Duke Realty to Build Major Industrial Park in Baltimore Area

Jan. 27--Industrial developer Duke Realty Corp. has purchased General Motors' shuttered Baltimore van assembly plant and plans a $150 million project to demolish the 70-year-old factory and make way for an industrial park.

Duke, an Indianapolis-based developer of industrial, office, retail and health care projects, disclosed it had bought a 184-acre Baltimore site in a press release about mid-Atlantic acquisitions but did not identify it as the GM property. The statement, which focused on properties in Virginia, said only that the land could accommodate about 2.8 million square feet of new bulk warehouse development to serve port-related business.

A Duke spokesman confirmed that the site was the GM plant, but declined to elaborate on the company's plans.

"We did buy GM' s assembly plant on Broening Highway," said Tom Wiser, a spokesman for Duke, who said the sale closed Wednesday. "We own the site, and will be developing it."

A GM official also confirmed the sale to Duke, but declined to talk about the developer's proposal or how GM made its selection.

"We're very excited about having Duke on board, and we know they'll do a great job," said John K. Blanchard, executive director for GM Worldwide Real Estate.

He said GM and Duke officials expect to release details during a press conference with Gov. Robert L. Ehrlich Jr. and Baltimore Mayor Martin O'Malley planned for Feb. 3 at the plant.

State economic development officials, who appeared caught by surprise by the Duke press release, did not respond to requests for further comment. City officials did not return phone calls.

James P. Lighthizer, a principal with Chesapeake Real Estate Group and the local broker for GM, estimated the redevelopment costs for Duke at about $150 million, including land acquisition, factory demolition, environmental cleanup and construction of warehouse and distribution space.

"We found a lot of port-related users interested in acquiring both warehouse space and land for outside storage and parking at the GM property," Lighthizer said. He said port customers have shown interest in leasing space as well as in buying land on which to build their own facilities, he said.

The Sun reported in September that GM had narrowed its selection of a buyer to Duke and two other finalists. In its request for development proposals, the automaker had not specified uses for the site. But the request discouraged development of housing in such a highly industrialized area, next to Seagirt Marine Terminal on the city's eastern fringe.

At the time Maryland officials said preliminary plans from the finalists meshed with the state's vision for an industrial-office business park that could bring in 3,000 to 5,000 jobs.

Aris Melissaratos, Maryland's secretary of business and economic development, said then that he expected a new owner to demolish the 70-year-old, 3.2 million square foot GM auto plant, which closed in May, and redevelop the site, most likely with about 2 million square feet of offices and distribution and manufacturing buildings.

Melissaratos said that in addition to distribution or manufacturing buildings, redevelopment would probably include about five midrise office buildings on what is now a parking lot along Holabird Avenue and Broening Highway. He said the offices could become the base for port-related management currently housed in the Inner Harbor's World Trade Center, which the state plans to sell, as well as a new headquarters for the Maryland Transportation Authority.

Duke did not mention office construction in its announcement yesterday.

The market will determine whether other uses are considered, Lighthizer said.

"The market will determine that ultimate build-out," he said. "If someone had an office or flex requirement, one would think they would try to accommodate that.

Other industry experts said they expect to see strong demand from warehouse and distribution businesses because of a shortage of industrial land close to the I-95 corridor. The GM site should also be attractive because of its accessibility to the Port of Baltimore, real estate experts said.

"It's a terrific redevelopment opportunity," said John Blumer, a managing director commercial real estate firm CB Richard Ellis in Baltimore. "Everyone in distribution up and down the East Coast wants to jump on I-95, but the I-95 distribution corridor is just running out of land."

In some cases, Blumer said, distribution businesses that serve the Baltimore region are being forced to look for space as far away as West Virginia.

"Being close to the port is just huge," Blumer said. "We think there will be a terrific demand for distribution product in that location."

F. Brooks Royster III, executive director of the Maryland Port Administration, said yesterday he was not aware of Duke Realty's plans for the GM site. Port users, such as importers or exporters, have a great need for distribution centers that move goods through the port of Baltimore, he said.

"We're anxious to see it developed with a maritime aspect," he said. "We hope to see commercial development there that would augment the port."

Duke, founded in 1972, is the largest publicly traded office and industrial property owner in the country. The GM plant acquisition fits into Duke's strategy of expanding into new markets, Denny Oklak, Duke's chairman and chief executive, said in yesterday's announcement.

"The Baltimore transaction will allow us to further expand our plan to capitalize on the growth of port and intermodal distribution activity," he said in the release.

The company owns more than 115 million square feet in a dozen markets, mostly in the Midwest and Southeast. Retail development makes up a small part of the company's business, along with a growing pipeline of health care development. The company's in-house construction company builds all Duke-owned buildings as well as projects for customers thoughout the country.

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