Despite its inaccuracies, I was pleased to read Mark Thistel's letter of March 18, "Baltimore can't afford Sagamore," because it provides an opportunity to correct a number of misconceptions about tax-increment financing, or TIF, and specifically the proposed TIF for public infrastructure in Port Covington.
Here are the answers to some important questions:
If you own a house or hold a job in Baltimore, how much of the tax that you pay will support a TIF?
Not one cent.
How much will your taxes increase to support the TIF?
Not one cent.
How much money sitting in the city's general fund today will go toward the TIF?
Not one cent.
How much money that could otherwise be spent today for schools, or in another neighborhood, will go toward the TIF?
Not one cent.
Is this a tax break or subsidy for Sagamore Development or Under Armour?
No — it is the opposite. Without new taxes paid by the owners within Port Covington, there will be no TIF. And taxes currently paid on the property will continue to flow to the city.
TIF dollars come from outside investors as a loan to the city to build public infrastructure, like sewer, water, streets and public parks. The funds are repaid by the new, increased property taxes from only within the re-development area, not from any other part of the city.
So when critics say that as taxpayers they did not expect to be presented with a bill for this project, I have good news. They have not and will not. The immediate net impact on a city taxpayer is zero. The long-term net impact for Baltimore is new jobs, massive private investment, and new tax revenues for the city.
Some have said that Under Armour, as a profitable corporation, should pay for its own headquarters. More good news — TIF funds will only be used for public infrastructure and will not be spent within the UA campus boundary or on any UA campus office building. This is worth repeating: Under Armour will pay in full to build its own internal infrastructure and headquarters.
An additional concern that has been raised is the city's creditworthiness to issue a large TIF bond, and some commentators have implied that the entire amount would come at once. This is not true. TIF bonds, in this case, will be issued over 25 years as infrastructure is phased in, and only as each phase becomes real.
The number $535 million seems extraordinary. However, this is a potentially extraordinary redevelopment, and more importantly that number only materializes over 25 years and only if it comes with $4.4 billion of new private investment, plus state and federal investments in Baltimore. And again, not one cent of the $535 million comes from the pocket of the Baltimore taxpayer.
A critical concern is the state education funding formula, and the potential loss of state funding for city schools based on a "phantom" increase in city wealth. This was a major concern for us, given our philanthropic focus on education. Fortunately, a bill has been introduced by Del. Maggie McIntosh and Sen. Nathaniel McFadden to fix this obviously flawed formula. The bill passed the Maryland House of Delegates 135-3 earlier this month, and it is expected to pass the Senate and become law this year.
Many expressing concern about Port Covington have acknowledged the vital importance of Under Armour in Baltimore. I am grateful for Mr. Thistel's comment that Under Armour is "the best thing to happen to Baltimore's corporate community in living memory." President Bill Clinton recently called the company "Baltimore's great shining jewel." The primary goal of Port Covington is to allow Under Armour's headquarters to continue to grow in Baltimore and not in some other city or state.
The larger redevelopment around Under Armour is being designed with public transit, good diverse jobs, environmental improvements, workforce development and neighborhood inclusion as top priorities. It cannot meet every unmet economic need of every family in Baltimore, but its impact will be considerable.
Under Armour is much more than an employer. The company and Kevin Plank personally have made extraordinary investments in Baltimore — millions of dollars for a recreation center (The Rec House) under construction in East Baltimore today, a new hotel, a distillery, new small businesses, sports fields, courts, computer labs, after-school programs, uniforms, scholarships and more. But, as Kevin often says, "we are just getting started." We have exciting and ambitious ideas ahead for the city.
We are proud to call Baltimore our home.
Tom Geddes, Baltimore
The writer is the CEO of Plank Industries and the executive director of The Cupid Foundation, Inc. He is a resident of Baltimore City.