Baltimore-based architect Klaus Philipsen argues in a blog post published Monday that the city must be cautious in how it handles a request for $535 million in public financing for redevelopment of Port Covington.
What is in order is a meticulous analysis of the proposed project, the estimated cost and the benefits that the project promises. The TIF should be broken up into the phases with later TIF bonds being conditional on fulfilling the promises of the earlier ones. Public benefits and the quality of each element of the project need to be carefully codified. Pay-back rates for the municipal bonds should be shortened as much as possible so that tax benefits can be accrued to the City’s budget earlier. These steps will take time, but they should be dealt with in urgency. It is in Baltimore’s vital interest that Under Armour can grow and realize its campus.
Last week Sagamore Development Co., which is backed by Under Armour CEO Kevin Plank, addressed a Baltimore Development Corp. committee about plans to seek $535 million in tax increment financing.
The company has proposed a massive redevelopment of about 260 acres of largely under developed industrial land on the city’s southern peninsula. Sagamore Development Corp. expects the massive mixed-use development to cost $5.5 billion over a 25 year timeline. The company projects that private investment will cover $4.39 billion of the project. Under Armour also plans to build a headquarters in Port Covington but that is being pursued independently and public financing would not be used for that project.
Sagamore Development Corp. is projecting “horizontal construction,” which includes infrastructure build out, will cost about $1.4 billion. It’s also seeking about $573 million in federal and state funds to help cover that expenditure.
Tax increment financing uses city bonds to pay for infrastructure projects associated with development. The bonds are then supposed to be paid back using the increase in property tax revenues associated with the development.
The financing tool, which has been used fairly frequently by the city over the years, has become the target of criticism in recently.
Activists have portrayed tax increment financing as a giveaway to developers, and argue it’s deployed in already wealthy areas of Baltimore while poor neighborhoods suffer from a lack of investment
Leading Democratic mayoral candidates expressed a mix of concern and optimism about the project but ultimately decided not to weigh in on whether they specifically support or oppose the tax incremental financing proposal.
Some state lawmakers who represent South Baltimore told The Daily Record they haven’t seen specific proposals from the developer for state funding — a slide presented to the BDC last week indicates they will want more than $349 million in state funds — but they were generally supportive of the proposed development.
Del. Brooke Lierman said developers were proposing a “thriving, inclusive waterfront neighborhood” adding that the state and city need to do their due diligence, but also said lawmakers will work to get the resources the project needs.
“Big visions have big plans and big numbers,” Lierman said.
Sen. Bill Ferguson called it an incredibly important project not only for Baltimore and Maryland but the entire region.
“I’ve not heard any specific requests, and of course would have to know the details of the project before whether or not I would support it, my overall opinion is that this is project that if we can fairly and equitable facilitate we should,” Ferguson said.