A proposal endorsed by the Downtown Partnership of Baltimore to raise the surcharge on commercial buildings in the city's central business district to help pay for municipal services such as trash pickup and green space upkeep ought to be welcomed by the city Board of Estimates, which must approve the change. With the city facing a $121 million budget shortfall next fiscal year, Mayor Stephanie C. Rawlings-Blake already has said some cuts in taxpayer-funded services are inevitable. The downtown business community's offer to help out by increasing its own contribution to the area's upkeep ought to be downright irresistible.
Mind you, downtown property owners are supporting what amounts to a tax hike on themselves not just out of the goodness of their hearts, but because to do otherwise would risk killing the goose that laid the golden egg. Downtown — especially the Inner Harbor area — is an economic engine for the whole state, as well as Baltimore's premier tourist destination. No one wants to see the 150,000 people who visit the area every day turned off by uncollected trash, neglected grasses and shrubbery or fears about public safety.
The plan would finance improvements to the area through an increase in the surcharge on assessed property value, which would grow by 7 cents, from 14.30 cents per $100 of assessed value to 21.30 cents per $100. Owners of a three-story, mixed-use building, for example, would pay about $300 in additional fees annually. For a large, Class A office building with 500,000 square feet, the increase could be as much as $95,000 a year. That sounds like a lot, but compared to the value of the buildings — and the amount they generate in rent — it is a relatively small contribution.
Moreover, the increase will do little more than allow the Downtown Partnership to tread water. It would raise an extra $2.2 million a year if property values held steady, but given the recession and the poor real estate market that has contributed to a 20 percent vacancy rate in downtown offices, that's not likely. Supporters of the plan think a more realistic scenario is a 15 percent drop in assessed property values, which would mean the higher surcharge would generate an extra $1.2 million a year.
It is heartening that downtown property owners recognize they have such a vested interest in the health of the city's business core that they should effectively raise their own taxes to fund continued safety and aesthetic improvements. At a time when everyone seems to want more services and lower taxes, it's nice to see businesspeople realize that sometimes our own good is best served by sacrificing for the collective interest.
Moreover, it's not as though the public hasn't sacrificed for them. The redevelopment of downtown has been encouraged by all kinds of tax breaks and publicly financed initiatives that have made the city an attractive place to do business. Who can forget former Mayor William Donald Schaefer's chilly plunge into the National Aquarium pool to stir up interest in the Inner Harbor's potential — or the countless deals he cut to lure skeptical businesspeople back to the city's core? The property owners may be acting out of self-interest when they raise taxes on themselves to protect their investments, but they're also giving back to the public that's supported them through good times as well as bad.
Critics will surely note that it's easy for the property owners to push for a 7-cent surcharge increase; after all, they can just pass the costs on to their tenants. And it is certainly true that tenants may be finding it harder to stay downtown, especially since one of the responses Mayor Rawlings-Blake has proposed to the city's budget crisis is to increase parking taxes.
But even if the property owners pass all of the cost on to their tenants in the form of higher rent, the impact will probably be minimal — in most cases, mere pennies per square foot. Yet the potential benefits are likely to be substantial, not just for the businesses but for the city as a whole. The projects the Downtown Partnership has in mind include more lighting and surveillance cameras to improve security, and creating or improving parks and public spaces downtown.
Baltimore can't afford to let its downtown, which has come to be the public face of its civic renaissance, run down and lose its appeal. If the city presently can't afford to make the kind of investments needed to protect that image, the business community should be ready and willing to pitch in. In doing so, the members of the Downtown Partnership deserve thanks for showing how a small collective sacrifice can make a big difference in the life of a great city.