City council panel declines to endorse subsidy for West Baltimore project

On Poppleton TIF, Baltimore councilman objects to 'special subsidy.'

A City Council committee declined Thursday to endorse a $58 million subsidy for a mixed-use development in West Baltimore's Poppleton neighborhood, but advanced the deal anyway for the full council to consider next week.

Carl Stokes, chairman of the council's economic development committee, said he opposes the $58 million tax increment financing deal. Two members of the five-member committee, Warren Branch and Helen Holton, failed to attend the voting session, meaning that the deal didn't have the three votes needed to pass. But Stokes said he believed the project was important and should be considered by the full council, so he asked his colleagues to move it out of committee with "no recommendation."

"I support the project, but I don't support the way the city is paying for the infrastructure," Stokes said. The full council is scheduled to vote on the deal Monday.

Under tax increment financing deals, the city issues bonds to give the developer money to pay for infrastructure improvements and other costs. The city then uses the increased tax revenue generated by the development to pay off the bonds and their interest.

The planned Poppleton development includes roughly 1,600 new apartments and other residences, 52,000 square feet of commercial space, a park and a school in a neighborhood close to the University of Maryland BioPark. Co-developers La Cite and Diversified Realty Partners LLC estimate that redeveloping the 13.8 acres would cost $460 million over more than 15 years.

The project is located south of Route 40 between North Carrollton Avenue and North Amity Street.

Daniel Bythewood Jr., president of New York-based La Cite, has said the Poppleton development will include parks near Edgar Allan Poe's house, including a dog park.

Residents of Poppleton and City Councilman William "Pete" Welch, who represents the area, have testified that more development is needed in Poppleton to replace vacant houses and lots.

But Stokes said he believes the city should pay for project infrastructure through its capital budget, rather than floating bonds that accumulate interest, increasing the city's debt.

"I also believe the developer should be responsible for open space and parkland," Stokes said. "The city ought to dramatically reduce property taxes across the board, so we don't have to decide which few developers get a special subsidy."

City projections indicate that the development would have a rate of return of 9.5 percent without the subsidy — for a profit of $19.5 million — but nearly 15 percent with the TIF, for a profit of $31.4 million. The project also is in line to receive about $520,000 in Enterprise Zone tax credits.

Once built, the properties would pay $8.4 million a year in property taxes, up from $26,000 that comes from the site currently, officials say.

The agreement with the developer calls for 20 percent of the housing units to be "affordable." In the first phase, 52 of 257 units would be considered affordable — meaning they would rent for $600 to $800 per month versus $1,200 to $2,400 for more expensive units. For each acre devoted to affordable housing, the developer makes $635,000 less, officials said.

Officials from the Rawlings-Blake administration, which supports the project, say the plan would draw 4,100 new residents to abandoned blocks and create 226 full-time jobs.

Since 2000, city TIF projects have included improvements at the Mondawmin Mall and Belvedere Square shopping centers, and conversions of former industrial sites such as Clipper Mill and the Procter & Gamble factory used as Under Armour's headquarters. The most recent TIF was awarded to a $1 billion Harbor Point development near Harbor East.

lbroadwater@baltsun.com

Twitter.com/lukebroadwater

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