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Vote on Superblock tax break is put on hold

A vote on a $22.1 million tax break for the downtown mega-development called the Superblock was put on hold Thursday by a City Council committee because city development officials said they were renegotiating an agreement with the developers.

The Board of Estimates approved the PILOT request for the Superblock on July 11, and the request must now be approved by the City Council.

The planned $150 million development cannot proceed without a payment in lieu of taxes, or PILOT, developer Harold Dawson Jr. told members of the council’s Taxation, Finance and Economic Development Committee.

But Kim Clark, acting president of the Baltimore Development Corp., the city’s quasi-public development agency, told the committee that she was in the middle of renegotiating a land disposition agreement with developer Lexington Square Partners that would include giving them extra time to obtain financing.

The agreement would give Lexington Square Partners exclusive development rights to the mixed-use project, which likely will include residential, retail, office and hotel space. Design plans remain incomplete.

The development group has already been given extensions on the agreement totaling six years, and the latest deadline is Dec. 31, as approved by the City Council. Much of the delay has been because of lawsuits, controversy and the struggling economy.

Councilman James B. Kraft said that another extension may stall the project for yet another year.

“It’s important that this project, this development get done,” Kraft said of the Superblock. “It is not important that it get done with this team.”

The Lexington Square Partners development team is comprised of the Dawson Co., of Atlanta, and four developers from New York.

The PILOT would allow the developers to avoid paying property taxes for 20 years, instead making an annual payment at a reduced amount. In addition, the project is eligible for Enterprise Zone tax credits.

During a two-hour hearing, Dawson told members of the City Council that the development group had agreed to an economic inclusion plan with a goal of hiring 50 percent of all construction workers from city residents. Such a goal was agreed to Community Churches for Community Development, the Maryland Minority Contractors Association Inc., Associated Black Charities and the President’s Roundtable.

It would be overseen by a committee that includes members of the Mayor’s Office of Employment Development.

The council members were told by a city housing official that Housing Commissioner Paul T. Graziano had waived the city’s legal requirement to subsidize affordable housing units in the apartment complex to be built at the Superblock because the city did not have the expected $9 million to pay for subsidies in its budget.

In response, Dawson pledged to make 12 of the 296 planned rental units available to low-income tenants, costing the developer about $1.3 million.

Such concerns were first raised in a lengthy public hearing about the project in July. The city’s Board of Estimates approved the PILOT request on July 11, and the request must now be approved by the council.

Committee Chairman Carl Stokes said the committee would readdress the proposed PILOT on Oct. 18 — after the current negotiations are completed. Stokes said a profit-sharing plan with the city was also being considered by the BDC and would be presented to the committee at that time.