Baltimore City officials and the Time Group held a groundbreaking ceremony Monday for the $29 million residential and retail building at 500 Park Avenue.
The mixed-use project, to be built in one of the wealthiest zip codes in the city, is to receive a 100 percent tax credit for two years.
The six-story building is to hold 153 residential units and about 4,000 square feet of retail space. It should welcome its first tenants in June 2017, said Mark Caplan, president and CEO of the Time Group.
"With this new project we continue to build on our success and offer potential residents the opportunity to live in what would be really cool and affordably priced apartments," Caplan said.
The project will benefit from a 15-year tax credit for housing in specific areas of Baltimore. The credit knocks off 100 percent of tax bills for newly constructed or renovated apartments for the first two years.
That means Time Group will pay a property tax equivalent to the space's value before improvements during the two years after construction is completed. The property was a parking lot before Time Group began construction.
The credit stays above 50 percent until the tenth year. Then it drops down to less than 16 percent for five years.
The Time Group finished converting the Hochschild Kohn warehouse at 520 Park Avenue into apartments last year. These apartments, next to 500 Park Avenue, also enjoy the 15-year credit. They have extended the historic boundary of the Mount Vernon neighborhood past Park Avenue.
The Hochschild Kohn apartments are fully occupied, Caplan said during the groundbreaking ceremony.
Caplan thanked Mayor Stephanie Rawlings-Blake for backing the tax credits. He said they have helped spur construction.
"The city tax bill will be millions of dollars lower than they might have been without it," Caplan said. "But most importantly the renovations and building of these buildings will result in millions of dollars for the city."
Rawlings-Blake said the credit is helping to deal with the vacancies plaguing Baltimore's central business district.
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As soon as she signed the tax credit into law, she said, "we saw cranes going up. Now the Downtown Partnership area is the fastest-growing area in the city."