Baltimore’s spending board approved $39.3 million more in tax increment finance bonds Wednesday for the city’s Harbor Point development, the final piece of public financing for the high profile waterfront project.
In 2013, the city approved $125 million worth of public financing for Harbor Point in what’s known as tax increment financing or TIF bonds. TIF bonds are designed to help ambitious developments get off the ground, typically by covering the costs of infrastructure improvements. Additional property taxes generated under a TIF go toward paying off the debt — instead of city coffers.
Until now, Harbor Point has used about $86 million of that bond financing, according to bond disclosure documents.
The five-member Board of Estimates unanimously approved the latest round of financing without discussion Wednesday. A memorandum of understanding with Harbor Point Open Space Corp. and the Waterfront Management Authority of Baltimore City also was approved to govern maintenance of parks and open space in the waterfront development.
The 27-acre Harbor Point, developed by Beatty Development Group on the remediated site of a former chromium plant, also has received tens of millions of dollars in public subsidy through enterprise zone tax credits, a property tax break meant to spur investment in disadvantaged communities. The area surrounding Harbor Point was too wealthy for it to meet the qualifications for an enterprise zone, but city and state officials made a controversial decision in 2012 to include the area anyway through a technicality.
According to estimates from 2012, the enterprise zone tax credits for Harbor Point were expected to cost city and state taxpayers $88 million in forgone tax revenue. The Baltimore Sun was able to identify nearly $32 million worth of enterprise tax credits claimed so far by the Harbor Point development, according to disclosures made in public documents, but that number will climb in the coming years.
City officials redrew Baltimore’s enterprise zone map this year, and the state approved the changes earlier this month. The new map leaves out Harbor Point, but developments that began before the change still will be eligible to claim the tax credit for several years.
The enterprise zone tax credit is a 10-year program that phases out over time. In the past few months, there were groundbreakings at Harbor Point for two major phases just before the new map took place, including a new 550,000-square-foot headquarters for T. Rowe Price.