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Baltimore Sun: Loan OK'd for Midtown Apartments

October 01, 2008

Developers of a proposed $75 million luxury apartment building in midtown Baltimore have secured financing and started construction on the project near the University of Baltimore.

The Bozzuto Group, which will develop and manage the Fitzgerald at UB Midtown in a venture with the university and other partners, said yesterday that it obtained a $52 million construction loan from Bank of America and RBS Citizens and $23 million in equity funded by the New York State Teachers' Retirement System.

The 280-unit building will include street-level shops and restaurants and a 1,245-space garage and be built on a university-owned parking lot at Mount Royal Avenue and Oliver Street. The project, near light rail and Penn Station, is part of a larger university-led effort to redevelop the area around the university.

In a difficult economy amid a credit crunch, "our banking and equity partners stuck by us," Toby Bozzuto, executive vice president of Bozzuto Development Co. said yesterday. "They were willing to stay the course and lend on it."

Despite the economic slowdown, Bozzuto said, he believes that strong demand exists for apartments in the city. The Fitzgerald will have a design similar to a boutique hotel, he said, with rents ranging between $1,400 to $1,700 a month.

The project will provide the university with income by leasing the land to the developers. It also will provide much needed parking - some 950 spaces are reserved for the school, said Robert Bogomolny, the university's president. And the project will serve as the commercial heart of UB's urban campus.

"We see part of our mission as developing and supporting the community around us, and by having 280 new residential units, we're going to bring a lot of people into the area. And that in itself will improve the area," Bogomolny said.

The developers are getting a tax subsidy known as a PILOT, or payment in lieu of taxes, in the amount of $12 million over 20 years from the city.

The team expects to complete the parking garage in a year, and begin leasing apartments by summer 2010, with the building slated for completion that fall. Other team members include Gould Property Co., NYSTRS and former Baltimore Raven Michael McCrary.