A plan to grant a tax break worth millions of dollars to the developers of the proposed Superblock downtown drew a packed house to a City Council hearing Wednesday evening.
The incentive would allow Lexington Square Partners to have a 95 percent property tax break, in the form of a payment in lieu of taxes, or PILOT, on the $150 million project for the first 15 years with incremental property tax increases over the next five years.
The Superblock project was outlined before the Taxation, Finance and Economic Development Committee as a catalyst for redevelopment for the city’s once-busy West Side.
Harry Dawson Jr., a principal in the Atlanta-based Dawson Co., one of the developers, pledged at the hearing to hire local residents and said that his company has been drafting an agreement to do so. The participants in the agreement include Churches for Community Development, Associated Black Charities, the Maryland Minority Contractors Association and the President’s Round Table, Dawson said.
Wednesday morning, the city’s Board of Estimates voted to approve the concept of the PILOT for the Superblock.
“It’s the PILOT that will give us a chance to stabilize this project,” said M.J. “Jay” Brodie, president of the Baltimore Development Corp., which is requesting the PILOT. “With the PILOT, the project will succeed.”
The PILOT would be worth $48 million, committee chairman Carl Stokes said after the hearing. BDC officials have said that, according to current assessments, it would be worth $17.6 million.
A group of about 100 city residents showed up at the hearing to demand that the developer hire local workers once construction begins.
Dawson told the committee: “I come up here with all due humility. What we are trying to do is give this city something it can be proud of.
In addition to Stokes, council members William Cole, James Kraft, Warren Branch, William Welch and Mary Pat Clarke attended the hearing.
Dawson said that if the PILOT is granted, the developers plan to close on financing by the end of 2012. Demolition of the site — located near Lexington Street, Park Avenue, North Howard Street and West Fayette Street — would begin in the first quarter of 2013, with construction after that.
Dawson stressed that the developers would not be able to go to the bank for financing without the PILOT.
The PILOT would be used to help pay for only a portion of the mixed-use development — 296 residential, market-rate rental units and a 650-space parking garage. The developers have said that they plan to seek other tax breaks in the form of enterprise zone tax credits to help fund other construction.
The local residents who showed up seeking an agreement for local hires at the Superblock project included community activists who have crusaded for the same guarantees at the East Baltimore Development Inc. renewal project in Middle East.
“The BDC has brought in a company from Atlanta to redevelop Baltimore,” said Lawrence Brown, a local activist. “Another project and company in East Baltimore is flailing and failing to hire Baltimore residents at a substantial rate. We need for call-back provisions to call developers back if they fail. No one here opposes the concept of redevelopment, but what we do oppose is developers coming to town and using our tax dollars and not hiring local people.”
Brown and other activists asked the council members to seek a community benefits agreement to guarantee local jobs at the Superblock that would total 50 percent of the work force. That statement brought a standing ovation in the council chambers.
Representatives of Laborers’ International Union of North America said that they had attempted to meet with Dawson Co. representatives to be a part of the agreement for local hires, but so far have been rebuffed.
“We look forward to this inclusionary document,” said Jermaine Jones, the business manager of Local 17 of LIUNA. “We want a document with teeth and one that will work. Let’s make this an open dialogue.”
Nathaniel Royster, a 25-year-old South Baltimore resident, testified that he is looking for work and hoping to get a job at the Superblock.
“I am looking for a job to support my dreams,” he said. “I’ve seen Baltimore grow around me. Us people here [in the chambers], we are the economy. In my pockets right now, I have not a dime. For me to be a city person, I am not able to live in that complex [the Superblock] or shop in the stores there. Why? Because I don’t have a job to do so. Look at us, we are people, we are human beings.”