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Baltimore City Council panel passes Harbor Point TIF

A City Council committee voted to approve a $107 million tax increment financing plan for the proposed Harbor Point development, turning aside calls from business leaders to reduce it to about a third of that amount and from protesters to reduce it to zero.

Michael Beatty

Harbor Point developer Michael S. Beatty, center, before the Baltimore City Council committee work session. (Alexander Pyles/The Daily Record)

Council vice-president Edward Reisinger, a member of the Taxation, Finance and Economic Development Committee, called for the vote more than three hours into Wednesday’s meeting, which was marked by heated debate between activists and council members alike.

Committee chairman Carl Stokes, an opponent of the plan, immediately moved to adjourn the meeting, laying down his gavel and walking out to shouts and cheers from the crowd of spectators that packed the hearing.

Councilman Bill Henry, the vice chairman of committee, then tried to motion for a 15-minute recess, which sent the council members to their rule book; however, no one seconded that motion and it failed.

Reisinger’s motion was then put to a vote. With Stokes still absent, Henry abstained. The other three committee members all voted to move the legislation forward to the full council, which is scheduled to meet Aug. 12.

The vote concluded a meeting at which Baltimore activists and council members sparred, sometimes angrily, over the merits of a public financing plan.

As the committee work session dragged into the evening, a city councilwoman called protesters shouting from the audience the “peanut gallery,” escalating the already tense meeting.

The panel resumed its hearing Wednesday evening after a three-week break, during which time Stokes said he sought more information about the ambitious waterfront project from developer Michael S. Beatty and Baltimore Development Corp., the city’s quasi-public economic development agency.

“This committee has been pushed, cajoled … to move faster than, frankly, the committee should move,” Stokes said. He later added that illegally closed meetings held by the city that detailed project financing were “enough to send the whole package back to the Baltimore Development Corp.”

The proposed TIF has produced a stream of skepticism in recent days as city groups scrutinized the deal. The latest concerns were raised by Donald C. Fry, president and CEO of the Greater Baltimore Committee, who in a position paper released Wednesday asked Stokes’ panel to approve just $33.7 million of a $107 million TIF request — enough to pay for Phase I of construction — allowing the council to consider TIF requests for the rest of the project later.

“The Executive Committee of the Greater Baltimore Committee, although supportive of the Harbor Point project, is concerned with the use of the funds and the magnitude of the TIF proceeds,” Fry’s said in the paper.

On Tuesday, the Downtown Management Authority of Baltimore said its board voted to oppose the $107 million TIF because a similar deal in downtown was eschewed in favor of financing for the 27-acre Harbor Point site.

The Fells Point Residents Association also withdrew its support — but did not vote to oppose — for the project on Tuesday, saying members needed more information about traffic and how a TIF would impact city finances.

Before the committee hearing, about 100 labor and religious leaders protested outside City Hall, repeatedly saying the TIF deal was unfair to Baltimore taxpayers.

“They’re going to get this much money, why don’t they spend it on schools?” said Jacqueline Wardell, a nurse technician whose daughter went to school in Baltimore. “Why do we even have to ask for it?”

But apparently not all committee members were persuaded to oppose the project. Hearing disapproving shouts from the audience, Councilwoman Rochelle “Rikki” Spector told Stokes the committee did not need to hear from the “peanut gallery,” drawing a furious chorus of boos and a loud rebuke from Stokes, who told Spector she “started it.”

A TIF lets local governments pay for public infrastructure for real estate projects by borrowing money against future expected increases in tax revenue. If revenue doesn’t ultimately meet projections, a special tax could be levied against property owners — in this case, the developer — within a TIF district to repay debt.

Beatty Development Group LLC wants to build a 23-story office tower at Harbor Point to serve as a regional headquarters for Exelon Corp., the Chicago-based company that finalized its acquisition of Baltimore’s Constellation Energy Group Inc. last year. The undeveloped swath of land juts into the harbor between Fells Point and Harbor East.

The 3-million-square-foot mixed-use development would include residential, retail office and hotel space as well as five small public parks. The BDC expects more than 7,000 temporary construction jobs and more than 6,600 permanent jobs would be created as a result of the development. Officials expect it will take 12 years to build the project.

The site has no public infrastructure, and Beatty has said development there would be impossible without city assistance in the form of a TIF and property tax breaks.

An Allied Signal Inc. chromium processing facility was formerly at the site, which later was subject to a $100 million cleanup. Honeywell International Inc. bought Allied Signal in 1999 and assumed liability for the site.