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Letters to the Editor – 8/19/11

We are writing to correct misstatements made by Mr. David Johnson in his recent guest column in The Daily Record regarding the State Center project.

First, Mr. Johnson states that the State does not pay rent to occupy the obsolete State Center complex. However, the state pays approximately $23 per square foot per year to operate the complex while receiving no ground rents or taxes for the 28-acre site.

Second, he incorrectly states that the State is financing a $33 million garage for the developers.  In fact, the State will own the garage, receive all revenues generated by it and use it to provide parking primarily for State employees.

Third, he incorrectly states that the City must forgive $20 million in real estate taxes that would be owed by the developer. Currently, the site generates no taxes for the City. The project, in contrast, puts the property on the tax rolls and will generate an estimated $50 million in new taxes for the City over the next twenty years. The State has asked that the City allocate $20 million of the new taxes to be paid by the developer be used to fund essential public infrastructure that benefits the City and community.

Fourth, the project has been structured in such a way that the office rents payable by the State in the new buildings would have no impact on the State’s debt ceiling. In contrast, Mr. Johnson’s proposal to build new State-owned buildings would directly impact the debt ceiling calculation. It also would not put the property back on the City tax rolls or generate any new housing, retail, or commercial investment or jobs.

Taken together, the new ground rents and taxes generated by the private option make it fiscally competitive with both the renovation and relocation options while leveraging significantly greater economic growth and jobs.

Finally, the selection of the developer and the approval of the project agreements were done in accordance with state statute under the watchful eye of the Board of Public Works, the General Assembly and the Office of the Attorney General.

We are hopeful that as opponents learn the facts about the project they will see that it benefits the public and does not harm their private business interests, and that they will find a way graciously to withdraw their lawsuit and allow hundreds of unemployed men and women to get work on construction.

For further information, please see the project’s website.

Michael Gaines

Assistant Secretary for Real Estate

Maryland Department of General Services

Christopher Patusky

State Center Project Director

Maryland Department of Transportation