Baltimore's sprawling enterprise zone

Much of the landmark Inner Harbor developments are in the neighborhood of three decades old (Harborplace turned 30 officially in 2010), which lands them somewhere short of historic. Unfortunately, the project's genesis is fading even as many of the pioneers behind it, from James Rouse to William Donald Schaefer, have exited the stage, too.

How many remember what the Inner Harbor looked like before there were shops, an aquarium and other tourism attractions? A half-century ago it was rotting warehouses and piers. The adjacent Inner Harbor East was dominated by the Allied Chemical plant, until it went out of business in 1985 and left behind a legacy of chrome ore process residue.

Who could have imagined what they would become? Their transformation was made possible by government's willingness to invest tax dollars to nurture visionary development. Now, it seems as if they have always been there — so central are these projects to Baltimore's downtown, its public image and its employment base.

It is through this lens that we should judge the 30-year-old enterprise zone program and its mission creep, as recently reported by The Sun's Scott Calvert and Jamie Smith Hopkins. What began as an effort to help truly impoverished sections of the city — beginning with Lower Park Heights — has become a resource for the more glittery waterfront projects of Inner Harbor East and Canton.

Has the expanded enterprise zone tax credit program strayed from its original intent? Absolutely. A generation ago, Baltimore was far more focused on holding onto its industrial past, and enterprise zones were seen as a means to do that, to revive struggling city businesses or attract new ones and to spur growth in adjacent neighborhoods.

Has the modern, expanded interpretation of enterprise zones been at the expense of neighborhood development? Many have grappled with that issue over the years but, ultimately, there is precious little evidence that encouraging waterfront development has somehow shortchanged other parts of the city. (For the record, The Sun benefited from the program in 1992 when it chose to relocate its printing plant from Calvert Street to Port Covington, which was designated an enterprise zone).

Still, the recent debate over taxpayer assistance for Harbor Point has renewed a healthy debate over how far Baltimore should go to support development in the more upscale neighborhoods. We believe the City Council has chosen correctly to move forward with the $107 in tax increment financing bonds to cover roads, parks and other infrastructure.

But that doesn't mean that developers should expect a similar offer every time they propose building in Baltimore. Whether it is a TIF or an enterprise zone designation, such offers must be handled judiciously and given only to those projects that are not only worthwhile but would not otherwise happen without government participation. Nor should this statewide program be only about urban renewal in Baltimore.

Take the Under Armour project, for instance. Last year, Baltimore agreed to a TIF that benefits one of the nation's fastest-growing sports apparel companies. Why? Because the expanding company didn't have to stay here, and because the $35 million in benefits don't come out of the pockets of the general public. Under the arrangement, the TIF bonds are financed by the company's higher property tax payments and go to such things as a recreation center, sidewalks and street improvements that benefit all who live around Tide Point.

Admittedly, a new job in the Inner Harbor or at Tide Point or in Canton won't necessarily go to someone struggling to support a family in East Baltimore. But we are inclined to believe, as Jay Brodie, who headed the Baltimore Development Corporation for 16 years recommends, that the city should use every incentive available to create jobs wherever possible.

Call it the "all of the above" approach to economic development in a city with double-digit unemployment. Whether it's enterprise zones, fighting crime, or Mayor Stephanie Rawlings-Blake's crusade to lower property taxes, such efforts help every city resident either directly or indirectly. Good jobs are good jobs, and the more the better.

That doesn't mean the city always makes the right call. The $301 million spent on tax-exempt bonds for the Baltimore Hilton aren't looking like such a wise choice these days, as the project struggles. The BDC needs to be more open, more transparent and perhaps more skeptical about such arrangements. But as federal support for urban areas has declined, it was only natural that Baltimore would tap what limited help is available, enterprise zones and all.

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