The Baltimore County Council is poised to vote Monday on a plan to give nearly $43 million in financial assistance to the developers of the stalled Towson Row project.
County Executive Kevin Kamenetz is urging council members to support the plan. He says it’s a smart investment from county taxpayers that will reap significant benefits as part of an ongoing revival of Towson, the county seat.
“It’s a huge win for the county,” said Kamenetz, a Democrat who is running for governor. “It’s going to provide a great return on investment for generations.”
Kamenetz has championed Towson Row since it was first announced as a massive mixed-use project by developer Caves Valley Partners in 2013. He said it would help continue positive momentum in Towson by adding residents and shops to a town where “the sidewalks roll up at 4:30” when offices start to close.
But the project stalled, and Caves Valley brought in Greenberg Gibbons this year as a co-developer. Greenberg Gibbons now says it needs county help to secure financing to get the project restarted.
Brian Gibbons, CEO and chairman of Greenberg Gibbons, is hopeful the County Council approves the plan on Monday.
“I think it’s the right thing to do,” he said. “It is such an important transformational project.”
More than a dozen county residents expressed concerns at a public hearing last week. Critics said the process was rushed and taxpayer assistance might be ill-advised. Some carried signs with the words “developer welfare” inside a red circle with a line striking across.
The financial assistance has the support of the Towson Chamber of Commerce and the pro-business Greater Towson Committee. Sage Policy Group economist Anirban Basu, who was paid $9,600 by the Kamenetz administration to produce a report on the deal, said local governments need to consider giving financial help to developers to attract high-quality projects like Towson Row.
Towson Row would include 1.2 million square feet of developed space — as big as the nearby Towson Town Center Mall — on a 5-acre property on York Road at Towsontown Boulevard.
Current plans call for a 220-room hotel, a 905-bed student housing complex, 250 apartments, 140,000 square feet of offices, 140,000 square feet of retail shops and a parking garage. Whole Foods was announced as an anchor tenant, but Gibbons now says that nothing has been finalized.
The Kamenetz administration is proposing a $42.9 million assistance package over five years to jump-start Towson Row.
Of that, $26.5 million is tied to two tax credits for the developers once the project was complete. Instead of taking the tax credits down the line and paying lower property taxes, the developers will pay the full amount of property taxes. The difference — $26.5 million — would be given to the developers up front, then would be balanced out by increased property tax payments over the next 10 to 12 years, according to the county.
The rest of the up-front money, $16.4 million, is a grant tied to the hotel tax. Once it’s open, the Towson Row hotel is projected to generate $16.4 million in hotel taxes over 20 years, according to the county.
Some residents urged council members to take their time or explore other options, such as loaning money to the developers. The financial assistance plan was announced with few details on Nov. 24, the day after Thanksgiving. Monday’s vote is less than four weeks later.
Council Chairman Tom Quirk said he’s prepared to move forward with a vote on Monday.
Quirk, who works as a financial planner, said he thinks the financial assistance is a good deal.
“I feel confident that this is something that will be a big success for the county and Towson residents will be glad to see this giant hole in the ground won’t continue to exist the way it is,” the Catonsville Democrat said.
Councilman David Marks, a Republican who represents Towson, has some concerns.
“Downtown Towson is being transformed, thanks to legislation this County Council passed,” Marks said in a statement. “We just need to make sure everything is right, because as we saw with the Towson Gateway issue, the executive’s office stops communicating once they get what they want.”
Towson Gateway is a county-owned property farther north on York Road that the Kamenetz administration is selling to Caves Valley for private development. It’s been beset by issues, including neighbors who opposed putting a gas station there and the Kamenetz administration cutting down trees on the property.
Back at Towson Row, Greenberg Gibbons will be 95 percent owner of its partnership with Caves Valley, the original developer. Caves Valley will be responsible for building the office building, and Greenberg Gibbons will oversee the rest.
If the county OKs its financial assistance, Gibbons said, he can finalize financing from a California-based pension firm. He hopes to move forward first with the student housing and the hotel.
It would take two years to build the student housing, which Gibbons is targeting for opening in summer 2020, before the fall semester that year. If the project falls behind schedule, Gibbons said, he’ll lose a whole year because student apartments need to be available at the start of the academic year.
“We have to go through the detailed site plan, architectural drawings and permits for a major building,” Gibbons said. “There’s so much that has to happen between now and this summer.”
Kamenetz also underscored the urgency of voting on Monday.
“There are no new facts that can come out by a delay,” he said. “The harm is that Greenberg Gibbons can lose their financing.”
Kamenetz rejected criticism that the process has been rushed.