The Port Covington redevelopment planned by Under Armour CEO Kevin Plank is expected to be eligible for a total of $760.4 million in city and state property tax credits over the life of the project, according to an analysis the city released Friday.
The estimate was released in advance of a Board of Finance meeting Monday, at which officials will take up a request from Plank's private real estate firm, Sagamore Development, for $535 million in tax increment financing.
The funding would be used to build parks, streets and other public improvements on about 260 acres in the former industrial area south of Federal Hill on the South Baltimore peninsula.
City Councilman Eric T. Costello, who represents the area, said he has downloaded the 500-plus page document and plans to review it closely.
"I'm very excited about the project," he said. "I haven't reviewed the document, but I plan to read every line of every page. I'm going to read it with the eye of an auditor. I look forward to learning what the TIF package is comprised of and what the project means for economic development for the city."
Moving forward with the financing would cost the city $2.16 billion over 41 years, including $1.4 billion in interest payments, according to the analysis.
The debt would be repaid by new property taxes generated by the project.
The redevelopment is expected to generate $1.7 billion for the city, or an average of $40.3 million annually, after tax credits, debt service and other expenses, according to the analysis.
Sagamore owns about 160 acres in Port Covington. The firm plans to serve as master developer, working with partners to complete 15 million square feet in new construction, including an Under Armour headquarters, residences, offices, shopping and hotel rooms.
The redevelopment will bring thousands of jobs to the city and help clean up environmentally damaged shoreline, said Mitchell Schmale, a spokesman for Sagamore Development, in a statement. Property owners in Port Covington are also responsible for making debt payments if values do not increase as anticipated, he added.
"The value to the City from the redevelopment of Port Covington will be an absolute net positive, and the economic benefits to the City will be unprecedented," he said.
The first phase of the project would involve the construction of office and manufacturing space. Public improvements paid for by the bonds would include a $19.7 million East Waterfront Park; an $18.6 million public plaza and a $26 million "archaeological pier."
Sagamore has said that the tax increment financing funds would not be used for infrastructure at the Under Armour campus.
The Baltimore Development Corp. last month recommended approval of the financing, saying the project would serve as a spur to the city's economic development. After the Board of Finance, the proposal is referred to the City Council.
Sagamore, which is still going through the city's master planning process, hopes to win approval of the financing by the end of the year.
The firm is contributing roughly $327 million toward infrastructure, including more than $114 million in land acquisition costs. It is also seeking $574 million in state and federal funding for the project.
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The bulk of the tax credits for the project come from Enterprise Zone and Brownfields programs, which are meant to incentivize redevelopment.
The analysis, by consultant MuniCap, measures the costs to the city generated by the 12,000 people expected to live in the area, including students, but it does not take into account how the project would affect the state's funding for city schools.
City Councilman Bill Henry, who sits on the city's economic development committee, which must approve the TIF, said he wished city officials had factored in the impact of the TIF on state funding for schools. But, he said, the City Council might have to force the issue.
"I'm looking forward to the opportunity to reading through 500 pages of description to the public," he said. "I'm hoping to find the answers to all the questions people have asked me."