Port Covington developer pushes request for record tax deal with unprecedented ad campaign

"It's a huge preemptive strike," expert says of Port Covington developer's unprecedented ad campaign.

Even before asking Baltimore for the largest special tax deal in the city's history, developers of the multibillion-dollar Port Covington project embarked on an unprecedented campaign to influence public opinion that has cost at least hundreds of thousands of dollars.

The muscular marketing effort by Under Armour CEO Kevin Plank's Sagamore Development highlights the jobs and public amenities it says will be made possible if the city agrees to float $660 million in bonds to build infrastructure for the massive project.

Analysts estimate the campaign has cost more than $1 million — including more than $500,000 in television commercials, plus radio and newspaper ads and a robust social media presence.

It's a response to critics, some of whom say the deal would further enrich Plank, a billionaire, at the expense of city services in Baltimore's poorer neighborhoods.

M.J. "Jay" Brodie, who led the Baltimore Development Corp. under four mayors, said he's never seen such a campaign in the city.

He noted that previous tax deals have been for far less. The cost of infrastructure at Harbor Point, for instance, was $107 million. It's $535 million at Port Covington.

"I don't remember any marketing campaigns before from developers who had an ask before the city," Brodie said. "I don't recall any advertising by Michael Beatty at Harbor Point or John Paterakis and H&S Bakery on their various requests from the city for Harbor East."

Sagamore was running ads even before details of the request were made public in March, according to Federal Communications Commission filings.

During the hotly contested Democratic primary for mayor, Sagamore ran more TV ads some weeks than the leading candidates. And Sagamore was one of the sponsors of a "Maryland Party" last week in Las Vegas — an event attended by Gov. Larry Hogan, Mayor Stephanie Rawlings-Blake, Democratic mayoral nominee Catherine E. Pugh and City Councilman Carl Stokes, chairman of the committee that must approve the tax deal.

As guests left the party, they were given black ball caps promoting Sagamore's new rye whiskey. On the caps, in bold letters, was a web address: BuildPortCovington.com.

Greg Hoplamazian, assistant professor of communication at Loyola University Maryland, call the marketing blitz "a huge pre-emptive strike."

"They are trying to start the conversation and control the conversation," he said. "They don't necessarily need the public's support for this deal, but if they have it, it becomes harder for the politicians to vote against it."

Tom Geddes, CEO of Plank Industries, says one goal of the marketing campaign is, indeed, to counteract some of the criticism the developers anticipate.

But it's also to highlight how genuinely great the company's officials say the development will be. The project is to feature a new Under Armour headquarters, homes, offices, restaurants, stores and hotel rooms.

"We're excited to be a part of building something great in this city and proud that Baltimore is home to one of the largest urban renewal projects in America right now, a redevelopment that will bring tens of thousands of jobs at a time when the city needs a major economic boost," Geddes wrote in an email.

Port Covington is mostly open or industrial now. It is home to The Baltimore Sun's printing plant.

Geddes acknowledged that the size and scope of the marketing campaign is unlike any in recent years for a new development.

"The budget for our public communications is proportional to the size of this transformational project," he said.

'A substantial buy'

About a week before the public learned of Sagamore's request, company officials bought ad time during NBC programming such as "Today," "The Voice" and "Meet the Press." On Fox 45, Sagamore purchased ads during the local morning news, "Family Feud" and "New Girl," among other shows.

While the FCC lists more than $400,000 in ads purchased by Sagamore on TV stations WBAL and WBFF, other stations have declined to post full orders and invoices from the company.

The filings for WMAR, for instance, show that the company purchased more than $20,000 in ad time. But Bill Hooper, the station's vice president and general manager, said the true figure was similar to local competitors.

WMAR does not post full information about advertising unless the issue is of national concern, Hooper said. Port Covington also doesn't involve a vote by the general public, as an issue such as approval of casinos did. Proponents and opponents of expanding casino gambling into Prince George's County clashed in a high-dollar ad battle in 2012.

"This is purely just advertising trying to influence the public that this is a good idea," Hooper said of Port Covington. "It's a substantial buy in the marketplace and we got a substantial amount of money but I don't feel comfortable disclosing the amount."

