The board of the Baltimore Development Corp. is recommending the city approve a developer's request for $107 million in tax increment financing to pay for roads, utilities and parks for the $1 billion mixed-use Harbor Point development on the waterfront between Harbor East and Fells Point.
The board of the BDC, the city's development agency, voted Thursday to send a recommendation to Mayor Stephanie Rawlings-Blake for consideration. The financing, a way to fund construction of public infrastructure for new development, also requires City Council approval.
Developer Michael S. Beatty's Harbor Point Development Group LLC is re-developing the mostly vacant 28 acres, the former site of the Allied Signal chromium plant. Work is expected to start this summer on a 23-story skyscraper to house energy giant Exelon Corp.'s regional headquarters. Harbor Point's first office building houses Morgan Stanley and other tenants.
The financing will pay only for public improvements, and "what people don't realize is even with that in place, these projects are still challenging," Beatty said. "This is a way for the private sector to take the risk to fund costs normally paid by any city, and the city reaps the benefit of future jobs and taxes."
Under tax increment financing, the city would issue bonds and use the proceeds to pay for new roads, sidewalks, a waterfront promenade, a 6.5-acre public park and an extension of the Central Avenue bridge. Property taxes generated by the eventual development of up to 3 million square feet would pay the bond's debt service.
Harbor Point Development's arrangement with the city would include a private construction loan to start the work and an agreement by the developer to repay debt service in the event of a revenue shortage, placing more of the risk on the developer, said Beatty, a developer of the adjacent Harbor East community of offices, shops, hotels and apartments.