The appointment came as BDC President Brenda McKenzie said that she was resigning this month for "personal" and "family" reasons, less than two years after she came to Baltimore from Boston.
Cole, 41, who lives in the Federal Hill area and represents South Baltimore on the City Council, will have to step down from that position. He called the BDC post a "very, very exciting opportunity."
"We need to continue revitalizing neighborhoods, main streets, and doing small-business development," he said. "Those are the things that will sustain the growth we've had."
McKenzie said her last day would be Aug. 21. In a telephone interview, she said she was "a huge fan" of Cole.
"I'm really happy with where the economy is here in Baltimore right now. To be a good steward, you want to leave things better than how you found them. [Former BDC head] Jay [Brodie] did that. I did that. And Councilman Cole will do that as well."
McKenzie earned an annual salary of $208,000. Cole is to be paid $190,000.
Cole, a councilman since 2007, has been a state delegate and a top aide to Rep. Elijah E. Cummings. Since 2003, he has worked as the associate vice president of institutional advancement at the University of Baltimore.
Council members make $62,000 annually.
He's been a close ally and reliable vote for Rawlings-Blake. Cole also played a key role in bringing the Grand Prix to Baltimore, and recently sought to limit smoking on playgrounds and rein in city employees' use of take-home cars.
Robert W. Curran, a council colleague, expressed mixed feelings about Cole's job change.
"It's truly a bittersweet moment for me," he said. "I'm losing my closest political friend on the council."
At the same time, he said, "I don't think there's a better choice for BDC president."
McKenzie, 47, is the seventh Cabinet-level or agency-head officer to leave the Rawlings-Blake administration in the last year. .
The resignation surprised many who've watched the city's business development agency under McKenzie, its second president.
About a dozen people have left the roughly 40-person agency during her tenure. But McKenzie pointed to a number of achievements, including progress on the Harbor Point waterfront development between Fells Point and Harbor East, and attracting or retaining T. Rowe Price, Amazon, Pandora, and Mindgrub.
She said her agency was able to draw $233 million in private investment to the city under her leadership this year.
Local attorney Jon Laria, who has represented developers in deals with the city, said McKenzie faced the challenge of coming from "an entirely different city."
"She had to figure out who's who," said Laria, a managing partner at Ballard Spahr. "That takes quite a while in any city, and Baltimore's no exception.
"Bill has zero learning curve with respect to that."
Developer David Cordish agreed, calling Rawlings-Blake's choice "courageous and creative."
"Bill Cole knows every inch of the city and is a proven leader," he said.
Kirby Fowler, president of the Downtown Partnership, said McKenzie helped put city-owned properties downtown into private hands, including sites near Lexington Market and on Calvert Street that had been held up in negotiations for years. The city agreed to sell the six Calvert Street properties for $2.2 million to apartment developer PMC Property Group, Inc. in March.
"Brenda was required to make some personnel changes that were tough," Fowler said. "She brought some good people on board."
But an economic development plan that was supposed to set the city's strategy remains unfinished. City officials said earlier this year that it would be complete by the summer.
"I'd hoped for a plan to be implemented," Fowler said. "But there's so many different players involved, you can understand why there's some delay."
Brodie, who led the BDC for its first 16 years before handing over to McKenzie in 2012, said he was "surprised" by her announcement.
"It's critical that BDC be a well-functioning organization for the city of Baltimore," he said. "I recognize a number of people who were there left. That'll happen. You have to find good young people to replace them.
"I think very highly of Bill Cole. If I can help him, I will."
Developer David Hillman said McKenzie is a "very nice lady" who was "very knowledgeable" about development. But he said the BDC didn't do enough to attract jobs to the city.
"I have no clue what Bill Cole's executive ability is, but he seems like a no-nonsense guy," he said. "The direction should be economic development and not funky real estate deals.
"I'm a big believer that most deals that have to have government aid to get done shouldn't get done."
The Rev. Andrew Foster Connors co-chairs Baltimoreans United in Leadership Development, which opposed the Harbor Point project because of government subsidies that members said would be better used going to neighborhoods.
He noted that Cole also questioned the deal. Cole ultimately voted for $107 million in tax increment financing.
"[He] raised a lot of questions about the deal as it came to the council," he said. "I hope as Councilman Cole gets in this new role, he will demonstrate a commitment to opportunities for neighborhoods."
A committee to be appointed by the council will nominate a finalist to replace Cole. The council will then vote on the nominee. Council President Bernard C. "Jack" Young will appoint the head of the committee.
Lester Davis, a spokesman for Young, said the council president was "taken aback" by the news.
"He got along well with Brenda. He wishes her well," Davis said. "The council president wants to bring economic development to neighborhoods and that's what it sounds like Bill Cole wants to do."