Baltimore City Council member Carl Stokes introduced legislation Monday night that would require nearly $16 million be returned to a low-income area and public housing project near Fells Point that developers of the $1 billion Harbor Point project used to gain a $52 million state tax credit.
Stokes, who heads the Taxation Finance and Economic Development Committee, introduced the bill called “Harbor Point Accountability for Perkins Homes” that would make Beatty Development LLC agree to a 30 percent financial commitment worth at least $15.6 million to the Perkins Homes community.
That figure, Stokes said, was “the low estimate of the state Enterprise Zone tax savings” granted to developer Michael Beatty last year by the Baltimore Development Corp. after city census maps were abruptly redrawn by the BDC to include the low-income city project in the Harbor Point area.
The newly drawn maps, described as “social engineering” by a local clergyman Monday, made Harbor Point eligible for the credits.
The state had originally denied the credits to Beatty because the parcel is next to the glitzy Harbor East, developed by Beatty and H&S Bakery President John Paterakis with the help of other city tax breaks, but Beatty appealed, and the BDC redrew the zone maps, which are based on census tracts.
“To do anything less [than Stokes’ proposed bill] would expose the Enterprise Zone application as a sham and would raise questions about whether it is truly in the best interest to continue to support the Harbor Point development,” a statement from Stokes’ office read.
Beatty did not respond to a request for comment on Monday.
Joann Logan, spokeswoman for the BDC, also did not respond to a request for comment Monday on Stokes’ proposal.
A hearing is expected to be held before Stokes’ committee next month.
The action comes as Stokes’ committee is poised to consider another lucrative tax break for Beatty’s Harbor Point development.
The developer, with the full backing of Mayor Stephanie Rawlings-Blake, City Council President Bernard C. “Jack” Young and other city officials, as well as union representatives, is seeking $107 million in tax increment financing bonds for the project.
The TIF would fund an at least $10 million bridge at the foot of Central Avenue, together with infrastructure and parks at the 28-acre site, in order to allow Beatty to begin construction of a 23-story office tower and trading floor for Exelon Corp., the Chicago-based energy giant that purchased Constellation Energy last year.
David Brown, a legislative aide to Stokes, said Monday that residents at Perkins Homes “feel as if they were just used” by Beatty and city officials in order to allow the Enterprise Zone credits.
The Rev. Alvin C. Hathaway Sr., pastor of the Union Baptist Church on Druid Hill Avenue, agreed. At a news conference at City Hall Monday, Hathaway and two other city pastors said they support Stokes’ proposed legislation as part of a coalition of local clergy, the Community Churches for Community Development.
“This is an issue of fairness, economic fairness,” Hathaway said. “We are asking to meet with Mr. Beatty to have an economic inclusion plan drawn up. I do not believe that he would exclude his neighbors when you have used their misery to establish a luxury community.”
Rev. S. Todd Yeary, pastor of Douglas Memorial Community Church, compared the BDC’s redrawing of the zone maps with “social engineering.”
“Perkins Homes was exploited for the benefit of the project,” Yeary said. “That is fundamentally unfair. It is unjust.”
Hathaway said if Beatty rejects their request for a meeting and a community benefits memorandum of understanding, they will protest the development.
“We will take into consideration whatever recourse should be taken to the community,” he said.
Stokes’ news release said the tax breaks for the Harbor Point development are too lopsided for other needy city communities.
“The Harbor Point Development Project is slated for construction on a currently affluent parcel of land that promises to further transform Baltimore’s fastest growing area, Harbor East,” the release states.
“Harbor Point on its own would not have qualified for inclusion in the Enterprise Zone program. To qualify for the program, the project must reside in an impoverished area. By redrawing the lines and including the Perkins Homes Development, the developer became eligible for a $52 million tax credit. Without this resolution, the Perkins Homes community would receive nothing for its inclusion as an Enterprise Zone designation.”