Please ensure Javascript is enabled for purposes of website accessibility

Harbor Point TIF plans put on hold following hearing

Plans for a $107 million tax-funded incentive for Baltimore’s proposed Harbor Point development were put on hold for at least several weeks, following a hearing Wednesday evening at City Hall.

Protesters march in front of Baltimore City Hall on Wednesday afternoon. They were there to oppose a proposal that would provide tens of millions of dollars via a tax increment financing subsidy infrastructure for a Harbor Point development project. Beatty Development Group LLC is working on a deal that would build a new headquarters for Exelon Corp. on the site.

An overflow crowd turned out for the City Council’s Taxation, Finance and Economic Development Committee hearing on three proposed bills that, together, would set up what would be the city’s largest Tax Increment Financing package.

Addressing the committee, Harbor Point developer Michael Beatty pledged to be inclusive in the work that would transform a 27-acre site on the waterfront between Harbor East and Fells Point.

“This TIF is a combination of working with the city and a developer and private investors for what will be a public investment,” Beatty said. “We will do everything we can to build a project that is as inclusive as possible.”

After about three hours of testimony, though, committee Chairman Carl Stokes said no vote would be taken until mid-August at the earliest.

“We’re not going to move [the bills] tonight,” said Stokes.

Stokes asked Darryl Doan, a representative of the Baltimore Development Corp., for more documentation that the TIF, which would finance infrastructure and public spaces at the site, is really necessary.

“The Exelon project is not reliant on the TIF at all,” Stokes said, referring to Harbor Point’s signature tenant, which is obligated to build or lease in Baltimore under an agreement with the Maryland Public Service Commission. “If they build it three blocks away, they will not need a penny of infrastructure and we get the tax immediately. It’s crazy.”

Testimony at the hearing centered on the possibility of the jobs the $1 billion project would create, estimated by the Baltimore Development Corp. to total more than 16,000.

“I fully support this project for the jobs it’s going to bring. This is all about jobs,” said City Council President Bernard C. “Jack” Young, who is not a member of Stokes’ committee.

The Rev. Glena Huber, a member of the local activist group BUILD, admonished Beatty and the development team in attendance over the scope of the project.

“We cannot continue to allow developers to secure lucrative deals at the expense of working citizens in the city,” Huber said. “There should be no more subsidy without responsibility.”

Ron Kreitner, chairman of the Westside Renaissance, warned the committee that the TIF package as proposed was “flawed.”

“The project you’ve been handed is what I call contrived complexity, and going through the documents is like peeling an onion,” he said.

With a TIF, the city finances infrastructure through the sale of bonds to private investors. The investors are repaid from the increase in property taxes on the site, which would otherwise go into the city’s general fund.

TIF proponents say the project will create additional revenue for the city, but Kreitner said the diversion of funds will cost the city’s schoolchildren millions of dollars.

“That is a travesty,” he said.

Jonathan Melnick, a Baltimore businessman, also testified that the city was becoming too lopsided in its overdevelopment of the waterfront at the expense of other communities.

“I’m saddened to tell you that you have allowed the development of two cities,” Melnick said. “If you drive down Harford Road, Greenmount Avenue, Belair Road or North Avenue, it’s crumbling beneath your car. It scares me.”

Rob Easter, president of the Baltimore Building Trades Council, a 15,000-member statewide group, endorsed the Harbor Point TIF because of the jobs he said it would bring to his membership.

“We’ve got to get some things going. This project will do it,” he said.

Prior to the hearing, about 100 people from several unions, including United Workers and Service Employees International Union, attended a protest outside City Hall.

United Workers hoped to see city officials shift their priorities from high-cost development deals to funding community resources like recreation centers.

“Most of these deals are already done by the time they come to the table,” said Luis Larin, the leadership organizer for United Workers. “We’d like to see some resources set aside for the community.”

Beatty’s tax increment financing, or TIF, request was made as part of a plan to build a $1 billion project on the city’s waterfront near Harbor East.

The signature structure would be a 23-story tower and trading floor for Chicago-based energy giant Exelon Corp. The site once held the Allied Signal chromium plant and still contains toxic chromium below ground level, covered by a protective cap as part of an environmental cleanup by Honeywell Corp. The cleanup came about as part of a consent decree between the corporation and the Maryland Department of the Environment and the U.S. Environmental Protection Agency.

Honeywell bought Allied Signal in 1999.

Honeywell is preparing to sell the property to Beatty, with the deal expected to close in the fall, Honeywell spokeswoman Victoria Streitfeld has said.

“Honeywell has a cooperative agreement with the developer to ensure that the remedy is protected during construction,” Streitfeld said in a statement. “This work will be done under the jurisdiction of federal and state authorities.”

The TIF request by Beatty Development Group LLC totals $107 million, but over the 30-year term of the bonds, the total cost will be more than $283 million, including repayments, legal costs, debt service and establishment of a cash reserve as an investment security wall, according to records from the Baltimore Development Corp., compiled by MuniCap Inc., the city’s financial analyst.

Daily Record reporter Jason Ruiter contributed to this story.