The view from Laureate Education Inc.'s downtown offices is going to get a lot better. The city's decision to give a $3.5 million tax break to the developers of the latest office-residential complex planned for Harbor East means Laureate - and its 450 employees - will remain in Baltimore. It also means the developers won't have to go hunting for an office tenant to anchor their $201 million project known as Harbor Point. How accommodating of the city.
What rankles about this deal is that both Laureate, the former Sylvan Learning Systems, and the developers - H&S; Properties Development Corp. and Struever Brothers Eccles & Rouse - have benefited in the past from such incentives. The last time Laureate's owners considered relocating, it was known as Sylvan Learning Centers and the city and state offered the company an incentive package to stay. (When the expected increase in new jobs didn't materialize, Laureate, to its credit, repaid the city $500,000.)
This deal has been artfully structured so that the tax break is used by the developer to offset Laureate's rent at the new 27-story office-condo-hotel complex at 800 Aliceanna St. While the developers don't directly benefit, the 15-year PILOT (payment in lieu of taxes) does guarantee them a top tenant.
This is the latest in a long line of city incentives that have helped develop Harbor East. Millionaire baker-developer John Paterakis built his successful Marriott Waterfront hotel with $20 million in public subsidies. His Spinnaker Bay condominiums also benefited from a $13.6 million PILOT. The Struever firm, H&S;' partner on Harbor Point, has received city benefits on several of its city projects.
There's no question that the city has benefited from this redevelopment - more jobs, an increasing tax base, an improved cityscape. But these developers epitomize success, and Harbor East is thriving today. Shouldn't they be able to stand on their own by now? Couldn't the developers negotiate their own deal with Laureate to lock in a tenant at a price beneficial to the educational learning company?
When the Baltimore Development Corp. looks to keep a company from relocating out of the city, the goal is "not a penny more" than what it would take to keep the firm here. The same thing should be said of public incentives for areas that have been successfully redeveloped.