After City Council vote, Port Covington targets millions in state and federal money

The next project at Port Covington? A $19.6 million waterfront park near Sagamore Spirit's whiskey still.

Kevin Plank's plan to remake Port Covington took a big step forward when the City Council approved $660 million in public financing for the project, but the Under Armour CEO still needs millions in state and federal funding to make his dream a reality.

Plank's Sagamore Development Co. is now attempting to win approval of about $350 million in state funding and $225 million in federal funding. The developer also needs to persuade various agencies to sign off on permits for Plank's ambitious plan to turn the mostly industrial South Baltimore peninsula into a $5.5 billion mixed-used development, including a new headquarters campus for Under Armour.

"We've always anticipated there would need to be significant state and federal money required to make this project a reality," said William H. Cole IV, president of the Baltimore Development Corp., the city's development arm. "You've got to put certain pieces together to unlock the next piece.

"The city's commitment sends a message to the state and federal partners that I hope will unlock state and federal funds."

State officials lost out this year on a bid for $76 million federal grant for an Interstate 95 interchange project and railway improvements in the area meant to spur redevelopment at the 160-acre Port Covington site. State officials already committed $33 million to that effort.

Sagamore President Marc Weller said the city's approval of the tax increment financing deal will help with another try at the federal funds, because the project is "significantly further along in its readiness."

Sagamore also is seeking funding from another U.S. Department of Transportation grant program, the Federal Transit Administration's "small start" grant program and from bonds issued by the Maryland Transportation Authority.

The developers hope to use the "small start" grants to help fund a proposed $165 million light rail extension from Westport to Port Covington.

Cole said the light rail extension will be key to making sure Baltimoreans can get to the jobs that Plank's development will offer. City officials say the Port Covington development, once complete, is projected to create 26,500 permanent jobs.

"The transportation pieces are truly important to making this project benefit the entire city," Cole said. "We know Baltimore residents have a tough time getting from their homes to jobs."

Meanwhile, Mayor Stephanie Rawlings-Blake plans to sign legislation authorizing the bond issuance next week. After she does so, the city's Board of Finance is expected to approve the first of what's projected to be five rounds of bonds issued over the next 40 years.

About $535 million of the $660 million in bonds will go to infrastructure such as roads, parks and sewer and water lines in Port Covington. The balance goes to a reserve fund and other costs associated with the bond sales. The bonds will be repaid through future tax revenues created by the project.

The first series of bonds is slated to amount to $64.3 million. About $19.6 million of that will go toward building an East Waterfront Park that will "provide public access to the waterfront and contribute to the ecological uplift of the Middle Branch," Weller said.

The park will sit between the Sagamore Spirit site — Plank's new rye whiskey distillery — and the water's edge on the Patapsco River. It will include public lighting, sidewalks, landscaping and waterfront paths, company officials said. The work also will include improvements to the shoreline to protect erosion and address environmental concerns.

The developers expect to use the remaining money to build an $18.6 million public plaza and lake and $26 million to build a so-called "archaeological pier."

The public plaza will be open space north of Under Armour's expanded headquarters that will include a newly constructed hydrothermal lake and vehicle bridge. The archaeological pier will transform the remains of a concrete pier to accommodate water taxis and kayak landings.

Dru Schmidt-Perkins, director of the pro-environment group 1000 Friends of Maryland, said the development offers a big opportunity to improve the Middle Branch, which is often filled with trash. But she said Sagamore should make sure it is truly accessible to the public, and not just corporate executives.

"It does open up swaths of the city to the public, particularly the waterfront," Schmidt-Perkins said. "By putting in these wonderful community assets, it does give people a new place to go walk, hike and enjoy the water. ... The details will really matter. This could turn out really well or it could be a lot of lip service."

As part of the city's deal with Sagamore, Comptroller Joan Pratt will assign a full-time auditor — paid for by the company — to make sure the firm is living up to its promises, including hiring at least 30 percent of construction workers from Baltimore and paying them a wage of at least $17.48 per hour.

The developers will need to obtain a battery of local, state and federal approvals, including from the Army Corps of Engineers and Maryland Department of the Environment on Sagamore's waterfront proposals; the Federal Highway Administration and Maryland Department of Transportation on highway improvement projects; the Federal Transit Administration and Maryland Transportation Administration on a proposed light rail extension into Port Covington; and congressional and Coast Guard approval to declare a portion of the Middle Branch non-navigable to create what Sagamore proposes as a "calm, recreational waterfront accessible to all of Baltimore."

If Sagamore fails to win federal and state funding or permits, Baltimore officials would be reluctant to award a second round of the bonds, Cole said. That said, Cole believes a $100 community benefits agreement signed by the developer will make the project more attractive to federal officials.

The citywide benefits agreement builds off a $39 million agreement between the developer and six neighborhoods near the project. It includes $25 million to train workers at a new Port Covington training center and $10 million for no-interest loans or other funding streams for minority- or women-owned startup businesses.

"Any time you're seeking federal funds, it's competitive, but the project itself is very compelling," Cole said. "There are very strong commitments to inclusion and local job growth. That will be very helpful to them as they seek additional funding sources. Everything they've done to date helps make a stronger case for these various federal programs."

Shareese DeLeaver-Churchill, a spokeswoman for Gov. Larry Hogan, said state officials and Sagamore have been discussing how best to move forward with obtaining federal funds.

"The administration remains a strong advocate for redevelopment in Baltimore City, including the transformational Port Covington project," she said. "The administration will support this and all initiatives that put people back to work, promote economic development, and have the potential to affect real change in Baltimore City."

Lawrence Brown, assistant professor at Morgan State's School of Community Health and Policy, wrote on Facebook that city officials should have "called Plank's bluff" and demanded more community benefits in the Port Covington negotiations, including better wages for workers and more affordable housing for the poor.

He predicted state and federal officials would provide funding for the project, but argued it is likely to increase — not lessen — racial and economic segregation in Baltimore. For instance, Hogan's decision to kill the proposed Red Line light rail connecting East and West Baltimore will mean that some of the city's poorest neighborhoods won't be connected to the system if it expands to Port Covington.

"One of the biggest issues is people in East and West Baltimore don't have connections to get to jobs," Brown said.

The Sagamore bonds represent the largest tax-increment-financing deal in the city's history, and among the largest in the country. The development also is in line to receive $760 million in various tax credits by virtue of building in an area state officials consider impoverished. The land includes the site of The Baltimore Sun's printing press. The Sun has a long-term lease on the property.

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