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Baltimore needs TIF process transparency improvement, report says

Baltimore needs TIF process transparency improvement, report says

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East Baltimore resident Christine Thornton, owner of Chandler Enterprises, which provides clerical support services fans herself with a Port Covington sign during the hearing at the War Memorial Building, which was attended by over 200 people. (The Daily Record/Maximilian Franz)
East Baltimore resident Christine Thornton fans herself with a Port Covington sign during a 2016 hearing on the development project at the War Memorial Building. (The Daily Record/Maximilian Franz)

An influential nonprofit released a report recommending Baltimore ensure greater resident participation in its process for awarding public financing for development projects.

The Citizens Planning & Housing Association released its transition report addressed to Mayor Catherine Pugh, and the City Council, on Monday. The report, which makes recommendations on other issues such as transportation and community development, suggests steps the city can take to better inform residents about public financing proposals in the future.

The report, which essentially serves as a roundup of ideas from five panel discussions hosted by CPHA in the last year, urges Baltimore to establish a formal process for the public to assess the merit of future projects receiving incentives, such as tax increment financing and payment in lieu of taxes.

The city should expand resident’s access to information, such as where and how much certain incentives have been granted, by posting it on the city’s website, the report contends.

Other recommendations from CPHA include holding additional public hearings, if the incentives cross a set capital threshold, prior to the City Council’s legislative process starting, and providing more information about the cost and benefits of proposed incentives.

As an example, CPHA mentions in the report the decision to award $660 million in tax increment financing for Sagamore Development Co.’s Port Covington redevelopment, which the group calls the “biggest development-related issue in Baltimore last year.”

“However, this TIF, and other large incentivized projects, have passed relatively quickly through the City Council process and with minimal public outreach and engagement by the City Government,” according to the report.

Sagamore proposed building a $5.5 billion development on roughly 260 acres of underutilized industrial land in south Baltimore. The developer, which is backed by Under Armour CEO Kevin Plank, proposes building 13,500 residential units, 1.5 million square feet of office space and about 200 hotel room during the next 20 years. Under Armour also intends to independently build a global headquarters on the peninsula but will not receive public financing.

Sagamore sought tax increment financing from the city to pay for public infrastructure, such as streets, sewers and parks. Tax increment financing involves the city issuing bonds to pay for the construction that’s hopefully repaid with increased property taxes from the associated development.

Following the council’s approval, former Mayor Stephanie Rawlings-Blake signed legislation enacting the tax increment financing for the project in late September. The public financing proposal had first become public in March following a meeting with the quasi-public Baltimore Development Corp board.

In a telephone interview, Richard Hall, executive director of CPHA, said the Port Covington development may be a positive project for the city. But he added his organization believes better efforts to educate residents about public financing may prevent some of the polarization that resulted from the Port Covington public financing proposal.

“More people than most people thought were kind of in the middle thinking, ‘Hey this is probably a pretty good project,’ but, gee, with that big of a TIF you think there would be a little more explanation about what the community benefits are, what the process is … and very little of that happened,” Hall said.

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