Port Covington developers announce multimillion-dollar deal with six nearby neighborhoods

Port Covington developers announce multi-million deal with 6 nearby neighborhoods.

As they seek the largest-ever special tax deal from Baltimore's government, the developers of the proposed Port Covington project have agreed to pump millions of dollars into nearby neighborhoods in a deal with community leaders.

The agreement — which could bring an estimated $39 million into six South Baltimore neighborhoods over the next 30 years — would create a new entity composed of developers and community members from Brooklyn, Cherry Hill, Curtis Bay, Lakeland, Mount Winans and Westport to spend the money. Potential projects include a community center, athletic fields, a business incubator, a library and a swimming pool, the community groups said.

Representatives of the neighborhoods and of Under Armour CEO Kevin Plank's Sagamore Development Co. announced the deal Thursday at a news conference at Cherry Hill Elementary/Middle School.

"It's a partnership rather than any type of grant or gift," said Tom Geddes, CEO of Sagamore's parent company, Plank Industries, which plans a $5.5 billion redevelopment in Port Covington. "We wanted to have a robust agreement with the South Baltimore communities."

Sagamore has proposed a mixed-use waterfront development that would include a new headquarters for Under Armour, restaurants, shops, housing and a manufacturing plant, among other features. The company has asked the city to float $660 million in bonds to build infrastructure for the project. The developer would have to pay back the bonds through future taxes.

Under the community agreement, if the bond deal is approved, the developers would provide $10 million to the new entity over the first five years — $5 million in direct payments and $5 million that it would raise from outside organizations.

The developers and community members pledge to then raise another $10 million over the next five years. The developers also would create a funding stream for the new entity every time a property at Port Covington was sold. That stream is expected to generate $19 million over 20 years.

Michael Middleton, chairman of the Cherry Hill Community Coalition, described the deal as "damn good."

He said negotiations came about after he invited the developers to a community meeting in Cherry Hill. After that, Cherry Hill teamed up with five other neighborhoods and had meetings with the developers for months to come up with the agreement.

"We have gotten the most and the best resources we could," he said.

The deal comes just days after a group of local religious leaders urged Plank to agree to an array of community benefits in exchange for any city subsidies awarded to Port Covington. Clergy members with Baltimoreans United in Leadership Development, or BUILD, attempted to hand-deliver a letter to Plank on Tuesday asking for a meeting to discuss profit-sharing, local hiring requirements and other guarantees as part of the project.

Geddes said BUILD was not a part of the negotiations for the community agreement with the six neighborhoods. He said some of BUILD's wants were unreasonable.

"Some requests are simply not feasible," he said.

Kristen Clarke, president of the Lawyers' Committee for Civil Rights Under Law, which represents the six community groups, called their deal with Sagamore "historic" and said it represents "economic justice."

She said the deal "produces meaningful benefits for the residents of South Baltimore, the vast majority of whom are African-American."

Mayor Stephanie Rawlings-Blake, who attended the announcement, said the agreement was negotiated between the developers and the community.

"This is a major day for self-determination in these communities," she said. "They didn't need anybody telling them what they should do. They did it themselves."

According to the deal, one-third of the money would be spent on citywide uses, while two-thirds would be used inside the six neighborhoods. The composition of the entity that would decide how the money would be distributed has not been determined.

The Port Covington project is projected to create 26,500 permanent jobs, space for manufacturing and to have $4.3 billion in annual economic impact once complete. The land includes the site of The Baltimore Sun's printing operations.

In addition to the $660 million in bonds the city would float to pay for infrastructure, the project is eligible to receive about $760.4 million in tax breaks because it is located in an area the city and state have deemed impoverished.

The city Planning Commission voted later Thursday to recommend approval of the $660 million bond deal, known as tax increment financing. The City Council will hold a hearing July 27 on the plan.

Thursday's deal is the second that Sagamore has announced for community benefits. In April, under a deal with the city, Sagamore agreed to provide more than $10 million over five years to fund citywide programs related to youth and education.

State Sen. Bill Ferguson, who helped broker the agreement in South Baltimore, called the "scale and scope" of Thursday's agreement unprecedented. He blasted "armchair naysayers" who have criticized the project.

"The conversations that led to this agreement were driven by community leaders," the Baltimore Democrat said. "This is what equitable development should look like. This is a template for how development should happen in Baltimore."

If approved by the City Council, the $660 million tax-increment-financing deal would be the largest in the history of Baltimore.

City Councilman Carl Stokes, chairman of the Taxation, Finance and Economic Development Committee that will vote on the bond deal, praised the community agreement but said many questions still remain about the proposed redevelopment at Port Covington.

"If the community has worked for something really good for themselves with Sagamore, that's great," Stokes said. "There are some citywide agreements that must be negotiated from this point on. We don't need people to give us a fish. We need jobs. We need the ability to take care of ourselves for generations."

In February, the council signed off on a $17.5 million tax-increment-financing deal for the University of Maryland's BioPark in West Baltimore after the developers agreed to a $4 million community benefits agreement. At the time, Stokes and others said they hoped future city financing deals would include money for nearby communities.

lbroadwater@baltsun.com

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