Residents of the neighborhoods around the soon-to-open Horseshoe Casino in downtown Baltimore are right to be upset that the city is diverting $3 million of the money set aside in state law to help mitigate the impact of casinos on the surrounding communities to instead move a steam pipe under the street. Any argument that this expenditure fits the spirit of the law is incredibly weak. But the city says that it has explored all other options, and without the project, which the Board of Estimates approved today, the casino won't open on time next week.
Baltimore was already on the hook for some $6 million in infrastructure improvements to make the casino happen — things like realignment of intersections to mitigate potential traffic issues and the relocation of BGE gas lines. Mayor Stephanie Rawlings-Blake’s spokesman said that was the price of getting a deal done for the construction of the $440 million casino and the jobs that come with it. That’s dubious. This is a massive private development, and it should cover its own infrastructure. But even if you buy the city’s argument on that point, this particular expense didn’t have to be handled the way it was.
The steam pipe in question is 45 years old and requires frequent maintenance, which is handled by Veolia, the company that leases the pipe from the city. Crews have to go in and make repairs that shut down part of Warner Street four or five times a month, which would be highly disruptive to the casino — something that is distinctly not in the city’s interest, given its profit-sharing agreement with Caesars. To replace it after the casino opens, the city estimates, would cost the treasury $90,000 a day.
The maintenance problems with the pipe are not a new development, yet for some reason, it only became apparent to city officials that this was going to pose a problem about a year ago. The Rawlings-Blake administration says it explored a variety of alternatives, including leaving the pipe alone, abandoning it or seeking to change the terms of its lease to Veolia, but none of them worked out. Officials say there was no choice but to move the pipe and no other pot of money available to pay for it besides the community impact funds. The mayor’s spokesman said that seeking to pay for the project though the city’s general fund would have forced cuts to some existing services, so taking $1.5 million in each of the next two years from a fund whose uses have not yet been determined seemed like the better solution.
But the only reason the city is in this position is that it did not make a determination that this project was needed until May and did not allocate any contingency funds to pay for it through the normal budget process. There may not now be any other money available to pay for the project, but there could have been. Baltimore’s agreement with Caesars calls for the casino to provide the city with at least $11 million in lease and profit-sharing agreements and property taxes during its first year of operation and at least $13 million in the second year. It is technically earmarked for school construction and property tax relief, but money in the budget is fungible. With some planning ahead, funds for the steam pipe project could have been included in this year’s budget; even now, funds for the second payment could be incorporated into next year’s spending plan.
The reason Mayor Rawlings-Blake has given for the necessity of moving immediately to relocate the steam pipe is to allow the casino to open on time, and she notes the city’s vested interest in seeing that happen. The benefits she’s seeking to protect accrue to the entire city and should be paid for by the entire city. Instead, though, she is taking the money only from neighborhoods that will feel the brunt of the casino’s impact in terms of traffic and other potential ills. That’s not right, and it’s most definitely not in the spirit of the state law granting aid to the communities around casinos. Mayor Rawlings-Blake needs to find another way to pay for this project.
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