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Committee OKs restoring Harbor Point to Enterprise Zone

A Baltimore City Council committee voted Wednesday evening to restore Harbor Point to the city’s list of Enterprise Zones, making it eligible for lucrative tax breaks as a $1.5 billion development is set to begin there.

The council’s Taxation, Finance and Economic Development Committee voted 3-1 to restore the waterfront property after a nearly two-hour hearing at City Hall. Councilman Carl Stokes was the only dissenting vote. Councilman William H. Cole IV is at the Democratic National Convention and did not vote.

“It is critical to the future development of Baltimore city that this be put back in the Enterprise Zone,” said Councilman James Kraft, whose district includes Harbor Point. “We need to build the tax base of the city of Baltimore.”

Kraft proposed two amendments to the maps that include Harbor Point in the zone, which were adopted by the committee. Those amendments included deleting Jackson’s Wharf, a waterfront property on Thames Street that is now a surface parking lot, and adding approximately two full city blocks stretching north along Central Avenue to Bank Street.

The resolution is expected to come before the full City Council on Monday evening for second reader.

Baltimore Development Corp. Enterprise Zone expert Todd Dolbin told the committee that the poverty level in the Harbor Point Enterprise Zone was 20 percent — if the Perkins Homes, the public housing project to the east of Little Italy, is included. Dolbin said the demographics of Perkins Homes’ residents make adding Harbor Point legal under criteria set out by the Department of Business and Economic Development to establish the Enterprise Zones.

“It looks like you added the project into the census tract to boost the poverty level,” Stokes said to Dolbin, who denied that had happened after the hearing.

Michael Beatty, president of Harbor East Development Group, testified that the Enterprise Zone was “critical” in order to build out the 27-acre property, which he estimates will take at least 10 years.

“Harbor Point is absolutely a poster child for an Enterprise Zone,” Beatty said. “The responsible thing to do is to redevelop it.”

Community activist Kim Trueheart told the committee that it should reject the request to add Harbor Point into the zone.

“I think there’s nothing critical here,” she said. “There are no low-income poverty folks who are going to benefit from this. I don’t think it’s fair. I don’t think it’s reasonable.”

Harbor Point had been eliminated from the city’s redrawn Enterprise Zone map this spring after updated 2010 U.S. Census figures showed the Harbor East community had grown in size and affluence.

But with the proposal to build out Harbor Point over the next 10 years, Harbor East Development officials filed an application to be included in the new zone map because they say they would be unable to lease office space to potential tenants if they do not have the tax credits available in the zone.

The BDC held a public hearing on the application last month, where the proposal was met with criticism and even a sarcastic display of protest by a group of Occupy protestors who wore mock baseball uniforms with “Tax Dodgers” emblazoned across their chest in large script.

They claimed that H&S Bakery owner and billionaire developer John Paterakis did not need additional tax breaks to build the $1.5 billion project, anchored by a new Exelon Corp. regional headquarters on the city’s waterfront.

H&S Development is also seeking tax increment financing, or a TIF, of up to $155 million for the development, officials have said. The request has not yet been presented to officials at City Hall.

The Enterprise Zones allow state property tax credits through the Department of Business and Economic Development.

Marco Greenberg, vice president of Harbor East Development Group, a part of H&S Development, has pledged that the company would donate $2 million toward local schools as a goodwill nod toward Baltimore. He also said the site would include office space, a Westin hotel and up to 1,000 new rental units as well as a waterfront park.