Executives with Tradepoint Atlantic, the industrial and logistics campus being developed on the former site of Bethlehem Steel in Sparrows Point, say they plan to pare down a request for millions of dollars in government-assisted financing for infrastructure and other needs at the site.
Aaron Tomarchio, a senior vice president at Tradepoint Atlantic, said the financing request submitted to Baltimore County — initially estimated to be up to $150 million — could end up being revised to less than $100 million.
“Conversations have been going on with the county, narrowing down specific infrastructure requirements,” Tomarchio told a crowd of more than 100 people at an open house Thursday at Sparrows Point.
Tradepoint Atlantic bought the former steel mill in 2014 and has been working to redevelop the site. Tenants so far include warehouses for FedEx, Amazon and Under Armour, as well as an auto-importing operation run by Pasha Automotive and other businesses.
But company officials say they need help in building roads, water lines and sewer pipes to and on the 5-square-mile property. Without help in paying for that infrastructure, company officials say it will be more difficult to lure manufacturing companies with higher-paying jobs.
Eric Gilbert, Tradepoint’s chief development officer, said the site is a prime location with vast possibilities. But the question, he said, is “how do we build this public infrastructure to optimize what we have?”
Fronda Cohen, a spokeswoman for Baltimore County, confirmed that the county is working with Tradepoint Atlantic, but declined to discuss any target for the costs of the infrastructure financing. She called the talks “continuing and active.”
The plan proposed by Tradepoint Atlantic is called tax-increment financing, commonly known as a TIF.
Tradepoint Atlantic is running out of time to get a deal approved under the administration of County Executive Don Mohler, who has been supportive of the deal in concept. Mohler ordered a consultant to review the TIF proposal to see whether it makes financial sense for the county government and taxpayers.
Following the November election, a new county executive and County Council members will be sworn into office during the first week of December.
Cohen said Mohler “is hopeful that this is something we can work through with the council, with community input, during this administration.”
County Council members would need to approve multiple pieces of legislation to move the financing deal forward. The council has two more meetings scheduled this term, and no legislation regarding the Tradepoint TIF has been introduced. Under the council’s typical timetable, legislation to be considered for a vote in November would need to have been introduced by now to schedule a council work session and public hearing.
The county’s charter, which spells out how the government must operate, requires a 10-day period to pass between the introduction of legislation and a vote — but that provision can be overridden by a vote of at least five of the council’s seven members.
If the fate of the tax financing does fall to the next county executive, the two candidates vying for that position have expressed support for Tradepoint Atlantic generally but stopped short of endorsing the financing deal.
Republican candidate Al Redmer Jr. said he would wait to make a decision until he sees a report with more details about the proposal, but said, “I have no bias against TIF financing.”
Democratic candidate Johnny Olszewski Jr. also said he’d wait for the consultants’ report before weighing in.
“If there is a project that is worthy of at least serious consideration of that type of support, I believe Tradepoint fits that model,” Olszewski said.
Tradepoint Atlantic has made contributions to both the Olszewski and Redmer campaigns, according to state campaign finance reports.
If the financing deal is approved, the Maryland Economic Development Corp. would issue bonds to pay for the infrastructure. The proceeds from the bond sale would pay for the infrastructure work.
The bonds would be paid back using a portion of the property taxes that Tradepoint Atlantic will pay in the future. The value of the property, and therefore the amount of property taxes paid, is expected to increase as the site is developed.
Such arrangements are often controversial because they dedicate a portion of the taxes to bond payments instead of to general government services such as schools, public safety or public works.
Tradepoint Atlantic has launched a campaign called “Revitalize Sparrows Point” to promote the need for the financing deal. The company named former Baltimore County Executive Ted Venetoulis as the volunteer chairman of that effort. The campaign has drawn the support of dozens of local businesses and community organizations.
The company has been laying the groundwork for a TIF deal for years. In 2016, Tradepoint commissioned an economist’s report that suggested government help with financing for infrastructure. Then in 2017, the Baltimore County Council approved a resolution that opened a five-year window for a possible TIF deal, a necessary preliminary step.
Tax-increment financing has been used as an economic development tool in other local areas. About $33 million worth of bonds were issued under a TIF agreement to jump-start the Metro Center project in Owings Mills. The county built a garage, library and community college there, while a developer is building shops, apartments, a hotel and office buildings.
In Baltimore City, officials have authorized up to $660 million in bonds to pay for infrastructure at Port Covington, though no bonds have been issued yet. Port Covington is envisioned as a mini city with Under Armour facilities, shops, homes and more. The Baltimore Sun is a tenant at Port Covington.
The city’s second-largest TIF was $301 million for the city-owned Baltimore Hilton downtown. The city also authorized more than $100 million in bonds for the Harbor Point project under construction by Beatty Development.