Daily Record Business Writer//September 23, 2013
//Daily Record Business Writer
//September 23, 2013
Baltimore County’s first taxpayer-funded incentive for a large development — an $80 million tax increment financing package to be presented and backed by the state — is being prepared to help finance infrastructure costs at the $700 million Metro Centre development in Owings Mills.
The TIF bonds are to be sold by the Maryland Economic Development Corp. and will stretch over 40 years in repayment to total $112 million, with interest and principal fees, said developer Howard Brown, who is spearheading the Metro Centre project near the station operated by the Maryland Department of Transportation.
In turn, MEDCO will own a $40 million multi-level parking garage that the TIF will fund, and a company owned by Brown will manage and operate it, he said Monday.
“The purpose is to finance infrastructure,” Brown said Monday. “It will pay for roads, utilities and parking. The bottom line is that taxes generated from the site will service the debt for the TIF.”
Tax increment financing has been used in Baltimore as a means to help spur large private development of nine projects, including the redevelopment of 88 acres in East Baltimore by East Baltimore Development Inc., renovations to Mondawmin Mall, and new developments at Clipper Mill, Locust Point and Belvedere Square.
This summer, the City Council approved a controversial $107 million TIF for Harbor Point, a $1.8 billion development on the city’s waterfront.
TIF bonds help pay for infrastructure and other public space for private developments. They are sold to private bond holders who are then repaid over a period of decades with diverted property taxes.
A parking garage at Metro Centre will be the first of two phases that the county TIF bonds will underwrite, Brown said.
The garage is currently under construction with development costs being fronted by Brown, to be reimbursed after the TIF bonds are sold, he said. It is adjacent to a multi-story building that houses a new campus for the Community College of Baltimore County and a large Baltimore County Public Library branch, both of which opened this past year. When finished, the garage will offer free parking to patrons of both, as well as Metro Centre’s retail and business patrons.
Brown said the TIF will pay for work on the south campus of the Metro Centre development.
When completed in about seven years, Metro Centre will hold 300,000 square feet of retail space, more than 1.2 million square feet of commercial office space, 1,700 residential units and a hotel with 250 rooms, as well as the public library and community college. Last week, Brown and state and county officials attended a ribbon cutting for the development’s first of two apartment buildings, Metro Crossing.
The project has been designated a “transit oriented development,” which made it eligible for a special MEDCO-backed TIF approved by the General Assembly in 2009, said Robert C. Brennan, executive director of the state’s economic development agency. This is MEDCO’s first transit-oriented-development TIF, he added.
In Baltimore County, the specifics of the TIF were set forth by former County Executive James T. Smith Jr., now Maryland’s secretary of transportation, in legislation approved by the County Council in October 2010. That bill specifies that as much as $135 million could be spent in TIF bonds for the project.
The County Council must consider an amendment to that legislation this fall before the bonds can be sold, Brennan said. A draft of the amendment was presented to MEDCO in early July, he added.
County Councilman Kenneth Oliver, whose Fourth District includes Metro Centre, said Monday he was unaware of any pending amendments to the original legislation for the project’s TIF.
“I thought the thing was finalized,” Oliver said. “It was so long ago. I thought it was approved, but I may be wrong.”
A spokeswoman for County Executive Kevin Kamenetz did not respond to a request for comment on Monday.
Jeff Wilke, assistant director of bond financing for MEDCO, said Monday that details for the TIF were still being worked out by the county, the state and the developer.
“We’re in a holding pattern now,” he said.
He added that MEDCO officials had no idea when the bonds would go to market or what the interest rate would be.
“There are a lot of things to be finalized between the county, the developer and MDOT (the Maryland Department of Transportation),” Wilke said.
The 2010 legislation establishing the Metro Centre TIF specifies that the TIF bonds must be sold by Dec. 31, 2013, or the special taxing district and designation set up by the bill expire.F