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Old GM site to employ 3,000

THE BALTIMORE SUN

The closed General Motors van assembly plant in East Baltimore will be revived as a vast industrial park that will boost the port of Baltimore and employ at least 3,000 workers, injecting new life into the now moribund site.

Duke Realty Corp., the Indianapolis-based industrial developer that bought the 184-acre site Jan. 26, plans more than a dozen warehouses for port-related business in addition to a possible office complex and manufacturing/research and development facility, a Duke official told The Sun yesterday.

Duke, along with state and city officials, is to announce the plans for the $150 million to $200 million investment at a news conference at the Broening Highway plant today.

"It was so painful to see the GM plant close, but this is one of the best sites in the country, and it's ready for development and hopefully will allow Baltimore business here to grow while at the same time attracting new industries," Baltimore Mayor Martin O'Malley said yesterday.

General Motors and Duke, which was selected from about 20 bidders, appear on their way to fulfilling the state's vision for creating a base for job growth along a waterfront where industrial land has given way to demands for waterfront housing and other uses, state officials said.

"GM respected and heard our vision for the site," said Aris Melissaratos, the state secretary of the Department of Business and Economic Development. "Their vision is very similar to our vision. Duke has put forth a strategy that is good for the city and good for the port and for rebuilding jobs for that region."

Plans for the site's rebirth come nine months after General Motors shut the 70-year-old plant. The situation is in sharp contrast to that of other closed facilities around the country that have languished for years.

GM officials said last summer that they had never before seen so much interest in a shuttered plant from developers, who were drawn by its large size and strategic location next to the port of Baltimore, with access to Interstate 95 and rail, and close to Baltimore's downtown business district.

Duke, the largest publicly traded office and industrial property owner in the country, wanted to pursue redevelopment in port cities and had considered investing in projects in every major and minor seaport in the country, H. Andrew Kelton, a Duke senior vice president, said yesterday.

"The GM site was the best real estate site we found," Kelton said, adding that the site's attributes made the bidding process fiercely competitive.

"The fact that there is so little large-tract available land close in to existing business and such limited industrial land in that area -- to be able to pick up 180 acres, that's once in a lifetime. You don't get those opportunities," Kelton said.

Kelton and GM officials did not disclose the purchase price for the plant.

Duke plans to demolish the sprawling van assembly plant and do other site work this year, and begin constructing the first warehouse in 2007, Kelton said yesterday.

The developer said preliminary plans have generated strong interest from potential tenants, many of which are expected to be companies and distributors related to the port of Baltimore.

"There's a tremendous amount of interest," Kelton said. "We get a lot of calls every day."

M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's development agency, said the BDC has offered to assist Duke with marketing to and lining up tenants.

"There's no other site like this in Baltimore of that size and that location," Brodie said. "We should be going after Fortune 500 companies."

Duke, a real estate investment trust that builds mainly industrial and office properties, anticipates building up to 3 million square feet of space over the next decade.

Much of the development will be bulk warehouse buildings that cater to port-related businesses and distributors, typically large buildings with high ceilings and multiple loading docks.

"It would seem that this would help address some of the concerns that have been addressed by the port of Baltimore and their concern about a lack of available land for businesses that use the port," said Donald C. Fry, president of the Greater Baltimore Committee, a business and civic leadership group. "The fact that Duke is involved, recognizing their prominence in the office and industrial properties, demonstrates that this Baltimore region is hot when it comes to economic growth."

Kelton said the developer is confident that the project will attract industrial users and said it will consider offices, and research and development facilities based on market demand.

Duke is in discussions with state officials about building offices in which state agencies would be tenants. Melissaratos has said he envisioned about five midrise office buildings on what is now a parking lot along Holabird Avenue and Broening Highway. That could become the base for port-related management now housed in the Inner Harbor's World Trade Center, which the state plans to sell, and a new headquarters for the Maryland Transportation Authority.

A conceptual master plan, which is subject to changes based on market demand, shows plans for 16 buildings, ranging from 100,000 square feet to 600,000 square feet. It also shows office buildings on the Holabird Avenue parking lot and another parking lot east of Broening Highway as a continuation of the Holabird Business park, with some manufacturing.

"The state is interested in some office space, and we are in discussions with them," Kelton said.

Real estate experts say such a strategically located site should work well as an industrial park at a time when demand is strong but industrial space is scarce.

"There is not that much land for industrial development," said J. William Miller, a senior vice president of NAI KLNB, a Towson commercial real estate services firm. "This area, especially with its proximity to the port, is going to get a lot of attention. Right now, there appears to be a number of users that do work at the port that are looking for space."

The new industrial park will likely attract out-of-state companies. However, it will likely be in direct competition for tenants with similar types of industrial parks that have been built recently in Harford County, Miller said.

Duke had targeted the Mid-Atlantic as an area to expand into and doesn't plan to stop with the acquisition and development of the GM site, Kelton said.

"We'll be developing this site and looking at other opportunities," he said. "We see the Baltimore-D.C. market as one where we will be able to continue to grow and add."

Kelton said the company may have had an advantage in the competition for the Broening Highway site because it has an in-house construction division and has built distribution buildings for GM in the Midwest. Duke has also agreed to handle the bulk of the environmental cleanup on the site.

"Obviously the economics were there," Kelton said. "And they wanted comfort that someone would develop it and do what they said they would do. We have a track record with GM."

lorraine.mirabella@baltsun.com

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