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Harbor Point's city-issued bonds set for final approval Monday

FinanceBaltimore Development CorporationStephanie Rawlings-BlakeCarl StokesWilliam H. Cole IV

Amid continued protests, the Baltimore City Council is set to give final approval Monday to more than $100 million in taxpayer assistance for the massive Harbor Point development that the mayor calls a "once-in-a-generation opportunity."

Council members say they expect the $107 million in tax-increment-financing bonds for the waterfront project to pass easily despite a late effort by community groups, activists and unions to amend the legislation. Critics question both the size of the aid package and the amenities on which the money will be spent.

Some note, for instance, that about $60 million of the bonds will pay for new parks in Harbor Point, while the city budget has only only $10 million a year for upkeep of Baltimore's 18 municipal parks.

"The parks that we have are not well maintained," said Helena Hicks, a civil rights and environmental activist from Northwest Baltimore. "They are in terrible condition."

Under the plan, Michael S. Beatty's Harbor Point Development Group would spend $59 million of the bond money to build five small parks, $21 million on a promenade, and $10 million on a bridge extending Central Avenue. The legislation requires the developer to give $2 million of the funds to a nearby charter school, the Crossroads. About $15 million would pay for infrastructure improvements along the development's streets and piers.

Joann Logan, spokeswoman for the Baltimore Development Corporation, the city's quasi-public development arm that helped craft the development plan, said Harbor Point's parks are expensive to build because of environmental concerns at the site.

"Costs associated with this site differ from what one would find with creation of a park on a greenfield site," Logan said. "Such costs include but are not limited to installation of utilities, site build-up and other engineered infrastructure improvements."

Harbor Point is the planned home of energy giant Exelon's new regional headquarters, as well as a Morgan Stanley facility, other office buildings, residential towers, stores and a hotel.

With tax increment financing, the bond sale proceeds are used for improvements — in this case the parks and some infrastructure — and future property taxes generated by the development are used to pay off the bonds.

Opponents say that tax increment financing deprives the city's general fund, which pays for police, firefighters, teachers and other city services, of the increased property tax revenue. They say it's risky and amounts to corporate welfare.

Supporters, including Mayor Stephanie Rawlings-Blake, argue the project will swell the city's tax rolls and create thousands of jobs.

The tax increment financing is part of about $400 million in public subsidies for the project, including more than $110 million in tax breaks.

As Monday's vote nears, a series of citizen groups have suggested amendments to the legislation on a number of fronts, but council members say they do not expect the changes to pass.

"The council president is not going to entertain any last-minute amendments," said Lester Davis, spokesman for Bernard C. "Jack" Young, president of the City Council and strong supporter of the subsidy.

That disappoints some some citizen groups.

"These are common sense ideas," said Roxie Herbekian, president of the local branch of UNITE HERE, an international union that represents workers in the hospitality industry. "We've been a little frustrated by the lack of openness to any changes."

The amendments have so far gained support only from Councilmen Bill Henry and Carl Stokes, who voted against the Harbor Point subsidy last month. The measure won preliminary approval in the council 11-3.

The four proposed amendments are:

•A measure pushed by UNITED HERE and the Metropolitan Baltimore Council of Unions calls for greater transparency from the 30-year Harbor Point project, including requiring annual reports about new jobs created and other economic impact figures.

•The unions' second amendment would require the developer to enter into a labor agreement with hotel workers before construction can begin.

•An amendment by housing advocates asks for city government to match the developer's $3 million contribution to a fund for affordable housing.

•Hicks has offered a wide-ranging amendment calling for more stringent environmental requirements for the development, which is being built over of a cap covering chromium pollution.

The largely vacant Harbor Point site is assessed now at $10 million, but the Baltimore Development Corp. projects it will be valued at $1.8 billion for tax purposes when the development is completed years from now.

Once fully built, city officials say, the project will contribute about $20 million a year in increased property taxes to the city's budget, which could be used for schools, roads, police and other projects.

Beatty plans to buy the initial offering of city-issued bonds for the $1.8 billion project, earning an estimated 6.5 percent interest rate, enabling him to pay for a construction loan. Stephen M. Kraus, the city's chief of treasury management, said the arrangement will save the city money because a private sale is cheaper to orchestrate than a public bond offering.

Councilman William H. Cole IV, who initially opposed the size of Harbor Point's subsidy, calling it "excessive" and in need of a "haircut," said he changed his view about the project after listening to representatives of the BDC.

"I did have some misgivings about some of the pocket parks," he said. "But the project itself needs to move forward. The project is so important to Baltimore."

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FinanceBaltimore Development CorporationStephanie Rawlings-BlakeCarl StokesWilliam H. Cole IV
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