The Baltimore City Council’s vote Monday night for the sale of as much as $125 million in tax increment financing bonds for infrastructure, parkland and other improvements to help construct the controversial Harbor Point development will set into motion a two-month investigative period on the entire deal, city officials said.
A meeting has been set for Tuesday afternoon between a development team that includes representatives of developer Michael Beatty’s Harbor Point Development Group, the Baltimore Development Corp. and the city’s Department of Finance to establish guidelines for the TIF — the largest such incentive of its type in Baltimore, said Stephen M. Kraus, chief of the Bureau of Treasury Management in the finance department.
“Over the next few months, we’ll look at everything in earnest,” Kraus said Monday. “That’s when we’re going to drill down on contracts, on financials, and actual details of costs.”
Kraus said there was no timetable for the first series of TIF bonds to go on the market for sale for the Harbor Point project. Instead, he said the due diligence period would include receiving detailed information on Beatty’s financial backers and partners for the $1 billion project, to be built between Harbor East and Fells Point at the site of the former Allied Signal chromium plant.
However, after the vote, Beatty said he plans to break ground on Harbor Point in the fall.
“It’s been a challenging process,” Beatty said. “But I think what we’re excited to do is creating jobs, building buildings and getting this city moving forward.”
Beatty’s partners have not been made public to date, Kraus said, despite a request for such information by members of the City Council during a series of contentious hearings before an Aug. 12 vote on the legislation authorizing the TIF.
About $60 million of the TIF funds will be spent to build new parks on the Harbor Point site, Beatty has said. Other expenditures for the bonds include $10 million to help pay for a new four-lane bridge that will link Central Avenue to the site and $15 million for infrastructure.
Beatty has said he planned to buy the first series of TIF bonds for the project.
With interest and gross debt service payments and fees, the total repayment costs of the TIF for Harbor Point over a 34-year period are estimated to be more than $283 million, a group of financial analysts hired by the city said.
An attempt to place three amendments on the bond legislation by Councilman Carl Stokes failed. One would have required greater transparency for job creation and economic impact data at the project, another would have required a new hotel worker labor agreement during Harbor Point construction, and a third sought a city match of $3 million for an inclusionary housing grant pledged by Beatty at the site once housing is constructed there.
Stokes and Sharon Green Middleton were the only council members to vote against every piece of the bond legislation, which was broken into three parts. Bill Henry voted against one piece.
Mary Pat Clarke abstained from the whole vote because her husband has a business arrangement with Beatty.
Mayor Stephanie Rawlings-Blake thanked Council President Bernard C. “Jack” Young for an “incredible amount of leadership” in steering the TIF legislation through several controversial hearings.
“This is a great project for the city for a long-blighted, vacant site on our city’s waterfront,” Rawlings-Blake said.
She said the project will ultimately create 17,000 jobs.
As a show of protest after the vote, James Crawford Jr., of the advocacy group Bmore Housing for All, stood up and said to the council: “I turn my back on you because you turned your back on the people.” He then turned around, facing away from the council members.
The first building planned for Harbor Point is a 23-story tower for Exelon Corp., the Chicago-based energy giant that acquired Constellation Energy Group.