Constellation Energy Group Inc. has abandoned its plans to build a third nuclear reactor at Calvert Cliffs in Southern Maryland, the company told the U.S. government late Friday.

Constellation (NYSE: CEG) had been waiting months for a loan guarantee from the Department of Energy to help finance the $10 billion project, known as Calvert Cliffs 3. But it said in a letter to the DOE that the costs of the loan guarantee would be “unreasonably burdensome and would create unacceptable risks and costs for our company.”

That puts at risk a project that had been expected to create 4,000 jobs in Southern Maryland. It also calls into question Baltimore-based Constellation’s nuclear joint venture with EDF Group of France.

“EDF is extremely disappointed and shocked to learn that Constellation has unilaterally decided to withdraw from the Calvert Cliffs 3 project,” an EDF spokesperson said in a statement Saturday. “For the past year, EDF has made huge investments of time and resources on the federal loan guarantee process with the Department of Energy for CC3.”

Meanwhile, EDF officials said recently they are considering changes to their U.S. operations, including its partnerships with Constellation.

“Constellation knows that we were at the finish line with the Department of Energy and were making significant progress,” EDF said in the statement Saturday. “Constellation has withdrawn from CC3 in spite of our repeated efforts to substantially decrease their exposure and risk to the project.”

The company went on to say the project “is of monumental importance to Maryland.”

UniStar, the name of the nuclear joint venture between Constellation and EDF, has not officially pulled its application for the loan guarantee, however, Constellation officials said.

In July, Constellation CEO Mayo A. Shattuck III warned time may be running out for the project.

Politicians, donors and University of Baltimore alumni joined faculty and staff at the groundbreaking ceremony Thursday for the new John and Frances Angelos Law Center, a $107 million project on Mount Royal Avenue and North Charles Street.

Construction of the 190,000-square-foot building is expected to be completed in 2012, making UB’s law school the sixth-largest public law school in the country.

Speakers including Gov. Martin O’Malley praised donors such as Orioles owner and UB law alumnus Peter G. Angelos, who contributed $5 million to the project in 2008 as well as an additional $5 million in June. The building is named after his parents.

UB raised a total of $15 million in private funding for the project, which will be used along with state money.

University President Robert L. Bogomolny said the design of the building “is one that embraces the realities of where legal education is going.”

The new center will have 12 levels around a common atrium to facilitate interaction among and between students and faculty. Reflecting the evolving methods for research and learning, the new law library will also house only a third of the print volumes contained in the current library, he said.

“Books will still be important, but there will also be strong emphasis on technology and providing spaces for group study and team projects, reflecting the reality that problem-solving in the modern world is not achieved by individuals in isolation but by collective efforts and diverse talents and multiple perspectives,” he said.

The building will include environmentally friendly components, including energy-efficient LED lights, a green roof that will be watered by rainwater wells and automated windows that will circulate fresh air throughout the structure. Energy consumption will be reduced by more than 30 percent, said Bogomolny.

“Every office — that’s right, every office — will have a window that actually opens,” he told the crowd of dignitaries, students and faculty, who cheered.

The Abell Foundation helped pay for an international design contest for the project. Officials selected an entry by the German firm Behnisch Architekten, working with Ayers Saint Gross of Baltimore. The building will resemble a series of interlocking cubes, according to news reports.

The Maryland Board of Public Works unanimously approved Wednesday the first redevelopment phase of the 28-acre State Center complex on the edge of Mount Vernon.

Under the terms of the deal, the state will lease 500,000 square feet of office space slated to be developed at two new buildings in the development. The state will pay $25.85 per square foot, not including operating costs, beginning in 2014.

The approval is a key step for the private developer, led by Ekistics LLC, to seek financing for the $215 million first phase. Construction is scheduled to begin in the fall.

Phase one will encompass 500,000 square feet of office space spanning two new buildings, a parking garage, 70,000 square feet of street-level retail space, including a grocery store. A parking lot currently sits on the site.

In total, the entire redevelopment is set to take place in five phases and spans 15 years.

