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A hefty wager on the future of Hunt Valley

Making one of the largest redevelopment proposals in the Baltimore area in recent years, local developers yesterday announced a plan to transform a collection of old industrial buildings in Hunt Valley into a $60 million corporate campus.

The project is one of the few to go forward in suburban Baltimore since the market for office space cooled with the economic downturn three years ago.

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It signifies optimism in economic recovery and also in northern Baltimore County's Hunt Valley. A major shopping-center remake and other projects there portend renewed interest in an area where high incomes and proximity to Interstate 83 haven't always guaranteed development success.

Principals at MacKenzie Properties Inc. of Lutherville and Kinsley Properties of York, Pa., plan to renovate two of the five industrial buildings they're purchasing into offices and build a new four-story office building, for a total of nearly 600,000 square feet. The other three industrial buildings are leased and aren't to be renovated for now.

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"We're hearing from our tenants that they want to be in the central corridor, that's Dulaney Valley Road to I-83," said Robert J. Aumiller, MacKenzie's executive vice president. "This is a unique opportunity to acquire land in that corridor that can be redeveloped into offices."

The joint-venture partners report having discussions with several prospective tenants who they said are planning expansions, but none have signed on. The developers expect work to begin in the fall and take three years or more to complete. Work on the new office building will not likely begin until an anchor tenant is found, they said.

Brokers in general say the market is headed for a slow recovery and businesses are not out in force looking to move and expand.

Office vacancies, including space for sublet in the Hunt Valley area, remain at more than 15 percent, which is about average for the Baltimore market. But developers typically do not build office space until vacancies dip below 10 percent.

Aumiller pointed out that some of the property bought for this redevelopment, which is partially vacant, is counted among those statistics.

Their project may be well-timed: A mid-year report from Colliers Pinkard real estate services company says the office-leasing market is showing signs of a rebound. The market around Baltimore-Washington International Airport is the most active, aided by leasing from defense-related businesses and government. Commercial real-estate activity around Hunt Valley remains rather flat, the report said.

The McKenzie-Kinsley partners bought their land and buildings from Finova Capital and Northrop Grumman Corp., which no longer used the properties and leased some of the space to others. Financial details of the transaction were not disclosed.

The property was not for sale, but the developers got the idea for the corporate campus about 18 months ago. MacKenzie has developed neighboring parcels.

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"We were standing in the parking lot and thought this really would make a nice office campus," said Charles W.S. Mackenzie, a company vice president. "There's only so much in Hunt Valley available. North Baltimore County is now a desirable place to live, and we'll be able to provide the whole corporate campus culture."

The Northrop Grumman buildings, built in the late 1960s and early 1970s, are not the only buildings getting makeovers in the area.

Hunt Valley Mall, more than 20 years old and out of favor with shoppers, will become a new town center of shops and restaurants. A 400-unit apartment complex was also built nearby.

Millennium Chemicals Inc. said in July that it would consolidate and move its corporate headquarters from New Jersey to Hunt Valley, where 200 employees are already stationed.

Verizon Communications Inc., MBNA Corp., McCormick & Co. Inc. and MCI Corp. also have offices there.

Debbi McCallam, a spokeswoman for Northrop Grumman, said the company had moved its employees to other Maryland locations in the late 1990s as a cost-saving measure.


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