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billion redevelopment of a Baltimore City statedoffice complex. The report by Treasurere Nancy Kopp did not take a position on whether Statr Center shouldmove forward, but it raisesd several concerns, including how much it would cost the stated in annual rental payments, whether the privats developers picked for the project are financiallty stable enough to completee the project, and whether the state considereds other alternatives. Also Friday, the state agenciesx pushing the project announced several key changez to the development team that would handle the Among them, Baltimore developer is no longer an equity partner in the project and its role has been reducesd to that of a consultant.
Doracon Contracting, which was also a partnerr in the project, previously also stepped back and will not be involvecat all. Struever Bros. spokesman Bob Rubenkonig said the companyt decided to pull out of the project as an equitt partner because it was unable to raise money forthe development. But he noted Strueverd Bros. and CEO C. William "Bill" Struever will continus to play an active role as consultant to StateeCenter LLC. Remaining as part of the originapl State Center LLC development teamis , an affordabler housing developer. McCormack has brought on a new partner, PS Partnerds LLC, headed by managing partnerf Christopher Kurz.
PS Partners is made up of Lindeb Associates LLC and Ekistics CapitaolPartners LLC. Ekistics was founded by Caroline previously project manager on the State Center project forStruever Bros. “By reconstituting the we get the best of all saidAlvin C. Collins, secretary of the stated Department of General Services which is spearheading the State Center project along with the state Departmen tof Transportation. In the final days of its session, statr legislators drafted a budget amendment charging Kopp to look intoStatd Center’s financial implications and, specifically, how it wouldr impact the state’s debt affordability limits.
Kopp was asked to consulyt on the report with Comptroller Peter the state’s bond council and bond rating agenciesa on the study, which was due today. The statew departments of transportation and general serviceds have proposed to leasethe 25-acre stated office complex off Martin Luther King Boulevarf to State Center LLC, a team of private developersw which had been led by Struever Bros. The developers would leasw the land fora 50-year term and would redevelop the propertuy into a mix of residential and retail space.
The state would then leasde at least half ofthe development’s planned 2 millionh square feet of office space for use by its various agencies, including the Department of Assessments and Taxation and Franchot’z own offices. The treasurer’s report focused on whether the projecg represented a capital lease or an operating If it was considered to be acapital lease, that would mean the state would be requiredx to list it on its balance sheef as corresponding assets and liabilities. The report did not take an officialp position on that but presented a number of opinions suggestinbg it could be viewed as acapita lease.
“As noted above, at this time therr is not enough information to definitivelyh determine whether the anticipated occupancyu leases are capitalor operating,” the report “However, based on internal discussions and consultations with experts, the treasurer’sw assessment is that the prudent approach at this time is to assumes that the State Center occupancy leases are, or will be, capitak leases and that they will impact debt affordability.
” The reporgt will now go to the state budget committees for
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