Over the next 20 years, state officials say phase one will generate more than $200 million in state and city taxes and another $30 million in lease payments to Maryland.

Once the entire development is complete, the state expects to be $144 million in the black by year 20. This includes a projected $28 million in parking revenue, $30 million in ground rent and shared profits, and $160 million in new state taxes over the first 20 years.

Shattuck said the delay for the conditional guarantee, which is considered crucial to financing the nuclear unit, has begun to “affect the prospects for the Calvert Cliffs project.” And the wait has prompted the Baltimore company to roll back its spending on the project, Shattuck said, during a conference call announcing its second-quarter earnings.

While Shattuck said Constellation and Electricite de France, the company’s partner in the Unistar Nuclear Energy joint venture, are committed to pursuing the project, he warned that time is running out. Executives said they had expected a decision by the U.S. Department of Energy earlier this year.

“We can’t keep going at the rate that we’re going without clarity on the loan guarantee,” he added. “Time is a little bit of our enemy at this point.”

Constellation and EDF have spent $600 million on the proposed nuclear reactor in Southern Maryland, and Shattuck said Constellation plans to fund Unistar for the rest of the year. But Unistar has cut back on hiring contractors and supply chain vendors and has stopped filling open positions, he said in an interview.

The reactor’s construction is expected to yield about 2,100 jobs in the first year and up to 7,670 overall, according to a study conducted by Areva, the world’s largest reactor maker, one of two companies designing and building the proposed reactor for Unistar. The plant is expected to create 400 to 700 permanent jobs.

“I think we’ve all been geared toward having a decision before this point in time, frankly,” Shattuck said. “There is some level of frustration that we haven’t had an answer at this point.”

At the moment, the Energy Department has only enough loan authority to offer one project a conditional guarantee.

Michael Wallace, chairman of Unistar and vice chairman of Constellation, said Unistar’s application is further along in the process than competing projects.

The Maryland project is at the final review stage before the credit board that makes loan guarantee recommendations to the energy secretary, Wallace said.

Ebony Meeks, a spokeswoman for the Department of Energy, said the agency understands Constellation’s frustration, but “our main priority is to be a steward of taxpayer dollars.”

“These loan guarantees are very complex, and we need to make sure they are reviewed thoroughly,” she said.

This year, President Barack Obama announced a conditional loan guarantee for a nuclear project in Georgia, which would be the first project of its kind in decades.

Although there are other variables — including the cost of the project and federal policies affecting carbon prices — that Constellation and EDF will have to consider before making a final decision on the project, Shattuck said the loan guarantee approval is an important milestone.

Meanwhile, Constellation reported that its second-quarter profit rose to $72.6 million, or 36 cents per share, compared with $8.1 million, or 4 cents per share, in the corresponding period last year. Last year’s net income was hurt by losses related to shedding some of the company’s businesses.

Excluding accounting changes, discontinued operations and other special items, earnings from continuing operations fell to 71 cents per share, down from $1.08 per share in the same period a year earlier.

Constellation’s regulated utility, Baltimore Gas and Electric, reported net income of 7 cents per share in the quarter, up from 6 cents per share a year ago.

Constellation shares fell $1.63, or 4.7 percent, to close Wednesday at $33.28.

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Baltimore Business Journal – by Scott Dance Staff

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The slots parlor, dubbed Hollywood Casino Perryville, is set to become the first of its kind in the state since the one-armed bandits were legalized in a 2008 referendum.

The casino’s owner, Penn National Gaming, has been working on hiring 350 people to staff the casino. The contract approved Wednesday allows the state to move forward on buying the slot machines that will fill the facility.

Wyomissing, Pa.-based Penn National (NASDAQ: PENN) said last month preparations were moving swiftly enough that the project could open ahead of schedule. It was set to open in the fourth quarter of this year.

The contract was broken up among six contractors, as follows:

• $21.6 million to IGT;

• $12 million to Bally Gaming;

• $9.6 million to Spielo Manufacturing;

• $6.2 million to Aristocrat Technologies;

• $700,000 to Shuffle Master; and,

• $300,000 to KGM Gaming.