Boardrooms to Bedrooms
Will the Munsey Building Makeover Move Residents Into the Business District?
The Munsey Building has loomed 18 stories over the intersection of Calvert and Fayette streets since 1911. The masonry office building was once home to one of the city's big newspapers, the Baltimore News, and its first big radio station, WEAR, the first broadcaster to air a presidential speech (by Warren Harding in 1922). A year from now, in the vision of Punda and his employer, Struever Bros. Eccles and Rouse, Munsey will be home to young professionals seeking the excitement and convenience of city living.
Struever Bros. is in the process of acquiring the empty building for an undisclosed sum (it last sold for $450,000 seven years ago), as a prelude to a $19.7 million project to convert the old-school skyscraper into 146 modern apartments. A 125-space parking garage will be housed under an adjacent three-story building. At the moment, though, the only traces of the swanky units that will rent from $950 to $1,450 a month are a series of blue lines painted on the floor, demarcating future apartment walls.
"Here's the hallway," project manager Punda says, motioning to the lines tracing along the cement floor. "That's a bedroom over there, and the living and kitchen areas are here. And look what you get to look at: great urban panoramic views through floor-to-ceiling windows."
The Munsey project is one of the latest, and boldest, efforts to cater to a surging demand for downtown housing. The area is maxed out, says Robert Aydukovic, who heads a housing initiative for the business group the Downtown Partnership--the 3,300 existing units of downtown housing are full, and some buildings have waiting lists. The Downtown Partnership, which is doing a study of rising residential demand, contends there's the potential for more than 5,000 new households to be sold in downtown Baltimore by 2006.
"It's becoming cool and hip to live downtown," Aydukovic says, noting that shifting demographics--chiefly an increase in childless singles and couples--is helping to fuel the trend.
To meet this demand, older commercial buildings, the age and layout of which make them unattractive to modern business needs, are being converted to residential use. Numerous such projects are underway or in the planning stages. Southern Management is converting the 81-year-old, 15-story Stanbalt Building at St. Paul and Franklin streets into 201 apartments. A 19th-century former YMCA at Charles and Saratoga streets is being remade into a 36-unit apartment house. The Munsey project, however, is going where no conversion project has gone before: deep into the heart of the central business district, an area where no one currently lives and the sidewalks are empty by 6 p.m.
"We're pioneers," says Ted Rouse, vice president of Struever Bros.' residential- development arm. "But we think it's a very logical location for this type of project. The harbor is just three blocks away, and there's a huge number of people who work within a four-block radius. Residents will bring life to the streets and 24-hour-a-day [activity]."
While the Munsey is structurally sound, converting it into apartments is costly. Since the project is receiving state and federal historic-preservation tax credits, the building's architectural detailing must be preserved. Also, there's asbestos to be removed and new safety and fire codes to meet (those require construction of an additional roof-to-basement stairwell). In addition to the tax break, project financing is bolstered by a $1.5 million low-interest loan from a state fund established specifically to promote office-to-housing conversions. The Munsey also qualifies for 10 years of property-tax reduction through a program administered by the city's Commission for Historical and Architectural Preservation.
Rouse acknowledges that in the long run it might be cheaper to build an entirely new 18-story apartment building. "But it's history and architecture that make the city different from the suburbs," he says. "These assets are worth keeping."
Holding a somewhat different view is Robert Manekin, a principal with the local commercial real-estate firm Manekin Brothers Abeshouse. While Manekin says he supports the drive to increase downtown housing, he says office-to-residential conversions "must be closely scrutinized as to where and how you do them."
"I have serious reservations and concerns about certain projects, such as the Munsey Building," he says. "I believe there is a residential disconnect between that building and that location. There is no synergy with [residential] use and the location."
The Stanbalt Building, about five blocks to the north, makes a better conversion candidate because of its proximity to the historically residential Mount Vernon neighborhood, Manekin says. The Munsey, on the other hand, is "isolated" in the city's financial and legal district, and Manekin questions whether people who work in the area will want to live there as well. "I don't think that proximity to office employment in and of itself guarantees success," he says.
Manekin also says the degree to which the Munsey project depends on public financing in the form of loans and tax relief raises red flags about its viability. "Some old buildings have just outlived their usefulness and need to be demolished for newer, more efficient structures," he says.
More sanguine about the project is Andrew Segal, president of Houston-based Boxer Property. He'd have to be--over the past few years, his firm has acquired nine older Baltimore office buildings, representing some 600,000 square feet of leasable space. Though Boxer's buildings enjoy a 90 percent occupancy rate, Segal says he supports converting some of the older office stock into homes, including the Munsey.
"I think it's fantastic for the city," says Segal, whose holdings include an office building across Calvert Street from the Munsey. "It makes my buildings so much more valuable. The Munsey will introduce people to area, which means there's going to be new restaurants, bars, and coffee places. It's extremely exciting."
Segal says he's seen office-to-residential conversions bring life to the once-desolate downtown streets of Houston. While he has no plans to convert any of his current Baltimore buildings to residential use, he has considered acquiring additional older downtown buildings for that purpose. "I think we'll look back and see the Munsey Building as the catalyst for a tremendous amount of downtown renovation," he says.
That's what Rouse and Punda are betting on. "There's a spirit in older buildings," Rouse says, standing in the Munsey's marble lobby and admiring the brass-fronted bank of elevators. In just over a year's time, he hopes to see residents riding those elevators to new homes in the heart of a previously uninhabited area.
"I really think people will find that the financial district is a desirable place to live--you see it in Chicago, New York, and even Cleveland," Rouse says. "This has been a long time coming for Baltimore."
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