built atop the Phillips Seafood headquarters building on Fort Avenue.

Developer Mark Sapperstein, who built the adjacent McHenry Row stores, offices and apartments, bought the seafood company's offices and plant in November for $18.4 million. His development firm, 28 Walker, is carving additional office space out of two existing buildings at 1215 E. Fort Ave. by renovating the structures and adding new floors.

MAIF, whose workforce has shrunk from about 600 employees a decade ago because of the recession and increased competition, now occupies less than half of the Annapolis building it owns. The insurer, which also needs less space because more workers telecommute, sought an urban setting with access to highways and amenities such as shops and eateries within walking distance, said M. Kent Krabbe, MAIF's executive director.

The underwriting and claims workers will occupy 60,000 square feet of "Building 2" at the Phillips site, where the company will have signage rights. Construction is expected to be completed by next summer.

"We ask our employees to do their best work, and they deserve a great space," Krabbe said. "You could not ask for a better work, live and play environment than this place."

MAIF will join the technology company Mindgrub, which moved several weeks ago into 13,000 square feet at the Phillips site. Mindgrub had outgrown its space in Catonsville and wanted to position itself to attract young professionals living in the city.

Such moves fit the city's focus on luring the corporate headquarters of strong, growing small businesses, Mayor Stephanie Rawlings-Blake said after a news conference Monday announcing the MAIF headquarters move.

"I would like this to be a trend of businesses locating in Baltimore City," Rawlings-Blake said during the event. "Employers … want to be where their employees want to be. Millennials prefer the lifestyle they're afforded through urban living. They want to bike to work, boat to work," and employers have begun responding as a way to attract and retain talent.

Separately, Kao USA, a subsidiary of Tokyo-based Kao Corp., will take the entire 15th floor in the office tower at 100 N. Charles St., the building's owner announced. The office will serve as headquarters for the Kao Salon Division, which manufactures and distributes products including the Goldwell and KMS California brands. Other Kao brands include Jergens, Biore, Curel and Ban.

"With the improvements and investments made within Baltimore's Inner Harbor and downtown business districts over the past several years, this area emerged as an attractive location for a leading health and beauty company," said Trevor Attenborough, the Kao division's president and general manager, in a statement. "This Charles Center location places us in the virtual heart of Baltimore City and represents the ideal spot as we continue to grow our national presence and gain market share."

One Charles Center, designed by the architect Ludwig Mies van der Rohe and completed in 1963, is owned by Artemis Properties, Inc., the commercial real estate company founded by Peter Angelos, also the owner of the Orioles. The 350,000-square-foot office tower is about 65 percent leased, said David Johnson, Artemis' new executive vice president.

Johnson, who called the Kao lease a "significant win for the city," said the company is focused on finding tenants. The Charles Street corridor has suffered from high vacancy rates as traditional tenants move to newer buildings along Pratt Street and in Harbor East.

"We have a very clear vision and focus of what we have to do here, we just have to roll it out," he said.

Besides MAIF and Mindgrub, tenants at the Phillips site include Under Armour, which opened a call center last fall, and Phillips, which continues to operate its headquarters under a two-year lease with Sapperstein.

The two buildings include 125,000 square feet of office space but will grow to 145,000 square feet with the construction of the two new floors. Sapperstein said it would be an $18 million project.

McHenry Row has proved to be a strong area for shops, offices and housing, he said.

"It's great energy that's allowing me to push on and start McHenry Row Two," Sapperstein said.

Eventually he envisions building another parking garage and pursuing additional development on land occupied by the Phillips plant.

Baltimore Sun reporter Natalie Sherman contributed to this article.

lorraine.mirabella@baltsun.com

Copyright © 2014, The Baltimore Sun
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