Condos Are Planned For Troubled Building

Brought to you by

Removal of asbestos from Plaza to be costly

Tuesday, May 02, 2006

By Greg Thomas

Real Estate writer

Instead of its moldy, leaky past, the former Plaza Tower office building -- now being marketed as the Crescent City Residences at $450 a square foot -- will be turned into a cutting-edge condo tower with wall-to-wall windows that withstand 200-mph winds, self-contained power generation and an internal water supply large enough to last three weeks after any storm, developers say.

And, of course, there's the view.

That's the word last week from Baltimore developers Edward Giannasca Jr., chief executive officer of Giannasca Development Group LLC, which bought the building for $4 million several years ago doing business as Royal Towers LLC. Giannasca, however, is taking a back seat in the project to two New York developers.

The units will run from 1,080 square feet for $450,000 to a few above 3,000 square feet for several million dollars. Three-quarters of the units will have one bedroom.

But in a market with nearly 700 new condo units announced in the city since Hurricane Katrina, will they sell? Shaun Talbot of the Talbot Realty Group said most of the recently announced projects won't come on line at the same time.

The Plaza "is a big project to absorb," but Talbot said many of the units won't be on line until 2008 or 2009. "It's the largest high-rise so far to go condominium," he said.

He added that the city still is attempting to replace the loss of nearly 200,000 homes, and that includes demand at all price points.

Besides the 197-unit Plaza Tower proposal, other units announced include the 219-unit Vantage Tower in the Warehouse district and the 250-unit Woolworth tower. Additionally, Donald Trump has said he wants to build a 750-foot-tall condo/hotel on Poydras Street.

The new partners, Glenn Rushton and Robert Katz, both of New York, operating as 1001 Howard LLC have changed the project's scope, downsizing it from more than 350 units to 197.

The original needlepoint, multiledged, futuristic design has been scrapped -- with a cleaner glass-and-steel building now in its place.

Rushton said the entire exterior of the white marble and dark glass building will be removed and replaced with a "totally clean look" of wall-to-wall glass and maroon steel. The glass will have a gold tint.

"We think it's going to blend into the skyline" nicely, he said.

Asbestos was sprayed onto the 38-year old building's steel superstructure as a fire retardant before the material became widely known as a carcinogen. The building was vacated because of the asbestos, as well as mold and other safety concerns.

Rushton said the building will be stripped to its steel frame and concrete floors, and the asbestos will be removed. Both he and Green said they are exploring tax-increment financing to help defray the cost of removing the asbestos, which will costs tens of millions of dollars.

Rushton placed the entire construction project's cost at about $120 million.

Giannasca is being sued by other developers involved in a Ritz-Carlton condominium project in Baltimore. The developers claim Giannasca's involvement with the Plaza violated an exclusive agreement that his firm would work only on the Baltimore Ritz. Giannasca denied he violated the agreement. The partners wanted a piece of Plaza Tower from Giannasca as payment for his supposed violation of the agreement.

Rushton and Katz said Giannasca is taking a lesser role in the project because of family issues. Giannasca was unavailable for comment Monday.