Let’s see now — what kind of a deal will it take to break a 10-year logjam and finally build something on the Superblock site in Baltimore?
For starters, let’s give the developers another extension — eight months this time. The last extension was for six months, but time flies when you’re lining up a $150 million project.
After all, what’s another eight months after a decade?
Next, how about a super-rich payment in lieu of taxes (PILOT) deal? Something like a 95 percent tax break for 15 years with lesser tax breaks for the next five years.
That may sound like a lot of money, but it’s really only $17.6 million according to the Baltimore Development Corp., or twice that much according to the Baltimore Brew, a local news blog. Choose your math.
Now anyone can tell this is not enough of an incentive, so let’s add some state enterprise tax credits for the 217,444-square foot retail portion of the project, which also includes a 296-unit apartment tower and a 650-space parking garage.
Without both the PILOT (which the BDC actually scaled back from the developer’s request) and other tax breaks, BDC President M.J. “Jay” Brodie says the project at West Lexington Street and Park Avenue can’t move forward.
So if you are Mayor Stephanie Rawlings-Blake, what do you get for your trouble when your administration proposes such a deal?
You get a scorching letter from developer David H. Hillman — to the mayor, the City Council and the media — expressing his “extreme dismay and shock” — that’s what you get.
Mr. Hillman’s company, Southern Management Corp., owns and manages nearly 2,600
apartments and 200,000 square feet of retail and office space in Baltimore. His letter says he has gotten some “relatively short-term,” run-of-the-mill tax breaks for his troubles, but nothing like this.
“The city needs to ‘bite the bullet’ and stop granting PILOTs for dubious projects. History has shown that most of them do not work economically and result in diminished tax revenue from other sources due to increased vacancies and more challenges down the road,” Mr. Hillman wrote in his letter.
“If a project needs that much, it’s going to be a failure,” he said in an interview with The Daily Record’s Melody Simmons. “Why? Because the project doesn’t work and they are scampering around. It’s a bad project.”
Mr. Hillman raises some good points. So far, he’s getting few answers. Only Mr. Brodie has responded publicly; the mayor and City Council have been largely silent.
The city taxpayers and Mr. Hillman deserve answers. Once again we ask: What is the city’s strategy and what are its priorities for using PILOTS? Is Baltimore mortgaging too much of the future on risky developments? And who, if anyone, is keeping score while the taxpayers’ tab mounts?