HCFA STAYING IN BALTO. CO. Agency runs Medicaid, Medicare. City, county fought for $100 million project.


The headquarters of the U.S. Health Care Financing Administration will stay in Baltimore County, as the developers of a Woodlawn site today won an estimated $100 million contract to build a new home for the agency that runs the Medicare and Medicaid programs.

The government's decision closes a pitched fight between the county and Baltimore City, where a competing development team wanted to build a new headquarters just north of Oriole Park at Camden Yards.

The $100-million plus project will be far bigger than any single office building in Baltimore built during the 1980s, which was a boom time for commercial real estate. The 875,000-square foot complex proposed by the winning team of Boston-based Boston Properties Inc. and Towson-based James F. Knott Development Corp. is expected to be the Baltimore area's biggest office deal of the early 1990s, a time when the commercial real estate industry has been hit even harder than much of the rest of the economy.

"Isn't it terrific? ... It's been a long haul," said James F. Knott, chief executive of Knott Development.

On the other side of the decision, there was disappointment. "We're big boys," said Robert Minutoli, vice president of the Rouse Co. of Columbia, which had proposed to develop the city site jointly with Whiting-Turner Contracting Co. and the Henson Co., both of Baltimore. "On to the next one."

John Thompson, a spokesman for the U.S. General Services Administration, said the suburban proposal was offered for less money than the downtown site -- Knott and Boston bid $122.6 million, Mr. Minutoli said. It also scored higher on GSA's evaluation criteria, which included building quality, impact on employees, experience of the development team and the "national headquarters identity" the competing designs could offer, Mr. Thompson said.

Mr. Thompson hedged slightly when asked if the decision, which had been due by Aug. 30, had been made two weeks early because the competition was not close.

"It was probably clearer than we thought it would be, and as such, didn't take as long to evaluate," he said. The GSA manages real estate affairs for most other federal agencies.

The agency's 2,800 employees vehemently protested the thought of moving downtown. In a campaign that played on decades of emerging divisions between cities and suburbs, they complained that a move downtown would subject them to greater traffic hassles, parking problems and crime -- even though studies commissioned by the GSA disputed or disproved many of the employees' claims.

Mr. Thompson said the employees' objections were a small part of the decision.

City officials had said before the decision that they hoped attracting HCFA would cement Baltimore's reputation as a center for life-science oriented research and business, a key element of the city's economic development strategy.

But Mayor Kurt L. Schmoke's initial reaction, offered through a spokesman, did not address that point.

"Obviously I'm disappointed, but I do think the GSA is favorably disposed to Baltimore for future sites of government buildings," said Mr. Schmoke's spokesman, Clint Coleman, in a statement attributed to the mayor. "We're pleased HCFA will remain in the region and we will continue to work with GSA to attract federal offices to the city."

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