BDC to review $535M Port Covington TIF

New property tax revenues from Port Covington would not significantly outpace costs until 2040

A request from billionaire Kevin Plank's private real estate firm that the city contribute $535 million toward new infrastructure in Port Covington will come before the full board of the Baltimore Development Corp. on Thursday.

The money would pay for new roads, bridges, sewers, utilities and parks on a peninsula south of Interstate 95 that juts into the Patapsco River's Middle Branch, where Plank plans to invest $5.5 billion for a new Under Armour campus and other mixed use development.

The city's $535 million contribution would come from bonds sold by the city and repaid by new property taxes generated by the project. The bonds would be sold in several rounds as the development progresses over a period of 20 years.

The request for so-called tax increment financing from Plank's Sagamore Development is the largest in the city's history. In addition, Sagamore is seeking about $574 million in state and federal funding and plans to invest $328 million of its money in infrastructure, including land acquisition.

Estimates created for the city and released publicly for the first time on Monday suggest the city would not start to see a significant payoff in new tax revenue until about 2040, when those receipts would start outpacing costs such as debt service by a wide margin.

Many other details about the TIF proposal — namely, how much total debt the city would take on as a result of the request and how much of the $535 million the city would need to borrow initially — remain unknown.

A committee of the Baltimore Development Corp. has met in three closed meetings to review the proposal, sparking an open meetings complaint to the Open Meetings Compliance Board in the Maryland attorney general's office by The Baltimore Sun, the Baltimore Business Journal and the Baltimore Brew.

Board Chair Arnold Williams said the board closed the meeting to review the developer's private financial information and discuss strategy for marketing the bonds, which would not be used for infrastructure inside the Under Armour campus.

"As we look at our negotiation strategy and going back or pushing back on the developers, we really need to keep that confidential," Williams said.

He declined to say what BDC staff have recommended to the board. BDC spokeswoman Susan Yum said no one was available for interviews.

Sagamore has embarked on an aggressive campaign to win support for its plans, which officials there say would add new jobs, businesses and buildings to a place where the city has tried, and failed, to jump-start activity for years.

The firm estimates the project will generate 42,000 construction jobs during the roughly two decade construction period and support 26,500 jobs once the project is complete.

Construction in Port Covington is underway already, with crews currently building a whiskey distillery by the water.

More than 400 Under Armour employees also have moved into a renovated Sam's Club, while a former city garage Sagamore has converted into office and manufacturing space is already fully leased, said Sagamore Development President Marc Weller.

"We think it has the potential to transform everything," said Weller, adding that the firm is committed to setting ambitious economic inclusion goals.

In addition to "We will build it together" advertisements on television and elsewhere, the firm has met with community groups and politicians to explain the plans.

Last week, the office of Rep. Elijah Cummings issued a statement backing the project, which also would receive tax breaks for being located in an Enterprise Zone.

"It's hard not to get excited about this kind of large, mixed-use project that promises thousands of jobs for Baltimore residents," he said.

Sagamore officials have said they hope to receive approval of the TIF by the end of the year, or earlier. After the BDC, it goes to the city's Board of Finance and the City Council for review.

Weller said the aggressive schedule is needed to meet Under Armour's growth needs and qualify for some federal funds.

City Council President Bernard C. "Jack" Young said he thinks that timeline is doable. But he said he wants to see commitments for job training and local hiring — as well as changes to a state funding formula to make sure Port Covington's tax breaks don't end up causing schools to lose money. Such a bill is pending before the state legislature.

"I don't want to put cold water on it right out of the gate," Young said. "I think it's going to be a catalyst for the city."

nsherman@baltsun.com

Copyright © 2017, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
52°