The proposed Port Covington Tax Increment Financing (TIF) package for Under Armour's new headquarters may be the largest in Baltimore history, but let's not call it a "game changer," as did one city councilman and mayoral candidate.
The game is the still same: City officials continue to funnel public subsidies toward the pursuit of private profits by a few on the now much discredited assumption that somehow that will benefit the rest of us.
The requirement that a development project must only show it will not succeed "but for" the TIF is not law, but Board of Finance policy. This standard is not clearly related to the public good or values. Witness the fact that the city's largest three TIFS have funded a headquarters for the $29.1 billion Exelon Corporation in Harbor Point, an unneeded convention hotel, and now, presumably, Under Armour's corporate headquarters.
The countless people who watched angry Baltimore City residents atop police cars last spring must be stunned to hear that within 12 months, the city's response would include closed-door consideration of a half-billion dollar subsidy for yet another corporate headquarters.
Before we embarrass ourselves nationally and further deteriorate the public trust in the city's leadership, let's enact a value-based "fair development" framework, where public subsidies are assessed under basic human rights principles that speak to both common sense and moral imperatives. In 2013, Baltimore-based human rights group the United Workers proposed as much demanding: equity, universality, participation, transparency and accountability.
Equity means development policies must enable equality of opportunity and outcome by prioritizing populations and communities with the greatest need, which in our city means communities of color. This requires asking: Will 51 percent of the construction jobs relative to Port Covington go to city residents? Will the entertainment and hospitality jobs on the Under Armour campus pay living wages or, at least, allow the unfettered freedom to organize? Will all these jobs prioritize Baltimore citizens, and will recruitment maximize opportunities for workers of color?
Historically, subsidized economic development projects do not include a "work with dignity" analysis. But the idea that any job is sufficient, regardless of pay and benefits, serves to only deepen the structural inequality and structural racism we must overcome.
Universality means that the city's goals in development shall be to increase every resident's ability to access the resources required to meet their fundamental needs, and no single development goal shall be pursued to the detriment of other fundamental needs.
How many of the 750 homes for sale or rent in Port Covington will be available to those with incomes less than $25,500 annually — the sector with the greatest need in the metro area? Forget the city's toothless inclusionary housing ordinance; it has produced roughly 30 affordable units in eight years.
Will increasing property values radiate from the Port Covington campus and lead to the involuntary displacement of renters? Will the property tax circuit breaker and homestead tax credit provide enough protection for homeowners on fixed incomes?
Port Covington property taxes will be earmarked for TIF bonds for years to come. They will not go to pay for city services. The TIF zone exists in isolation, the offspring of a municipal parent, but one that doesn't contribute directly to the urban household. Only when the bonds are retired in 30 years, does Port Covington start pulling its weight.
During those 30 years, the borrowing needs of others sectors and communities will likely go unabated: Neighborhoods in need of school rehabilitation, parks and recreation maintenance, fire station repair, vacant housing demolition and affordable housing development.
Do TIF bonds hurt city bond ratings? This may seem esoteric to most, but it is critical to us at Baltimore Housing Roundtable, as we ask city officials to devote annually $20 million in bonds for permanently affordable housing and another $20 million for community jobs deconstructing vacants and urban greening. Initial reports show the first round of Port Covington bonds will eclipse our entire "20-20" annual ask, totaling $49 million in the first year of what will be many years of public debt earmarked for a corporate headquarters.
The multi-step TIF process precludes fair development's requirement of transparency and informed public participation necessary to explore the above questions and establish human rights based accountability standards. TIF details remain out of public view until the final stage when the project emerges to the City Council after being crafted by the Baltimore Development Corporation, Board of Finance, bond counsel and financial advisers. This journey is hardly transparent, and leaves end-stage legislators ill equipped to interrogate intelligently. According to The Sun, the city already has declined to share the full estimate of the costs associated with the proposal, including interest payments and issuance costs, which are likely to add millions.
If we are going to treat a few as more important than the vast majority of our residents, isn't it time we use a human rights based development framework to consider their requests, and to envision our own?
J. Peter Sabonis is the director of legal strategies for the National Economic and Social Rights Initiative and a member of the Baltimore Housing Roundtable. He can be reached at email@example.com.