Baltimore City

City Council begins work on Port Covington tax deal

The Baltimore City Council began work Tuesday on potential changes to the proposed tax deal for Under Armour CEO Kevin Plank's waterfront Port Covington development.

In front of about 200 people gathered at the War Memorial Building in Baltimore, the council's economic development committee began addressing several concerns that have been raised about the $5.5 billion project, and the $660 million tax-increment-financing deal that Plank is seeking from the city.


Officials and advocates have raised questions about the project's impact on school funding, whether it would pay workers a living wage, and the amount of affordable housing planned.

"We're going to take up a number of items of concern," said Councilman Carl Stokes, the chairman of the committee. He said one outcome of the work sessions could be a large "community benefits agreement" attached to the tax-increment-financing deal.


Stokes said the committee would hold two more work sessions in the coming weeks.

The Port Covington project, which is being proposed by Plank's Sagamore Development Co., is to include offices, homes, shops and restaurants. It is expected to employ thousands of workers in South Baltimore.

At Tuesday's work session, council members expressed optimism the city and the developers could reach agreement on the areas of concern.

"It's a good project," said Council Vice President Ed Reisinger. "It's going to help the city of Baltimore. We have to have a win-win situation for the citizens of Baltimore."

City Council President Bernard C. "Jack" Young said he believes Sagamore is committed to helping local workers.

"They are committed," he said. "I have them at the table."

Councilwoman Mary Pat Clarke said she wanted to make sure that any deals cut with the developer are not "goals," but legal requirements.

"A hand shake, a goal, is nothing," she said. "We need binding legislation."


Among the issues the council plans to address are:

•The impact on school funding. City officials project that the Port Covington deal could cost city schools $315 million in state aid over 40 years. That's based on the belief that a projected wealth increase at Port Covington would likely lead to a reduction in formula funding. Others say that estimate is much too low — they say the lost funding could exceed $1.5 billion. Supporters say state lawmakers have pledged to fix the funding formula, and tax revenue from the project should exceed any losses from the wealth gain.

•The wages paid on construction jobs. Sagamore has offered to pay prevailing wages — about equal to union wages — on a quarter of the infrastructure work on the site. But union officials say that's not good enough. They want the company to guarantee greater portions of the work for union workers. Reisinger introduced an amendment on behalf of the unions Tuesday. "We think this is the best way to put local Baltimore citizens to work," said Rick Binetti, a spokesman for the laborers' union.

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•Profit-sharing. The group Baltimoreans United in Leadership Development is demanding a profit-sharing agreement between the developer and the city. Tax-increment-financing deals typically include such provisions. But the Baltimore Development Corp., the city's development arm, says it cannot negotiate such an agreement until the sale of $660 million in bonds is authorized.

•Local hiring guarantees. BUILD and other advocates are also seeking a 51 percent local hiring guarantee for all jobs related to the deal. Under a city ordinance, a majority of new jobs created by the development must go to Baltimore-based workers.

•Affordable housing. Sagamore has set a goal of 10 percent affordable housing at Port Covington, but Stokes has introduced a bill backed by advocates for the homeless that would require at least 20 percent of housing units to be set aside for low-income residents. Councilman Bill Henry wants to pass a citywide law making a 10 percent affordable housing a requirement, not a goal.


•Size of the tax deal. An independent consultant hired by BUILD expressed support for the subsidy, but said it could use a haircut. "The TIF should probably be renegotiated to only include the type of infrastructure required to get this project off the ground," said Carson Bise, the owner of TischlerBise Inc. "Kayak landings, green space, wetlands — these are aesthetic improvements."

Sagamore has proposed a waterfront development that would include a new headquarters for Under Armour, restaurants, shops, housing and a manufacturing plant, among other features. The company has asked the city to float $660 million in bonds to build infrastructure for the project. It would be the largest such deal in Baltimore's history. Future taxes paid by the developer would go toward repaying the bonds.