Today’s scheduled approval of $16 million in public funds to underwrite construction of an office building on West North Avenue proposed by P. David Bramble is just the start of what Mayor Brandon Scott has promised the developer of Harborplace.

The complex deal involves more than 150 pages of lease agreements, ground rent contracts and rent schedules pertaining to Reservoir Square, Bramble’s townhouse and apartment project between the Bolton Hill and Reservoir Hill neighborhoods.

Collectively, the contracts commit the city to spending at least $63 million – and potentially more than $80 million – to lease the office building until April 2055 to house the Mayor’s Office of Employment Development (MOED).

• Scott wants city to contribute $16 million for an office building planned by one of his top donors (8/1/24)

The rent money will pay off the interest and principal of $21 million in state construction bonds slated for the project, which, in turn, will allow Bramble to construct the 63,000-square-foot building without putting down any equity of his own.

“The city is not only gifting upfront money for the building. It’s also paying above-market rent to occupy it for many decades,” says a knowledgeable real estate source.

11:30 a.m. UPDATE: The BOE unanimously approved the office building deal with Bramble, with Mayor Scott asking rhetorically, “When was the last time the city built a brand new office building?”

Saying MOED’s current facilities were outdated when he was a student at Mervo – “and I have been out of high school for over 20 years” – Scott exclaimed, “We’re talking about replacing ‘murder mall’ with a brand new office for MOED, for our American Jobs Center!”

Looking at the Fine Print

Under the terms of the agreement, Baltimore would have to lease – but could not own – the building for 42 years.

This comes at a time when the vacancy rate for commercial property in Baltimore’s central business district will reach 30%, the highest on record.

Here are five particulars gleaned from The Brew’s review of the deal’s fine print:

• The building will likely be exempt from city property taxes because the ground lease will be held by a Denver-based nonprofit, P3-Foundation, rather than Bramble’s for-profit MCB Real Estate. (The foundation describes its mission as “leveraging private sector expertise on large infrastructure projects” and “making the world a better place for all of us.”)

• The city should expect to pay $17.95 per square foot in rent starting in 2026, increasing incrementally to $46.23 per square foot by 2055.

• But the agreement says rent could be set at a higher rate – as much as $24.23 per square foot in 2026 – subject to the interest rate on the state bonds.

• MOED will pay for all janitorial, maintenance, water, electric and insurance costs and contribute to a capital repair reserve fund for the building.

• While the “ultimate goal” of the city is to own the building, that won’t be possible until 2067, when the ground lease held by P3 RS Office Holdings LLC lapses and the building is over 40 years old.

At that time, P3 RS Office Holdings has “the option to either demolish the improvements and return the ground to its original condition or surrender the improvement to the city,” according to the agreement up for Board of Estimates approval this morning.

Modernizing Government

In a press release issued Tuesday following Brew reporting about the agreement, Mayor Scott defended the use of city funds.

Consolidating MOED’s activities into one building will have the effect of establishing a “comprehensive one-stop career center, thereby reducing costs, increasing efficiencies and making services more accessible to residents,” the release says.

“The facility will feature a state-of-the-art American Job Center with exciting new career skills-building classrooms, collaborative work spaces and upgraded technology learning labs” that will deliver “two core components of my administration,” according to Scott: “Invest in all parts of Baltimore that have been overlooked for decades and to modernize city government.”

“We are delivering projects we would not otherwise be able to deliver if we attempted to do it solo”  – Mayor Brandon Scott.

While not citing Bramble or his company by name, the release says the agreement will create a new city facility without impacting other capital projects.

“By partnering with the private sector, we are delivering projects we would not otherwise be able to deliver if we attempted to do it solo,” Scott said.

Low Rent Today

With 196 full-time staff and a budget of $43 million, MOED currently operates federally-funded job counseling and training facilities at two city career centers.

It also rents warehouse space and houses its administrative offices and the Youth Works Summer Jobs program at 101 West 24th Street and 100 West 23rd Street along Maryland Avenue.

According to online budget records, MOED paid less than $190,000 in fiscal 2024 in rent and overhead at those facilities, which in the case of the Maryland Avenue property is owned by the city.

MOED Director MacKenzie Garvin did not respond to Brew requests for more information about its rental costs and space needs.

Yesterday’s press release quotes her as saying, “We are excited to launch our new headquarters and continue our legacy of delivering economic justice to Baltimore’s job seekers. This historic investment in workforce development will enable MOED to serve Baltimore City for many decades to come.”

Harborplace Developer

The office building has been described by Bramble as the “anchor” for Reservoir Square, a planned eight-acre development along North Avenue featuring 120 townhouses starting in the upper $300,000 price range, middle-income apartments, workforce housing, retail space and a possible grocery store.

It is Bramble’s biggest real estate venture outside of Harborplace, a now mostly vacant retail center that he plans to raze and rebuild.

The developer says he will need about $400 million in public infrastructure funding to leverage what he says would be about $500 million in private capital.

Because his plan would infringe on a public park, end height restrictions and permit apartment development along the edge of the Inner Harbor, the project requires voter approval in the November general election.

At the Reservoir Square site he purchased a decade ago, Bramble sought to attract private capital for the office building he wanted to erect at Linden and North avenues.

Originally, he planned a 100,000-square-foot structure, but whittled down his ambitions to the 63,000-square-feet space that proved acceptable to city officials.

Bramble has been an active fundraiser and vocal supporter of the mayor, who recently defeated former Mayor Sheila Dixon in the Democratic Party primary, lining him up for a landslide victory in November and a second term.

The developer, his partner Peter Pinkard and other company officials contributed $30,000 to Scott’s political committee in the current election cycle, according to Board of Elections records reviewed by The Brew.

Until last fall, his company’s director of government relations, Leland Shelton, was Scott’s campaign treasurer.

Following The Brew’s story on the city’s plan to subsidize the project, Bramble’s MCB Real Estate issued the following statement:

“For decades, the eight-acre site was a troubled housing complex, known as ‘murder mall.’ When it got shut down, no one else was at the table to take on its redevelopment. We saw a tremendous opportunity to connect emerging and established neighborhoods.

“We tackled the overhaul of the site’s infrastructure, built three new public roads and provided home ownership opportunities for middle-class residents. Ultimately, we are pleased that the mayor sees the opportunity to use city dollars to leverage over $100 million of private capital and bring life back to this disinvested part of Baltimore.”