Baltimore reaches hiring, affordable housing deals in Port Covington

Port Covington to receive inclusionary housing exemption.

Under Armour CEO Kevin Plank's real estate firm will be exempt from city requirements to include affordable housing in the proposed multibillion-dollar redevelopment of Port Covington, but the company agreed to make some residences available below market rate.

The city's deal with Plank's firm, Sagamore Development, is one of several focused on local hiring, participation of minority- and woman-owned firms, and affordable housing scheduled to go before the Board of Estimates on Wednesday as the city weighs Sagamore's request for a record $535 million in tax increment financing.

Mayor Stephanie Rawlings-Blake and other city leaders have said commitments in those areas are critical to securing their support for the financing, which would help build infrastructure on land Plank owns on the South Baltimore waterfront.

The administration and other members of the Board of Estimates denied requests for copies of the agreements before the vote, but some critics said what has been revealed about the deals so far suggests they do not go far enough.

"It just seems to me to be almost like free money in exchange for some promises that don't really mean a lot substantively," said Peter Sabonis, director of legal strategy for the National Economic and Social Rights Initiative and a member of the Baltimore Housing Roundtable advocacy group.

Sagamore has agreed to a goal of making 10 percent of the 7,500 proposed, mostly rental residences "affordable" for families with incomes that are less than 80 percent of the median household income in the Baltimore area, according to a summary of the agreement included on the agenda.

That threshold translates to less than $46,000 for an individual or $65,700 for a family of four, according to federal estimates. The median household income for the Baltimore region is about $86,700 — more than double that in the city.

Housing advocates said homes pitched to that market do not meet the need of the city's many poor families.

"I certainly hope they're willing to go beyond just this, and I hope the City Council asks them to go beyond this," Sabonis said. "I don't think it fulfills the responsibility that I think a recipient of public subsidies should have."

Under the city's inclusionary housing law, Sagamore would be required to make 20 percent of the project's 7,500 proposed, mostly apartment residences affordable if it receives the TIF. However, the law also requires the city to compensate the developer for the affordable units.

The city granted a waiver to Sagamore because it does not have the funding, Rawlings-Blake spokesman Howard Libit said.

Housing advocates said they know the inclusionary housing rules, which kick in when a project receives a major public subsidy or rezoning, are flawed.

The 2007 law had produced just 32 units of affordable housing through the end of 2014. Some developers, including Harbor Point's Beatty Development Group, made contributions to the city's inclusionary housing trust fund instead of building units, an option that is kept open for Sagamore.

"It would be great to have a well-functioning inclusionary housing ordinance in Baltimore, but we don't at the moment," said Patrick Maier, executive director of the Innovative Housing Institute and a member of a task force convened to improve the law. The 10 percent is "better than what we're getting in a lot of other developments, which is nothing, so that's positive, I suppose."

Others said they didn't think the commitment matched the scale of the request for financing, which would come from public bonds that are repaid by the new tax revenue generated by the project.

"I don't think they're giving up much," said developer David Tufaro, founder of Terra Nova Ventures, which developed Mill No. 1, one of the city's four developments with inclusionary units.

Sagamore officials declined to comment for this article, saying through a spokesman that the firm wanted to respect the city's review process. The firm has said it expects Port Covington to bring widespread benefit to city residents through affordable housing, transportation improvements and jobs.

"Our self-imposed mandates will exceed anything that we have to do," Sagamore's president, Marc Weller, said last month during a discussion about local hiring.

Sagamore owns about 160 acres in Port Covington, an area south of Federal Hill and Locust Point that is separated from those neighborhoods by Interstate 95.

The firm is planning to serve as master developer for about 260 acres in the area, working with partners on as much as 13 million square feet of new construction. Under Armour also plans a 3.9 million-square-foot headquarters campus in the area.

Sagamore has said the new development represents $5.5 billion in investment and will support 26,500 jobs once complete.

As part of the hiring agreement, Sagamore has committed to paying the city at least $150,000 annually for a minimum of five years to fund a city youth jobs program and as much as $80,000 annually to hire a local hiring coordinator, according to the Board of Estimates agenda.

The board also is slated to vote on a 25-year deal for building and maintaining a new bike path in the area.

The Rev. Alvin C. Hathaway Sr., senior pastor at Union Baptist Church and an adviser to Sagamore, said it's laudable and rare for a developer to agree to build anything below market rate, even if more needs to be done in the city to help families earning less.

He said the is firm also working on a community benefits agreement and expects to negotiate further when the TIF request reaches City Council.

"I think you'll see a more robust agreement at that time," he said. "This is … really just the first step."

nsherman@baltsun.com

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