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City pushes ahead with Paterakis’ Harbor Point

Board of Estimates expected to give developer full title to a last few bits of the parcel where he's doing his latest city-subsidized mega-project.

1 H&S Bakery trucks MG_8950

Trucks owned by John Paterakis’ H&S Bakery are parked at the Harbor Point site that would add 1 million square feet of new office space near downtown.

Photo by: Fern Shen

((UPDATE)) As expected, the board unanimously approved the Paterakis property transfers at its meeting this morning – along with other goodies for consultants and contractors that will be detailed in a Brew post later today.

The Board of Estimates is expected to approve several property transfers today that will expedite the start of Harbor Point, the mammoth waterfront project by John Paterakis Sr. that’s been the subject of political controversy owing to its $155 million in tax aid.

On the BOE’s routine agenda are three items that would give Paterakis’ development company full title to a few remaining bits of the 27-acre parcel that once housed the Allied Chemical chromium factory.

Included is city-owned land at 950 S. Caroline St., a portion of the filled-in City Dock canal and four non-improved city roads.

Only the land on Caroline St. is subject to payment by Paterakis. An agreement struck between the developer and the Baltimore Development Corp. (BDC) requires $87,000 at settlement, with an additional $348,000 due to the city over 11 years.

The BOE is expected to give Paterakis rights to Philpot, Wills, Block and Dock streets in return for new streets built on the site. “Based on the known environmental contamination of the [current] roads and the City’s future receipt of improved streets of a greater value and size, no financial consideration will be provided by the developer,” the BOE agenda points out.

Harbor Point lies west of Caroline St. and south of Lancaster St. between Harbor East and Fells Point. (Google maps)

Harbor Point lies west of Caroline St. and south of Lancaster St. between Harbor East and Fells Point. (Google maps)

Similarly, because of unclear ownership of the filled-in canal, the city will give the Paterakis group the southern portion of the land while retaining the northern portion.

The BOE, which includes Mayor Stephanie Rawlings-Blake and City Council President Bernard C. “Jack” Young, has been strongly supportive of Harbor Point. No discussion (or dissent) is expected among the five-member board.

Paterakis, the owner of H&S Bakery Corp., pleaded guilty in 2009 to violating campaign finance laws by providing a $6,000 payment to City Councilwoman Helen Holton, then chair of the Council’s taxation and finance committee that handled tax breaks for developers.

$155 Million in TIF Funding

What’s made Harbor Point controversial outside of City Hall is the $155 million in TIF (Tax Increment Financing) granted to the $800-million project.

TIF uses the increased property taxes generated by a project to finance the cost of bonds issued by the city to build infrastructure on the site. In so doing, the developer’s property taxes are used to pay off the bonds, rather than go into the city’s general fund. In essence, a TIF is a tax-free loan to the developer.

Harbor Point is the second largest TIF district designated by the city (slightly below the $160 million granted to the currently-stalled Westport project of developer Pat Turner) and fully double the $78 million in TIF bonds awarded to East Baltimore Development Inc.

Without tax increment financing, the project would not go forward, argues M.J. “Jay” Brodie, president of the BDC, because no developer – including Paterakis – would pay for the infrastructure costs needed for the site.

Members of BUILD (Baltimoreans United in Leadership Development) walk past the Harbor Point site on Nov. 13 protesting tax breaks to Paterakis. (Photo by Fern Shen)

Members of BUILD (Baltimoreans United in Leadership Development) walk past the Harbor Point site on Nov. 13 protesting tax breaks to Paterakis. (Photo by Fern Shen)

In building Harbor East north of this site, the Paterakis group was granted another tax break called PILOTS (Payments in Lieu of Taxes) for four major projects, including the Marriott Waterfront Hotel and Legg Mason Tower.

Thanks to the PILOT granted to the Marriott, Paterakis will be excused from paying $64.5 million in city property taxes over 25 years, according to material from a task force that released its findings to City Councilman Carl Stokes.

