Daily Record investigation: Elected officials short on financial details

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Until recently, the last time an elected official raised any serious questions about the public funding of The New East Baltimore project was in 2003, when it was just getting started.

Hattie Harrison, a longtime state delegate from East Baltimore, wrote a letter to city housing commissioner Paul T. Graziano, raising questions about the city’s plan to divert money from the popular Community Development Block Grant fund to repay a $21.2 million federal loan.

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Diverting about $2 million a year for 15 years to repay the loan with interest could hurt other community projects, Harrison pointed out.

“We believe the further decreases of such funds available to other areas equally in need of redevelopment would be unacceptable,” she wrote.

Harrison’s request that other funds be used to repay the loan fell on deaf ears. Now, seven years later, that $2 million annual payment seems like small change compared to the $212.6 million in government funds committed to the project.

Lack of understanding

When The Daily Record started its investigation last fall, elected officials who represent The New East Baltimore area could not explain the project’s financing, let alone express an opinion about it.

City Council member Carl Stokes, who represents a part of the project’s western edge, said then that he had yet to educate himself on the financing since rejoining the council in March 2010. He is also a nonvoting member of the East Baltimore Development Inc. board of directors.

Since his interview with The Daily Record in October, Stokes has formed a task force to review the city’s use of Tax Increment Financing bonds, which are helping to finance The New East Baltimore.

City Council President Bernard C. “Jack” Young, who represented the area for 14 years before taking his current post in February 2010, was unaware of the federal block grant loan and its repayments.

“I have no thoughts because I wasn’t aware of it,” said Young.

When interviewed last fall, Young said he was unaware that the $78 million in TIF bonds had been sold to support the project. He also did not appear to understand the bonds will be repaid with property taxes.

Instead, Young said he believed the bonds will be repaid with “the money they get off the sale of properties and rents.”

Sheila A. Dixon, the former mayor and City Council president, said she knew the $78 million in TIF bonds was approved for the project, but she did not know they were sold in 2008 and 2009 while she was mayor.

“I didn’t know they took out the TIF. When did the TIF get taken out? Are you sure?” she asked a reporter.

State Sen. Nathaniel McFadden, who also represents the area, did not respond to repeated requests for an interview.

‘I can’t give you an opinion’

Lt. Gov. Anthony Brown, a member of the EBDI board, “has visited the EBDI project no less than eight times for board meetings, tours and other public events. He has had numerous meetings about the project as well,” said his spokesman, Mike Raia, in an e-mail.

Brown declined repeated requests for an interview. Raia e-mailed a statement on his behalf last week.

“Our administration supports EBDI and we believe that the public-private partnership has the potential to benefit and revitalize the East Baltimore community,” the statement said.

Gov. Martin O’Malley also declined repeated requests for an interview over the past three months.

City Council member Warren Branch represents the bulk of the 88 acres known as Middle East that encompasses the project. He calls himself a “freshman” who is “still trying to filter” information about the project since his election in 2007.

Like Stokes, Branch is a nonvoting member of EBDI’s board of directors. He said last fall that he had been to only one or two meetings, due to scheduling conflicts. Branch said he sent a representative in his place.

Though Branch said he has raised concerns about local businesses not getting work from the project, he said he had very little understanding of the federal loan or Community Development Block Grants and was unaware of the TIF bonds.

“I can’t give you [an] opinion on whatever was done and sold before I came into office. As a freshman, I’m still getting aware of it,” said Branch.

“If you ask me anything that happened before my tenure I wouldn’t be able to tell you. I’m not responsible for anything that happened before my watch,” he said. “Whatever they got that loan for, I don’t believe I should be held accountable for.”