Officials see growth as help for budgets

OCEAN CITY — OCEAN CITY - Weary of budget cuts and tax increases, Maryland's local leaders are focusing on large housing, hotel and commercial construction projects to generate money for services and reshape their communities.

But the impending development explosion around the state poses a challenge for the state's largest city: Can Baltimore keep up?


"We are absolutely competing," insisted Mayor Martin O'Malley yesterday, after appearing in a panel discussion on economic growth with Prince George's County Executive Jack B. Johnson and an economic development official leading the effort to redevelop a former Navy facility in Cecil County.

But while Johnson and Bainbridge Development Corp. Chairman Harland Graef pointed to maps of new homes and offices and spoke of the millions in tax revenues that their localities would soon receive, O'Malley brought no drawings or statistics.


Baltimore can grow and prosper, O'Malley said during the Maryland Association of Counties conference that drew hundreds of local officials to this seaside resort. To lay the foundation, the city must reverse its population decline, keep its streets safe and its schools healthy, he said.

"We are no longer content in city government to manage shrinkage," the mayor said. "We have $2.5 billion in new investment in the city, and $2 billion in the pipeline," he said, but "a lot of it is in small projects, individual homes."

By contrast, other areas of the state are planning huge development projects that will transform neighborhoods and generate tax dollars.

"We have $7 to $10 billion in permits to develop," Johnson, the Prince George's executive, said. "We are actually booming in every aspect of development."

Johnson described how the National Harbor project by the Peterson Co. will remake the banks of the Potomac River with 3,500 hotel rooms and other buildings on more than 200 acres. "It's going to generate unbelievable opportunity," he said. "It's the greatest location on the East Coast, right across from downtown Washington."

In northern Prince George's, a developer is embarking on a regional mall and other projects on more than 2,000 acres.

The Bainbridge project in Cecil County for 1,250 homes and more than 4 million feet of commercial space should generate yearly tax revenues of $47 million for the state, and up to $17 million for the county, Graef said.

Some observers say Baltimore is trailing the wave.


"The City of Baltimore can't keep up because they have no leadership. Every place is booming except the City of Baltimore," said Comptroller William Donald Schaefer, the former mayor and governor, who is an incessant O'Malley critic.

"In Somerset County, in Crisfield, they are putting up condos, and in Baltimore they can't even keep the streets clean."

"We have different strengths than these jurisdictions," O'Malley countered, saying the city was focusing on removing abandoned housing and building on the strengths of its universities, hospitals and parks.

"I know it will come as a great disappointment to some, but we are getting our act together," the mayor said.

The growth theme of this year's counties conference represented a significant shift in dialogue from the past. Most recently, county officials have paid most attention to the impact of state budget cuts and on new methods to control and manage development.

While county officials believe that more state cuts lie ahead, the impact should be eased in many places by new property tax revenues generated by development.


In a speech he is expected to deliver today, Gov. Robert L. Ehrlich Jr. "is going to talk about the positive impact on the state and county governments that growth has," said Paul E. Schurick, communications director for Ehrlich.

As development continues, local officials continue to grapple with making sure roads, schools, water and other government services keep pace.

In Carroll County, officials are seeing the results of new development regulations, even as they lose lawsuits stemming from a recently expired one-year construction ban, said Julia Walsh Gouge, president of the Board of Carroll County Commissioners.

"We are beginning to achieve our goal of having growth pay for growth, and not have the burden placed on those who have lived there all their lives," Gouge said.

Sun staff writer Timothy B. Wheeler contributed to this article.