Md. Insurance Administration move detrimental to Baltimore

The Maryland Insurance Administration’s plan to move from the corner of St. Paul and Lexington streets to the Montgomery Park Business Center in Southwest Baltimore would cost the downtown area 250 jobs and Baltimore City hundreds of thousands of dollars in revenue in the first year alone. But even worse, this move, along with other recent changes, threatens to slow the forward momentum downtown Baltimore has been experiencing lately, with implications for the entire city. Fortunately, it is not too late to stop this ill-considered proposal.

Downtown Baltimore, centered in and around the Charles Street corridor, has been the heart and soul of Baltimore’s economy for more than two centuries. Hundreds of entrepreneurs choose to locate in the central business district thanks to a combination of high foot traffic, density of businesses and affordable retail rents. It is because of these factors that retailers can exist and thrive here.

In recent years, we have seen a number of commercial buildings being converted to residential units, and many businesses have migrated to high-rent locations like Harbor East that look directly at the Inner Harbor. In some ways, this is encouraging for the city because it provides housing north of Lombard Street for downtown’s potential workforce, and locations such as Harbor East provide a high cost/high amenity option that some businesses are looking for. But downtown needs a core of major employers — corporate, nonprofit and governmental — for the area’s merchants to thrive. Small businesses have told the organization I lead, the Charles Street Development Corporation, that a trend of employers leaving downtown would significantly reduce their customer base, crippling them or even putting them out of business.

Downtown Baltimore has so much that is unique. We feature dining experiences, museums, sports facilities, entertainment venues, public transportation, hospitals, social clubs, residential options and more — all within walking distance of one another. There is really no substitute for the combination of amenities and experiences a vibrant urban downtown offers.

In an article this year in the Baltimore Business Journal, Robert Manekin, senior vice president at the commercial real estate firm JLL, noted that the MIA’s move would cause a decrease in taxes of over $250,000 just in the first year, plus a decrease in the assessment and tax collection of buildings that use the MIA building as a comparable. These taxes provide programs and services with citywide impact, including education, police and other vital public needs, and the city cannot afford to lose any of it.

This is by no means a knock against the Montgomery Park Business Center, which does have a significant role in the city’s economy. As the Baltimore Development Corporation has stated, outlying developments like Montgomery Park give companies that would otherwise move to suburban office parks an option within the city. This logic does not apply to the MIA, where moving to the suburbs was never under consideration.

State Comptroller Peter Franchot told a group of business leaders last week that Baltimore needs a "dramatic" effort to bring back shoppers and diners. Mr. Franchot is one of three members of the Board of Public Works, which will vote Jan. 2 on whether to move the MIA out of downtown. One thing the state can do that is easy and not “dramatic” at all to is keep its own agencies downtown, where they can do the most good for the city’s economy.

The bottom line is that a healthy mix of small businesses, large corporations and public agencies is essential to keeping Baltimore’s downtown a vital engine for the entire region. The Charles Street Development Corporation urges the Board of Public Works to vote “no” to this relocation and “yes” to a more prosperous Baltimore by keeping the Maryland Insurance Administration in downtown.

Kristin Speaker is executive director of the Charles Street Development Corporation and the Historic Charles Street Association. Her email is kspeaker@charlesstreet.org.

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