By Ben Murphy
Baltimore Watchdog Staff Writer
Gov. Larry Hogan Monday announced plans to move 3,300 state employees from 12 state agencies into downtown Baltimore to boost the pandemic-devasted economy of Maryland’s largest city.
The governor said the state has been focusing its efforts on vaccine distribution since the beginning of the year but is now turning its attention to addressing the many economic problems the coronavirus pandemic has brought to communities throughout Maryland.
“For the last four months, we have been focused on putting shots into arms,” Hogan said during a press conference at McKeldin Plaza near the Inner Harbor. “Today we are here to talk about a shot in the arm for the recovery and revitalization of downtown Baltimore.”
To put the plan in motion, Hogan announced that he is seeking proposals from commercial landlords for office space that can house the state agencies.
The Maryland Department of Human Services headquarters will be the first to relocate, bringing its 700 employees to the downtown business district.
The second agency being moved into the district will be the Maryland Department of Health and its 1,200 employees, Hogan said. The governor called this move an “important first step.”
“These two agencies will bring the first of nearly 2,000 workers of what will become 3,300 workers total to this downtown area, which will be a big boost for the revitalization and transformation of downtown Baltimore,” Hogan said.
Hogan said that central business district office vacancies were up 34 percent in the last 11 months, adding that major companies like T. Rowe Price Bank of America has announced plans to relocate to other parts of the city. The hope is that the movement of these state agency workers will help stabilize the economy of the downtown area.
The initial “request for proposal” from the state is seeking about 105,000 net square feet of office space for the new DHS headquarters. DHS serves about 1 million Marylanders each year and is the state’s primary social service agency for protecting those in economic need.
According to a recent marketing report by the Newmark Group Inc., a major commercial real estate advisory firm, the Baltimore metro area saw an additional 359,250 square feet of office space go vacant in the first quarter of 2021. It was the fourth consecutive month of occupancy losses in the Baltimore area since the beginning of the pandemic, the report said.
In addition, Newmark reported that that the average rent for office space increased from $24.18 per square foot at the end of 2020 to $24.49 in the first four months of 2021.
Hogan said he worked with Senate President William Ferguson, D-Baltimore, and the state legislature to budget $50 million to help pay for the relocation of the 12 state agencies.
“It is my hope that as we move forward, we can provide modern and vibrant workspaces for our hardworking state employees, and that this investment will spur additional economic and civic revitalization and transformation of downtown Baltimore,” said Lt. Gov. Boyd Rutherford, who accompanied Hogan and Ferguson at the press conference.
Baltimore Mayor Brandon Scott issued a statement following the press conference in which he said he appreciates the efforts to revitalize downtown but hopes other neighborhoods in the city do not suffer.
“While this timely investment seeks to retain jobs and stimulate absorption in the downtown office market,” Scott said, “my administration will work with stakeholders to ensure surrounding neighborhoods can also benefit.”