Baltimore City officials, Sagamore Development and community leaders announce the Port Covington Development deal. (Caitlin Faw, Baltimore Sun video)
A City Council committee unexpectedly stopped short Thursday night of approving $660 million in bonds for the Port Covington development, hours after the developer announced a $100 million community benefits agreement with city officials and activists.
The agreement was widely expected to ensure passage of the public financing plan, which would be used to pay for project infrastructure. Supporters say the development would bring thousands of jobs to Baltimore.
But after approving two of three necessary bills, City Councilman Carl Stokes, chairman of the economic development committee, abruptly called the meeting to a close without explanation.
He later told reporters he was concerned that the public had not had time to properly review the community benefits deal. He also expressed concern about projections that show that city schools would lose millions of dollars in state funding as a result of the project, and wants stronger guarantees that the developer would cover such a loss.
"There is a proposed deal on the table; that doesn't mean it can't change," Stokes said. He said he adjourned the meeting suddenly because he suspected that other council members were attempting to force the bills through.
"I got a little heated because colleagues of mine who disrespected the process previously were about to do that again," he said.
Other members of the committee said they were surprised by Stokes' action and could not explain it. Without passage of the third bill, the Port Covington project is temporarily in limbo. Two of three bills passed with Stokes and council members Helen Holton and Ed Reisinger voting in favor and Bill Henry and Warren Branch abstaining.
After Stokes ended the meeting, he engaged in long conversations with City Council President Bernard C. "Jack" Young and Bishop Douglas I. Miles of Baltimoreans United in Leadership Development. Stokes said he would likely bring the third bill back for a vote next week.
Marc Weller, president of Sagamore Development, said he was surprised and disappointed by Stokes' decision to recess without acting on all the pieces of the legislation.
"Throughout this process, we've been proud to engage in the public dialogue around Port Covington and hope that all can see how committed we are to community partnerships and investing in the long-term future of Baltimore City," he said. "We've put forward an unprecedented and historic $100 million citywide benefits agreement and have negotiated in good faith with all parties at every turn."
The meeting came hours after the announcement of the benefits agreement. It was the result of weeks of negotiations between Under Armour CEO Kevin Plank's Sagamore Development Co., the Rawlings-Blake administration, key City Council members and the influential community group BUILD — which had opposed the project.
The deal — the largest of its kind in city history — was unveiled during a news conference in South Baltimore, where supporters hailed the agreement as an unprecedented step for a developer who is seeking a subsidy from the city.
"It's a new day in Baltimore," Miles said Thursday afternoon. "To any developers out there, when you come to the table now, come with your checkbook ready."
The community benefits agreement builds on an existing deal to provide about $39 million to six South Baltimore neighborhoods near Port Covington. Sagamore also agreed to contribute $25 million for new workforce development initiatives and $10 million for no-interest loans or other funding streams for minority- or women-owned startup businesses.
The developers also agreed to commit $6.5 million more to workers on the project so they can be paid a so-called "prevailing wage."
Tom Geddes, the CEO of Plank Industries, called the impact of the deal "transformational."
"What we are announcing today is not big," he said, "it's huge."
Sagamore is seeking $660 million in bonds to pay for public infrastructure in the $5.5 billion Port Covington project. Under a deal called tax-increment financing, the bonds would be repaid through future taxes generated by the development.
Young, who had encouraged the developers to negotiate with interest groups, joined Mayor Stephanie Rawlings-Blake in praising the community benefits agreement as "historic."
"In addition to providing meaningful jobs, the benefits agreement pumps tens of millions of dollars into programs to support workforce development initiatives, education programs, college scholarships and improvement to recreation facilities," Young said.
Rawlings-Blake called Sagamore a "true partner" that would strengthen the local economy, the workforce and the affordable-housing market.
Under the citywide benefits deal, the developers would dedicate $35 million in land purchased by Sagamore for use as public parks and open space. They would require that at least 30 percent of all infrastructure work be performed by Baltimore residents and at least 30 percent of all permanent jobs at the development go to city residents.
The deal also requires Sagamore to commit to building 20 percent of residential units as "affordable housing." Most of those units must be built at Port Covington, but 40 percent may be built elsewhere.
Sagamore also agreed not to request the issuance of any tax-increment-financing bonds if there is a projected negative impact on state funding for Baltimore schools. State lawmakers have said they will alter a formula that has cost the school system state money in recent years because new city developments have not immediately paid taxes, as the formula expects.
The tax-increment-financing deal still faces opposition.
Labor union LiUNA — which has been running TV ads in an attempt to put pressure on the developers — led a rally of about 200 people at War Memorial Plaza on Thursday afternoon to demand that a majority of the workers hired by the developer be local residents and that they be paid "prevailing wages." The union does not believe agreements with Sagamore pay enough workers such wages.
"Sagamore wants to use the city's money and take advantage of the workers," said David Allison, business manager for LiUNA's Baltimore Washington Laborers' district council.
The union wants workers to receive health insurance, retirement funding and pay that allows them to support their families, Allison said. If structured properly, he said, Port Covington's redevelopment "has the possibility of creating a new middle class in Baltimore."
Harford County resident Omar Thomas, 46, recently finished an apprenticeship program in general construction. A former casino employee in Atlantic City, N.J., he attended Thursday's rally to advocate for union-wage jobs at Port Covington.
"I have lived in a lot of places and I have seen development like this come in, and they promise a lot of different things and hardly deliver," Thomas said. "It builds up the people who already have and it skips over the people who are still trying to establish themselves in the working class."
Weller rejected the union's argument. He said LiUNA refused an offer from the company that "could result in 100 percent prevailing wages to Baltimore City residents working on the project and only wanted those wages paid to their members."
He also accused the union of not wanting to "prioritize Baltimore City residents for employment or wages or Baltimore City businesses for contracts."
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"Sagamore is never willing to prioritize anyone or anything over city residents, city businesses and, especially, the city's minority and women entrepreneurs who are working hard every day to bring wealth, success and stability to their families and the communities throughout Baltimore City," Weller said in a statement. "These are the realities of the discussions between Sagamore and LiUNA and make it perfectly clear why they are on the outside looking in."
Allison said the union negotiated with the developer in good faith and still hoped to reach an agreement.
Baltimore Sun reporter Yvonne Wenger contributed to this article.