Public Protests – and Quiet Concern by Businessmen

More than 500 people marched through Harbor East on Nov. 13 to protest these tax breaks to Paterakis, seeking to dramatize the disparity between his glitzy office towers and hotels and the dilapidated state of city schools and the threatened closure of youth recreation centers.

Another group associated with Occupy Baltimore, called “Another BDC is Possible,” staged a protest in front of the BDC’s office earlier this month. It won a pledge by Brodie to meet with a delegation of protesters about the agency’s alleged lack of transparency and accountability.

The Harbor Point project has also been a source of concern for real estate interests led by lawyer and Baltimore Orioles owner Peter G. Angelos, who cringe at the probable impact of the sprawling development on downtown’s depressed market for office space.

Paterakis plans to build 1,019,010 square feet of new office space at Harbor Point.

Already, his Harbor East buildings have siphoned off major businesses from the Inner Harbor, notably Legg Mason.

In addition to office towers, the developer wants to build 73,000 square feet of retail, 270 condominium units, 346 rental apartments, a 260-room hotel and parking structures for 3,000 vehicles.

That promises to make Harbor Point a self-contained “mini-city” on Baltimore’s waterfront.

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  • http://profiles.google.com/jamiehunt344 James Hunt

    “More than 500 people marched through Harbor East on Nov. 13 to protest these tax breaks to Paterakis, seeking to dramatize the disparity between his glitzy office towers and hotels and the dilapidated state of city schools and the threatened closure of youth recreation centers.”

    +++++++++++++++++++++++

    So, if he wasn’t able to use the taxes owed on the new buildings to pay for the roads, sidewalks and parks on the site , he wouldn’t build. The city would continue to receive whatever it takes in on the parking lots on the site, and no more. No income taxes from future residents of harbor point, no hotel taxes from tourists, no parking taxes from the new garages.

    How would that improve “dilapidated city schools” and prevent the “closure of youth recreation centers”?

    Wonder of any of the “500″ have ever tried to build a successful residential/retail/commercial development on a toxic waste site?

  • http://profiles.google.com/jamiehunt344 James Hunt

    “Already, his Harbor East buildings have siphoned off major businesses from the Inner Harbor, notably Legg Mason.
    In addition to office towers, the developer wants to build 73,000 square feet of retail, 270 condominium units, 346 rental apartments, a 260-room hotel and parking structures for 3,000 vehicles.
    That promises to make Harbor Point a self-contained “mini-city” on Baltimore’s waterfront.”

    ++++++++++++++++++++++++++++++++

    Two more things, then I’ll leave off and wish y’all a Happy Thanksgiving.

    1. Legg wasn’t “siphoned” off from the Inner Harbor. The old USF&G building didn’t suit their needs. It was seriously out of date. That’s why it received a multi-million dollar reno after Legg left. And now, TransAmerica is in the building.

    2. Harbor Point won’t be “self contained.” This makes it sound like the Renaissance Center in Detroit. Look at any rendering of the Harbor Point site and it’s obvious that it will be integrated into the fabric of the city. The waterfront promenade is extended along its edge, the 11 acre park will be open to all, anyone can use the streets, parking garages, etc.

    • Tim Pula

      Good point about Legg Mason.  It’s also important to note that Legg was looking at options outside of the City.  That would have been a devastating loss.  Few seem to understand that businesses like Legg pay a lot in property taxes but don’t use may City services.  The services they use might be the occassional call to 911 for police, fire or EMS.  Outside of that they don’t use many services but pay a lot in taxes.

      Legg and other business could easly relocate and pay less taxes, thus improving their bottom lines.  They should be congratulated for staying and all of the developers behind Harbor East should be applauded for creating  a place that allows them to continue calling Baltimore home.

  • Gerald Neily

    I  agree with James that because of its infrastructure needs, Harbor Point is actually a legitimate place to use Tax Increment Financing. But it is a self-contained site. After all, it’s a peninsula. It will thus not be integrated into the fabric of the city, which is what makes it attractive as part of the new 21st century anti-downtown, just as Locust Point is to UnderArmour and Harbor East is to Legg Mason (to a somewhat lesser extent). And $100 million or so has already been spent on Harbor Point to ensure that being a former toxic waste site is not an issue. 

