Seawall embarks on $26M overhaul of Lebow Bros. building
By James Briggs, Baltimore Business Journal, February 2012
"Seawall Development Corp. has begun work on a $26.5 million project to convert the former Lebow Bros. Clothing Co. building into the Baltimore Design School.
The Baltimore Design School, a public middle and high school that includes sixth through 12 grades, is operating at 1101 Winston Ave., but plans to move to its new home in 2013.
The project is the result of a creative financing package that includes $23.5 million in taxable bonds, which were sold in December, and $3 million in state historic tax credits, said Steve Arnold, vice president of Columbia National Real Estate Finance LLC.
“We went out and structured the bonds based on upon the credit of the tenant (Baltimore City Public Schools),” Arnold said. “Based upon the numbers, they’re getting maximum proceeds so the rent will go to cover the debt service and that’s pretty much it.”
Seawall purchased the building with bank financing for about $2 million and sold it to a nonprofit organization, Fashion Architecture and Basic Design School Inc., which was created to be the landlord. BCPS will pay $1.6 million per year for 30 years, which Arnold said will pay off the building’s debt.
Jon Constable, a project manager for Seawall, said the financing could become a model for future public-private partnerships.
“They’re leveraging it like the private market would,” Constable said.
The four-story building, which will consist of 113,787 square feet when completed, has been vacant since Lebow Bros. closed in 1985. The building, in what is now called the Station North neighborhood near Penn Station, was constructed in 1915.
The project began a few weeks ago and should be completed by March 2013, Constable said.
“Right now, we’re doing environmental abatement and [demolition], which we’ve pretty much finished, and we’re starting the concrete restoration,” Constable said. “The full-fledged construction starts March 1.”
The building, which Constable said consists of about 60 percent windows, offers unique design and construction opportunities.
Baltimore's Southway Builders Inc. is the general contractor, and Baltimore-based Ziger-Snead Architects designed the project.
“The building back in the day tapped into ground water, so you had this water geothermal system to condition that air,” Constable said. “Basically, you have an extremely state-of-the art 100-year-old HVAC system in that building. It’s really cool stuff.”
Such elements, he said, will make it a one-of-a-kind home for BDS.
“Yeah, we’re going to have classrooms,” Constable said, “but we’re also going to have an insane media center and studios and workshops that are going to be unique to this building.”