Mayor Catherine Pugh on Wednesday said she was taking steps to create an investment fund to help lure development to Baltimore’s most troubled neighborhoods.
The Democratic mayor said she planned to raise $55 million by leasing several city-owned parking garages and use the money to establish what she calls the Neighborhood Impact Investment Fund.
In her State of the City speech earlier this year, Pugh said she was seeking to establish an investment fund backed by private businesses that would spend $1 billion over four years in Baltimore’s poorest neighborhoods. But she offered few details at the time.
“My goal is to jump-start this investment fund and get others to invest in the fund,” the mayor said.
The fund will be designed to focus on the city’s historically-neglected neighborhoods that the federal government defines as “severely distressed” — a swath of the city that includes much of East and West Baltimore. She said the city’s contribution would help kick-start private investment through the fund, a strategy used in similar programs in Cincinnati, Detroit, New York City and San Francisco.
The fund would be managed by a new nonprofit entity that would be governed by a board of “business and civic leaders” along with city government officials, the mayor said.
No one has been selected yet to lead the nonprofit, but the mayor said she is looking for people with financial expertise.
The nonprofit’s goals would be to invest in a variety of real estate projects, including those offering affordable housing, market-rate housing and smaller commercial developments. Investments located within new federally approved Opportunity Zones also could flow through the nonprofit, city officials said.
The $55 million plan would need to be approved by the City Council and also by the Board of Estimates, which is controlled by Pugh.
Under the proposal, the Board of Estimates would approve the lease agreement between the city and the Maryland Economic Development Corp. for use of several city-owned parking garages. The state corporation would issue bonds to generate the $55 million for the city fund, and then use the parking fees to pay back investors.
In one of her first acts in office, Pugh nixed former Mayor Stephanie Rawlings-Blake’s plan to sell four of Baltimore’s downtown parking garages to raise up to $60 million for recreation centers. Instead, Pugh’s proposal is to lease those garages and use the proceeds for the development fund.
Pugh said she thought it better to lease, rather than sell, the garages because the city will get to “maintain its assets.”
“My goal is to bring back neighborhoods that have been underinvested in,” she said. “Trees don’t grow through houses overnight. That’s decades of neglect or under-investment.”
City Council President Bernard C. “Jack” Young said he preferred Pugh’s plan to Rawlings-Blake’s because he favored a lease agreement over an outright sale.
“I’ve been for leasing the garages for a while. I talked about the same deal with Mayor Rawlings-Blake. I don’t believe in selling our assets that are producing money,” Young said. “We’ve got to think about these distressed areas that haven’t seen any development in years.”