  • Ktrueheart

    BDC deals which put tax payers on the hook for bond repayments must be more transparent.  We are only now learning of former Mayor O’Malleys’ municipal investments in credit default swaps, which are currently worth pennies and can’t be sold to a blind man.  As stock holders in this bureaucracy the City needs to give us a full accounting of our assets and liabilities, including proposed ones.  Lacking complete transparency, we are entitled to be skeptical of any deal engaged with a MAJOR campaign donor!  Seems somebody has set the stage today to throw out a deniability claim on her BOE vote in the future … Hummm

    • Tim Pula

      The taxpayers of Baltimore are not on the hook for TIF bonds.  Only the taxpayers withing the actual TIF district (the development) and the developer are on the hook for repaying the TIF bonds.  TIF Bonds can only be used to building public infrastructure.

      Public infrastructure is one of the foundational responsibilities of local and state governments.  In the past, such investments were funded with bonds that were repaid from the general fund and thus all taxpayers were on the hook for repayment.  TIF’s limit the repayment to only those taxpayers directly receiving day to day benefit.

      • Ktrueheart

        The City’s current AA Bond rating guarantees each bond and the creditors don’t care which TIF district got the benefit … they expect the City to pay-up!  Deferred taxes on development projects does make tax-payers responsible for current year repayments … debt service payments don’t fall from heaven.  Yes, revenues are generated by businesses moving into some of these development projects … I’m just saying I want to see the books!

        • Tim Pula

          TIF Bonds are not general obligation bonds.  They are not secured by the full faith and credit of the City.  Would a default of a TIF bond hurt the city, yes, but not nearly in the same way that a default on a general obligation bond would hurt.  Default on a GO bond would require the city to raise taxes to pay off the bond.  TIF bond buyers understand that they are buying a revenue bond which is backed by the tax increment created in the TIF district, the ability to levy a special tax only in the district if tax incement is not enough to pay the debt service, and lastly by a guarantee from the developer.  If those three things fail, the bond buyer takes a loss.  That their known risk that they are willing to take.

          Not sure what you mean by deferred taxes.  Tax payers in a TIF district to not have deferred taxes.  They pay taxes through the development period with the new buildings or renovated buildings being re-assessed as they are completed.

          • Anonymous

            From B Brew: In fact, TIF Bonds are considered tax-supported debt by Moody’s and other rating agencies. Accordingly, TIF debt is included in the calculation of Baltimore’s general credit debt profile. Too much TIF debt can lower a city’s credit rating. So far, Baltimore has not reached this level – but it could. This comes from no less a source than Steve Kraus of the Finance Department.

          • Tim Pula

            This is correct.  
            Everyone who is critical of TIF’s should remember that virtually all the roads they drive on, the pipes through which their water and sanitary waste are moved, the conduits that carry their electricity, were built by local government, mostly using general obligation bonds and direct funds from the general fund.

            For Baltimore to re-populate and to transition from an manufacturing economy, it must have new infrastructure built and old infrastructure renovated and local and state government must provide that roll.  TIFs are a very efficient way to do that.

    • Tim Pula

      More transparency would be good, but not just for BDC and TIF’s.  Let’s see the cost of every function of City government, down to putting the acutall invoices on line.  Let’s have every agency audited at least annually but an outside top 6 auditing firm – not by the comptroller, and not by some small mom and pop accountant.  Let’s see every single budget line of the City – in painful detailed – compared side by side with the same budget lines for the counties that make up metropolitan Baltimore. 

      BDC is not the cause of Baltimore’s problems.  It may have its worts and could do things better but it didn’t put the City in the bind its in.  Rather, politicians who think Government should solve every single social ill that exists, while largely ignoring the core responsibilities of government, and that taxpayers would be willing to foot the bill to the tune of twice the next highest tax rate, are the problem.

