Baltimore development officials expressed relief yesterday that the General Assembly did not gut a popular but increasingly expensive historic tax credit program.
Although scaling back the state program extensively seemed possible earlier, what came out of Annapolis on Monday, when the 90-day session ended, was far less drastic, officials said. That's good news for Baltimore, with its many historic buildings.
"I think it's going from what we collectively thought was a debacle some months ago to something that is livable," said M.J. "Jay" Brodie, president of Baltimore Development Corp., the city's economic development arm. "Overall, I think it's really a win."
The legislation makes the 5-year-old historic tax credit less generous. Developers can cut their tax bill by 20 percent, rather than by 25 percent, of the cost to renovate older buildings. And the credit is limited to $3 million per project, where there had been no limit before.
The goal was to rein in a once-obscure program that could cost the state $57 million this year.
But by opting against an aggregate, statewide limit, legislators avoided a situation in which developers could not be sure they would get the credit in a given year, Brodie and others said. That could have made banks leery of lending money.
The legislation protects more projects in the planning stage than the original bill would have. It also kept a provision letting nonprofit groups or others with little or no state tax burdens receive the cash equivalent of the credit.
"The only downside from our perspective is it will probably depress the number of large projects," said J. Rodney Little, director of Maryland Historical Trust, which runs the program.
Officials said a major venture, such as the transformation of the old Montgomery Ward & Co. warehouse in Southwest Baltimore, would qualify for millions less in credits.
That should not be a concern, said state Sen. Barbara A. Hoffman, who heads the Senate Budget and Taxation Committee and helped shape the final bill. In those cases, the Baltimore Democrat said, "we'd write a bill for them."
At least one developer has questions about the bill. Wells Obrecht, owner of Obrecht Commercial Real Estate, wants to put apartments and offices in the former National and Gunther brewery plants east of Canton. Parts of the project will be grandfathered, but "big chunks" won't be because they are not as far along, subjecting him to the cap. Obrecht also is concerned about a provision that says the cap will apply to multiple phases of the same project.
The goal is to prevent "scams," Hoffman said.
"You can't take a $100 million project and split it into five pieces if it's really the same project," she said.
On downtown's west side, most projects are of "moderate size" and will not be affected by the $3 million limit, said Ronald M. Kreitner, executive director of WestSide Renaissance Inc. Key, larger projects are exempted from the restrictions.