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UMB site seeks designation for tax credits

Baltimore’s first proposal for a relatively new type of economic development zone is for a really small area. In fact, the proposed zone consists of a single address.

The University of Maryland, Baltimore wants to create a RISE Zone (Regional Institution Strategic Enterprise Zone) that would be specific to the property at 873 W. Baltimore St. in the University of Maryland BioPark. The designation gives the project access to real property tax credits, income tax credits for hiring employees and priority consideration for Maryland Department of Business and Economic Development incentive programs.

“The intent of the RISE Zone is to … harbor the institutional assets of a qualified institution, and by that I mean an institution of higher learning, a college, or university, or post-secondary educational facility. It’s to leverage those assets in the community and attract private employers,” said Mark Vulcan, DBED’s program manager for tax incentives.

Baltimore-based Wexford Science and Technology proposes building an eight-story structure on the property. The planned building includes labs as well as office space, and Cambridge Innovation Center has signed an agreement announcing its intent to lease more than 100,000 square feet, according to Baltimore Development Corp. officials. That space would be used as an incubator with a goal of launching biotech businesses.

The company is seeking $17 million in Tax Increment Financing from the city.

A spokesman for Mayor Stephanie Rawlings-Blake said the administration supports the application for the RISE Zone but declined to comment on a request for $17 million in Tax Increment Financing.

Although only three RISE Zones can be created in each local jurisdiction, applying to create such a small zone makes sense because the local jurisdiction does not receive state funds to offset losses in revenue from the property tax credit. In the state’s traditional enterprise zones, the state reimburses jurisdictions for 50 percent of its lost revenue.

Before a zone can be created there’s a two-step applications process.

First DBED must declare a college or university, a nonprofit affiliated with the federal government or a regional higher education center as a “qualified institution.” So far the state has named the University of Maryland, College Park and University of Maryland, Baltimore County as qualified institutions. It has been recommended granting the University of Maryland, Baltimore that status.

The second step is to apply for designation of a RISE Zone with a joint application from the taxing jurisdiction and the qualified institution. So far the state has not received any applications to create a RISE Zone.

About Adam Bednar

Adam Bednar covers real estate and development for The Daily Record.