Baltimore County rethinking tax break worth $3 million a year to Beth Steel


Baltimore County officials want to take another look at the agreement that gives Bethlehem Steel Corp. a $3 million-a-year tax break in exchange for the rights to 300 acres of land, but they say they won't be deterred from trying other development projects.

County Executive C. A. "Dutch" Ruppersberger III said he will review the 7-year-old agreement once he gets a recommendation from his economic development department. The department is reviewing whether the county should take title to the Sparrows Point property despite serious concerns, including potential environmental hazards.

Mr. Ruppersberger said he wants to reach a decision as soon as possible. "This issue has been on the table too long."

Although the Bethlehem Steel project was the county's first foray into land development, county officials say it won't be the last.

County Council Chairman Vincent J. Gardina said the county is considering a takeover of several residential and commercial projects to help revitalize older neighborhoods. He wouldn't specify the projects, but said the county can structure the arrangements to avoid mistakes made in the Bethlehem Steel deal.

"Back in 1988, they probably should have done a better job evaluating the project," the Perry Hall Democrat said. "It will make us look more closely at these arrangements in the future."

He and other council members, however, also say they are uneasy about corporate tax breaks.

"Unless we can be fair and give tax breaks to everyone, it's not fair to pick out one business," said Councilman Joseph Bartenfelder, a Fullerton Democrat. He said he hopes the county takes the Sparrows Point land and develops it, making the question of tax breaks moot.

At the time the county negotiated the land deal with Bethlehem Steel, the company was being battered by imports and appeared to be on the verge of bankruptcy. Employment at the Sparrows Point plant had dropped from 30,000 in the 1950s to about 8,000.

In the negotiations, the company made it clear that it believed it was paying more than its fair share in county utility taxes. The tax is 7.5 percent of a company's utility bill, and Beth Steel is the county's largest corporate electricity user.

The county agreed to phase in a reduction of the company's utility tax bill, to the present ceiling of $600,000, and agreed to take over a fire station at the plant. The state, meanwhile, agreed to take over seven miles of roads built by Bethlehem Steel.

In exchange, the county was to receive title to five parcels of land.

Economic Development Director Robert L. Hannon says the county held back on taking control of the land for several reasons, including the recession, concerns about development costs and the risks of environmental hazards.

But he and other county officials say the benefits given to Bethlehem Steel were a fair bargain -- even without the land. The tax break helped the company invest more than $400 million in upgrades and new equipment at the plant and keep 5,300 jobs, the county says.

Still, Mr. Gardina says he worries that by providing corporate tax breaks, the county will become involved in a bidding war with other jurisdictions trying to attract and retain business.

"I really think there are companies that are trying to take advantage of the local governments," he said. "We could be taken for a ride."

But Councilman Stephen G. "Sam" Moxley, a Catonsville Democrat, sees little alternative to joining a bidding war. "It's a bit of keeping up with the Joneses."

"If we don't take care of the business community, it doesn't matter what you do in the housing areas," he said. "The cancer spreads."

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