The long-awaited redevelopment of Baltimore’s historic Penn Station got a “critical missing piece” of its funding sources when the state said it would award the project a $3 million historic tax credit, potentially allowing construction to begin in the first half of the new year.
The $3 million is a fraction of the overall cost, but Renner said such reuse projects can be tough to finance and pull off, especially when they are in a transitional neighborhood that has come far enough to impress locals but maybe not outsiders considering where to invest their dollars.
Baltimore is also a “show-me town,” Renner said.
“People want to see progress, so I think a state historic tax credit award is important to show the project is real this time," he said. "People have been talking about it for a decade or more.”
The credit brings the total raised so far to $53 million out of $70 million, and another $3.5 million or so is expected in federal historic tax credits. Developers will have to come up with $13.5 million in financing.
Those funds could come from a local or regional bank or from investors looking for their own benefits for investing in a newly designated Opportunity Zone, a federal program to encourage spending in distressed areas.
“Now all we need is tenants,” Renner said.
Scaffolding on the building in the first half of 2020 could grab some attention. He expected a range of outlets to eventually sign on, from a quality news stand and coffee shop to fast casual and finer dining restaurants catering to both travelers and the surrounding neighborhoods.
There also is about 40,000 square feet of office space, and Renner said he hopes to attract tenants who need satellite space near the transit hub or others who travel frequently.
Gov. Larry Hogan and the state Department of Planning announced the tax credits Monday, along with credits for seven other projects, for a total of $9 million.
“The Maryland Historic Revitalization Tax Credit is one of the most effective investment tools for strengthening Maryland’s local economies,” said Hogan said in a statement. “The projects awarded this year will bring hundreds of jobs, as well as new housing, commercial, and arts opportunities through the redevelopment of our communities.”
State officials said there were 19 applicants seeking $24 million for projects. The officials said they used established criteria, including ones outlined by the U.S. Interior Department for historic building rehabilitations.
Others that won tax credits include Glenn L. Martin Plant #2/Middle River Depot, a massive structure on Eastern Boulevard that has been purchased by Baltimore developer Blue Ocean, and Day Village on North Avondale Road in Baltimore County.
In Baltimore City, awards went to projects at 1629–1631 Aliceanna St., Strawbridge M.E. Church on Wilson Street, 3127 E. Baltimore St., 301-305 N. Howard Street and 417 N. Howard St.
"Planning supports historic rehabilitation while advancing community revitalization and economic development,” said Planning Secretary Rob McCord in a statement. “This funding helps encourage preservation and adaptive re-use of historic buildings and enhances the enjoyment of our state’s history, while helping to breathe new life in our communities.”
The Penn Station project is part of a $400 million to $600 million project announced in December 2017 to redevelop an area around Penn Station into a transit-oriented hub of apartments, shops, offices and a hotel.
The project would include the Head House, track improvements to accommodate high-speed trains and a mixed-use project on a lot adjacent to the train station. The project also aims to develop other Amtrak-owned parcels in the Station North neighborhood.