The Rawlings-Blake administration on Monday introduced a series of bills before the Baltimore City Council to authorize a special tax district and float $660 million in bonds for Under Armour CEO Kevin Plank's massive Port Covington development in South Baltimore.
City Council President Bernard C. "Jack" Young said he was bullish about the project, but wants to see Plank make certain deals with nearby communities before approving the subsidies. Young called plans for the project "wonderful" and said he believed it could transform Baltimore into a Los Angeles of the East Coast.
"We want to see inclusionary housing, affordable housing in there," Young said. "We want to see certified apprenticeship programs. We want to make sure minorities have a stake in Port Covington. I think this is going to be a catalyst to put the city on the level of, I'll say, L.A. It'll be a destination. This is going to spur growth of the city."
The deal would be the largest tax-increment-financing project in Baltimore's history.
About $535 million of the $660 million would go to infrastructure with the rest going to fees and related costs. The bonds, which would be paid off with future property taxes from the project, are projected to accrue about $1.4 billion in interest for a total cost of more than $2.1 billion. Plank's development firm says it plans to attract more than $5 billion in private investment for the project.
Under tax increment financing deals, the city issues bonds to give the developer 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 such deals divert money for decades from the city's general fund, where tax revenue could pay for services, such as firefighters and schools.
The community group Baltimoreans United in Leadership Development on Monday called on the council to "not fast track" any vote on Port Covington until "specific deals are negotiated to benefit neighborhoods citywide."
"BUILD calls on the City Council to make Sagamore Development treat the City of Baltimore as an investor," the Rev. Andrew Foster Connors, BUILD's co-chair said in a statement. "As such, the City must have a specified return on our investment in writing as part of the agreement — to include a share of all profit on the project, 51% local hiring on all jobs with claw backs, an equal investment in affordable housing and blighted neighborhoods, and a written guarantee to hold education funding harmless."
Young said he was disappointed that Harbor Point, the most recent project to use tax increment financing, was not hiring a majority of its workers from Baltimore. Around 30 percent of Harbor Point's employees are from Baltimore. He said he hoped Port Covington would hire more Baltimoreans.
"It does concern me," Young said. "Most of these companies already have their workforce when they come here. We're tracking that and we're watching that. I showed my displeasure to them. I want to see more Baltimore City residents hired for these jobs."
Meanwhile, City Council member Mary Pat Clarke introduced a resolution calling on the city to establish new rules — including requiring living-wage jobs — before agreeing to future tax-increment-financing projects.
"It sets a framework," Clarke said. "It does not get into negotiations for individual projects, but sets some overarching principles that would have to be met. Jobs should pay living wages and should have health benefits and provide permanent skills and training for future careers for city people."
The Port Covington redevelopment is expected to generate $1.7 billion for the city, or an average of $40.3 million annually, after tax credits, debt service and other expenses, according a consultant's projections. Plank's private real estate firm, Sagamore Development, plans to build 15 million square feet in new construction, including an Under Armour headquarters, residences, offices, shopping and hotel rooms.
The development is expected to create thousands of new jobs.
The analysis, by consultant MuniCap, measures the costs to the city generated by the 12,000 people expected to live in the area, including students, but it does not take into account how the project would affect the state's funding for city schools.
Baltimore Sun reporters Yvonne Wenger and Natalie Sherman contributed to this article.