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Feds reject Port Covington, Howard Tunnel funds

In a major blow to two huge Baltimore area projects, the federal government has denied requests for more than $230 million in grant requests for the Howard Street Tunnel and the redevelopment of Port Covington.

Sagamore Development Co. wanted $76 million in so-called FastLane grant funds to help pay to better connect Interstate 95 with the peninsula. Maryland was also seeking $160 million to renovate the CSX Howard Street tunnel to accommodate double-stack rail, which experts say is needed to help move cargo through a tunnel built more than 100 years ago, for an overall project expected to cost about $425 million.

Both grant applications were turned down by the U.S. Department of Transportation.

In a statement Marc Weller, president of Sagamore, said the federal rejection makes the company’s request for $535 million in public financing from the city “more important than ever.” The firm has proposed a $5.5 billion overhaul of roughly 260 acres of unused industrial land, but the area is in serious need of transportation upgrades if an overhaul of that magnitude is going to be possible.  Under Armour also wants to build a 3.9 million-square-foot global headquarters on the peninsula.

“Not only does Under Armour need to expand rapidly to keep pace with its tremendous growth, but it’s also now apparent that Maryland won’t get its fair share of federal funding without having the required matching funds approved and available. Federal officials have made clear they support Port Covington, as shown by the entire Maryland Congressional Delegation signing a letter in support of the state and city’s application for Fastlane grant funding,” Weller said in an emailed statement.

Tax increment financing involves the city issuing bonds for infrastructure improvements that are repaid with increases in property taxes from the associated development. The legislative package needed to issue the bonds over a 25-year period is scheduled for a hearing before the Planning Commission on July 14 and a City Council committee hearing on July 27.

A spokesman for Gov. Larry Hogan also issued a statement criticizing the federal decision to reject the grant applications.

“This is a disappointing outcome. This is the second time in two years that the Obama administration has overlooked Baltimore by withholding federal assistance that could make a real difference to the future of the city.  Port Covington and the Howard Street Tunnel have the potential to create thousands of jobs and billions of dollars in new economic activity, improving the lives of everyday Marylanders. Given the considerable impact these projects will have on the state, the Hogan Administration will seek Fastlane federal funding again next year in order to ensure that these projects are completed,” the statement reads.

Applications for the federal funds received bipartisan support with Baltimore Mayor Stephanie Rawlings-Blake signing off on the application for the Port Covington funds. Baltimore County Kevin Kamenetz sent a letter in support of the Howard Street Tunnel project, which would benefit the $1 billion redevelopment of Tradepoint Atlantic at Sparrows Point in the county.