Sagamore also has purchased full-page advertisements in The Baltimore Sun. A Sun spokeswoman declined to comment on the cost of the ads.

The TV ads include the catchphrase "We will build it. Together," a reference to the public-private nature of the development. They show a racially diverse group of people touting Port Covington's promised benefits — such as a projected 26,500 new permanent jobs, space for manufacturing and a projected $4.3 billion annual economic impact once built.

"I'll be able to play in one of the new parks," a boy says enthusiastically.

The development is expected to generate $1.7 billion for the city over 41 years, or an average of $40.3 million annually, according to an analysis prepared for the city by Columbia-based consultant MuniCap.

The ads don't mention criticism of tax increment financing. Under that system, the city sells bonds to investors to provide the developer with money to pay for infrastructure improvements and other project costs. The city then uses the increased tax revenue generated by the development to pay off the bonds and their interest.

Critics contend TIFs divert money for decades from the city's general fund, where it could be used to pay for needs such as firefighters and schools.

Port Covington is also eligible to receive about $760.4 million in tax breaks because it is located in an area the city and state have deemed impoverished.

The development is not projected to contribute significant property tax revenue to the city until about 2040, because most — if not all — of the tax dollars each year would go toward paying off the debt.

The bonds sold to investors are projected to accrue about $1.4 billion in interest, for a total cost of more than $2.1 billion.

The tax deal benefits Sagamore financially, too.

According to MuniCap's projections, Plank's company and its investors will make $400 million more with the tax increment financing deal than they would without it. MuniCap's analysis does not take into account how the project would affect the state's funding for city schools, which is determined in part by property values.

Charly Carter, director of Maryland Working Families, a progressive political organization protesting the tax deal, said she believes the ad campaign isn't telling the public the full story.

"We're shocked by their aggressive advertising," Carter said. "If it's really so good for Baltimore, why do you need to sell it so hard? What's really behind the curtain?"

Carter acknowledged that Baltimoreans generally seem to have a high opinion of Under Armour, and the company is trying to leverage that.

"They're approaching this project as though they were selling an athletic shoe," she said. "They're trying to make it seem cool.

"People in Baltimore are very proud of Under Armour. But there are too many unanswered questions for any credible community leader to be selling this to Baltimore."

'What's a TIF?'

Sagamore released an online video called "What's a TIF?" to combat criticism.

"Your taxes do not go toward a TIF," a narrator says in the video. "If you live in Sandtown, you pay zero. Pigtown, zero. Canton, zero. … A TIF is not a tax subsidy, not a tax break and not a handout."

Geddes said the video "is designed to help people understand that TIF dollars do not come from city residents."

"We felt it was important to highlight that rather than taking money from Baltimore, the TIF brings money to Baltimore and makes possible billions in private investment and tens of thousands of new jobs over a long period of time," he said.

Stokes' economic development committee has not yet scheduled a hearing on the bills that would authorize the tax deal. He said he's trying to stay open-minded about the proposal. But he acknowledged there is tremendous pressure to pass the measure quickly.

"This is a train that has left the station and is coming very hard and fast," Stokes said. "This whole campaign is to convince us all we're dealing with home-grown good guys and we should do as much as we can to take care of them."

City Councilman Bill Henry, vice chairman of the economic development committee, said Plank perhaps understands messaging in a way other developers don't, given his "wildly successful retail operation that clearly knows what makes people happy."

But Henry said he wondered if such an ad campaign wouldn't amount on some level to lobbying, which is strictly regulated.

"If the point is to sway the 15 members of the City Council into voting for it, I hope they're dotting all their I's and crossing their T's," he said.

Keisha Allen, president of the Westport Neighborhood Association near Port Covington, said she doesn't fault the developers for trying to get their message out. But she said she's not sure whether it's persuading all of her neighbors.

"I can appreciate them explaining themselves through marketing," she said. "Baltimoreans are smart, and perhaps smarter than people give them credit for.

"It's great marketing, but people are still going to have their own opinions."

Baltimore Sun reporter Natalie Sherman contributed to this article.

lbroadwater@baltsun.com

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