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Politicians, community groups press Hogan on State Center

Rendering of the proposed State Center complex at Howard and MLK. credit: Mithun
Rendering of the proposed State Center complex at Howard and MLK. credit: Mithun (BALTIMORE SUN)

Baltimore City politicians and community groups gathered Monday to press Gov. Larry Hogan to move forward with the State Center project, a plan to redevelop a 28-acre swath of Baltimore with new homes and stores anchored by offices rented by the state.

More than year after he assumed office, Hogan has not made a decision on the $1.5 billion project, which has been controversial since its start more than 10 years ago.

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Supporters say the plans would replace aging state buildings that date to the 1950s and 1960s and help revive the area around Eutaw and Preston Streets, which links midtown to West Baltimore and sees little activity outside of working hours.

Opponents have questioned the process used to select the development team, the impact on state debt and the project's rental rates, pointing to available office space elsewhere in the city.

The governor's office is actively reviewing State Center, a spokeswoman said. She declined to comment further on the review or when a decision might be made.

State leaders could decide to scrap the project, instead leasing existing space or renovating its current buildings, but the developer maintains those options are constrained by an already-signed development agreement.

Caroline Moore of Ekistics LLC, the lead member of the development team, said the development team remains committed to the plan, which she described as "as shovel-ready a project as one that has ever used that term."

"There's a lot of back-and-forth and getting up to speed," Moore said. "We're very hopeful that we'll reach a consensus on a way forward."

The project had been delayed, in part, by a 2010 lawsuit filed over the bidding process, but the state's top court ruled in 2014 that it was filed too late. However, state support for it had eroded by then.

In January 2015, the state's Board of Public Works postponed a vote about significantly reducing the size of a state-owned parking garage to keep it within budget, leaving the project to the new Hogan administration.

Mike Gill, secretary of the state Commerce Department, said this month the administration hopes to reach a decision this year, but on Monday a spokeswoman for the department referred questions on timing to Hogan's office.

Pointing to an agreement signed Monday by the developer and the State Center Neighborhood Alliance, a coalition of 12 community groups, city politicians said the project represents a model for redevelopment in Baltimore.

Under the community benefits agreement, the developer would contribute as much as $1 million to the neighborhood alliance or to a designated nonprofit for community uses, based on a formula related to how many rentable square feet are built in the project. The development's first phase is not included in the contribution formula.

The agreement also includes written commitments to involve community members in negotiations over design and other aspects, and reaffirmed an economic inclusion plan signed in 2011 that set goals for local hiring, participation of women and minority contractors, and job training.

"It is one of the frustrations of my administration that we are only here and not further," said Mayor Stephanie Rawlings-Blake. "This is what community economic development looks like. … This deserves the support."

The State Center developer is authorized to build 2,000 residential units, 250,000 square feet of retail and 2 million square feet of offices, including 1 million square feet for the state.

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The state-owned land is currently exempt from taxes, but if the project were to move forward, the developer would sign a ground lease for the parcels, making them subject to taxation.

The city's Board of Estimates approved a tax break for the project last year, in which the city would receive about $1.7 million a year after the first phase of the project is built — about $1 million less than the project would pay if those properties were taxed at current rates.

The project is also expected to seek tax increment financing to build infrastructure.

John E. Kyle, president of the State Center Neighborhood Alliance, said he wrote to Hogan's administration in January, asking to meet about State Center and discuss the community benefits agreement, which he signed Monday at Eutaw Place with Moore.

"We're trying to raise the visibility of [the project] in the minds of the public and in the mind of the governor's administration," said Kyle, adding that it would provide needed economic stimulus to the city's west side.

Hogan was "both unaware and not invited to today's announcement regarding State Center," his spokeswoman said.

In addition to Rawlings-Blake, City Council President Bernard C. "Jack" Young, City Councilman Eric Costello and mayoral hopefuls state Sen. Catherine Pugh and City Councilman Nick Mosby spoke at the signing.

"This is a model for how projects going forward should take place," Pugh said. "This is the project that the city needs."

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