"It's a no-brainer that you can't afford to waste tax dollars like that," said Del. Keiffer J. Mitchell Jr., a Baltimore Democrat. "At least do an accurate calculation."
Mitchell worries that the errors will make it harder for Baltmore's state lawmakers to advocate for the city.
"You're going to have legislators in Annapolis who are going to see this and say, 'Why are we giving the city of Baltimore more [money] when they seem to be giving away the store and can't get it right?'" he said.
The mistakes might not be large in the context of a $2.4 billion city budget, he said, but they can have a real impact: "That's part of the budget of a rec center. It's a firehouse not having to close or rotate."
The enterprise zone credit reduces a company's local property taxes on the value added by new construction or improvements to an existing building. The break eliminates the tax on 80 percent of that added value for five years. Then the credit diminishes annually by 10 percentage points until reaching 30 percent in the final year.
A recent Sun article about the enterprise zone program reported that One Charles Center this year had one of the city's 10 largest credits — more than $450,000. But state and city officials later said that the city had wrongly computed the property's tax credit for bills that went out in July. The correct amount should have been $141,840, which would not have put the property in the top 10.
The city made two errors. First, it used the pre-renovation value of the wrong building — one miles away in the Holabird Industrial Park, according to Henry J. Raymond, the city's deputy finance director. That building's pre-rehab value was under $2 million, whereas One Charles Center was valued at $6 million before a major renovation that Angelos says cost more than $20 million.
The city's second error was to apply an 80 percent credit against the value of the improvements. Because the building is in the final credit year, the correct credit was 30 percent.
Angelos declined to comment. But Constantine Hadjis, chief financial official of Artemis Properties, which manages the building, said the revised bill of about $311,000 would be paid.
"I obviously don't think they've done it on purpose," Hadjis said of the error, adding that he was confident the city would fix any "flaws in the process."
Raymond has said the city recently assumed responsibility for computing several kinds of credits — enterprise zone, historic renovation and brownfields — because of concerns that the state Department of Assessments and Taxation had made too many calculation errors.
Owen C. Charles, deputy director of the state agency, acknowledged the errors made last year and the year before on One Charles Center. Both mistakes stemmed from applying the wrong percentage for the tax credit. Last year the credit was $40,000 too small; the previous year it was $120,000 too large — for a net loss to the city of $80,000, before factoring in the state's 50 percent reimbursement.
Charles blamed the state's mistakes partly on data entry error and said a switch to an electronic database a few years ago wasn't a cure-all because some information still had to be entered by hand.
A Sun analysis of One Charles Center's tax bills over the past decade turned up an additional four years in which the credit was wrong, meaning that seven of the past 10 years were incorrect.
Charles said one problem was that his staff lost track of when the credit began, throwing off the percentages in some years. Another problem, he said, was that the city did not reduce the credit after an appeal lowered the property's assessed value.
Errors went both for and against the city. All told, the city collected about $107,000 less on One Charles Center than it should have prior to this year, according to the analysis, which Charles confirmed.
The affected property in Harbor East is a retail parcel on President Street that includes the restaurant Talara.
Charles said the city failed to recalculate the tax credits for 2010 and 2011 after the owner got its assessed value reduced. And this year the city applied the wrong percentage — 70 percent instead of 60 percent.
Tim O'Donald, president of Harbor East Management, said one of his accountants noticed the 2011 error and emailed Charles about it in July 2011. Charles said he does not recall getting the email but said his agency did notify the city that it needed to reduce the tax break.
"We recognize it takes a while to get things straight," O'Donald said. "We're working with them to get it right, and we have all the confidence in the world that they will get it right."
In the case of W.R. Grace's facility in Curtis Bay, the company applied for the credit in 2007, and it was granted for the July 2010 tax bill, company spokesman Greg Euston said. But after the company succeeded in getting the assessed value lowered, it became ineligible for any break, Euston said.
After inquiries from The Baltimore Sun last week, the company confirmed with the city that this year's $208,000 credit was issued in error, Euston said, and the city recently removed the credit.
Harris, the mayor's spokesman, said the city is working to overhaul the tax credit process. It will involve the "centralization of granting city credits, automation of credit calculations, electronic capture of audit data, and automated tracking of credits throughout the life of the credit."
After the new system is in place, he wrote, "virtually all of the errors that have been identified will be eliminated."