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C. Fraser Smith: Our new Bethlehem Steel?

“We’ve seen time and time again, for decades, developers make big promises to the people of Baltimore. They’re given big pots of money, they always promise great jobs that they’re going to create for the citizens of Baltimore, and every time we learn what that is … a small number of poverty-wage jobs that don’t help families.”

— The Rev. Ty Hollinger of Interfaith Worker Justice, speaking to The Daily Record.

Hollinger offered his skeptical comments in the context of Port Covington, a mega-development project.

The $535 million tax increment financing package sought by the developer is precedent-setting. Hollinger’s recitation of the development cycle is not.

Big project, big tax breaks and big promises from big developers, all part of the $5.5 billion plan to rebuild a city neighborhood – 260 acres of neighborhoods on the South Baltimore peninsula.

The centerpiece would be a global headquarters for Under Armour, Baltimore’s latest replacement for heavy industry and good jobs.

An obvious aspect of this narrative is the importance of this company to a city eager to please a corporate citizen whose enterprise has achieved global prominence. Probably no one would have imagined it, but sports apparel and shoes step up now as this century’s Bethlehem Steel.

To make it all happen as currently planned, the city of Baltimore – its taxpayers – would grant $535 million in tax relief (property taxes on the project would be used to pay for infrastructure, not go into the city’s general coffers.) If approved, that would be the largest such TIF – tax increment financing – in city history. In essence, a TIF is based on estimates of increased tax revenues based on the value of the property that is developed.

The bottom line under city policy is TIFs are OK only if the project would not be done “but for” the tax break. City officials operate now on the conclusion that developers won’t develop without the financial help.

Projects like Sagamore’s (Sagamore, aka Under Armour’s Kevin Plank) create a certain level of anguish and consternation in the neighborhoods. Hollinger’s concerns are typical – and widely shared by residents of other neighborhoods. Members of the city council from those TIF areas are typically reluctant to go along, at least in the beginning. In time, for whatever reason, they do. Better to take a chance than to settle for nothing at all.

And, to be sure, others in the Port Covington tract are guarded but less dour than Rev. Hollinger.

“Sagamore has shown us they’re very interested in being a willing partner,” Michael Middleton told The Daily Record. “No we haven’t started talking dollars and cents,” he added with a laugh.

Sagamore, interestingly, has been proceeding proactively, seeking out conversations with the neighborhoods. For some weeks its representatives have been meeting with Middleton and others. More discussions are certain to come as Sagamore’s plans come further into focus.

That part of the process had more than a hiccup recently when the Baltimore Development Corp. closed a meeting on the Sagamore TIF in violation in of the open meetings law. Not smart if there was any thought of providing transparency – critically important if the Port Covington area was to back the project.

After being sanctioned by Maryland’s Open Meetings Compliance Board, the BDC’s record of the meeting was made public. The subjects: affordable housing, workforce development and support of small, minority and women-owned businesses. If the development is to really help the neighborhood, these considerations are certainly important – particularly with the size of the TIF and its impact on the entire city.

Michael Middleton, the neighborhood spokesman, and Ty Hollinger would have been eager listeners to be sure.

Perhaps these matters will be ventilated now – but only, it seems, because The Sun, The Baltimore Business Journal and Baltimore Brew filed a complaint. The records are available for review, but seeing and hearing the conversations would have been far better.

The compliance board ordered that, at a subsequent meeting, a BDC member orally summarize the opinion and a majority of the BDC’s members sign it.

The state determined, as it should have, that there was no good reason to close the meeting. A half-billion in tax breaks were under consideration. The quality of life in city neighborhoods was at stake.

The future of the TIF as a useful tool in development was at stake.

Not to speak of the citizens’ trust.

C. Fraser Smith is senior news analyst at WYPR.  His column appears Fridays in The Daily Record. His email is fsmith@WYPR.org.