      As long as businesses and families can more to Baltimore County and cut their tax rate in 1/2 yet get: generally better schools, clearly better recreational opportunities, better streets and infrastructure, and much lower crime, Baltimore will be behind the 8 ball (its an even better deal in terms of service provided to costs paid if you look at Howard County).

  • Tim Pula

    Everyone needs to understand that TIF’s are not tax breaks.  They do not relieve the taxpayer of any tax liability.  Rather, the majority of the taxes paid under a TIF are used to pay off bonds that were sold to fund infrastructure.  The rest of the taxes are paid directly to the City’s general fund.

  • Tim Pula

    I would like the author to tell us what business in Harbor East were “siphoned off” from downtown.  As already stated, Legg was in need of new space as it’s downtown building no longer worked for it.  I can think of a number of businesses that are at Harbor East that weren’t in the City before Harbor East – Laureate and its predecessor Sylvan, the MAC, Whole Foods, Landmark Theatres, Arhause Furniture, Pazo, the Johns Hopkins School of Business  (much larger than previous location and yes, pays property taxes through its rent), Morgan Stanley (which relocated a large contingent to Baltimore after 9/11), not to mention some 500 residential units, many housing people that had not lived in B’more prior to Harbor East.

    I can guarantee that Harbor East pays many orders of magnitude more in property taxes – even accounting for the PILOT’s for some buildings – than it did when it was a vacant industrial wasteland 25 years ago.  There is no doubt it is a huge positive benefit for Baltimore and produces far more in tax revenue for Baltimore City than it comes close to using in services from Baltimore City.

    • Anonymous

      From B. Brew – In addition to Legg Mason, we’ve see Hogan & Hartson, Oppenheimer & Co., and the Johns Hopkins Carey Business School leave their downtown offices for Harbor East. Then there was Whitman, Requardt that abandoned its Charles Village HQ (since 1915) for Harbor East. Here is a 2009 Sun story about the “migration” of local businesses to Paterakisville: http://articles.baltimoresun.com/2009-11-18/business/bal-bz.legg18nov18_1_legg-mason-tower-harbor-east-business-school.

      • Tim Pula

        We’ve also seen over the last 30 years hundreds of companies leave Baltimore all together.  Companies needs change over time.  Hopefully they grow and need more space. I’d much rather that they stay in Baltimore than leave for the suburbs as so many have.  That Harbor East has created a place that has helped retain companies that are net contributors to the City’s tax base is a huge plus.

        The disconcerting story that should be told is of the hundreds of companies that have left for other local jurisdictions where their tax burden is more reasonable, they can more easily see that those taxes are used efficiently, and where they are not constantly badgered by new regulations passed by a City Council which has historically not understood or respected businesses, but contstantly wants a chunk of their money anyway.

      • Tim Pula

        Minor point of clarification.  While Whitman Requardt left Charles Village for the Harbor East area, it is not part of the Paterakis development known as Harbor East.  WRA built their own building on Caroline Street, not within the footprint of Harbor East.  It’s also worth pointing out that WRA’s move was at least partially due to the brutal murder of one of their associates (and a father of young children) while leaving work.  They were clearly and rightfully concerned about their ability to attract new talent to their firm b/c of the perception that their neighborhood was unsafe.

        • Anonymous

          From B Brew: To be fair to Charles Village, there was a 9 year gap (Dec. 1990 – Jan. 2000) between the time Whitman engineer David Gordon was shot to death in CV and the company’s announcement it would move to a new HQ, which is across the street from the Harbor Point development discussed in this story.

          • Tim Pula

            May be.  But it doesn’t change the fact that they felt they needed a new facility to house their expanding firm.  That was the primary reason for their departure from Charles Village.

  • Gerald Neily

    Overview: Harbor East was originally planned as an urban neighborhood to support downtown, similarly to Federal Hill, Fells Point, Charles Village, etc., but with its unique set of amenities. The infrastructure to do this was actually built, but later had to be largely torn out to build Paterakisville instead. The relationship between Harbor East and Downtown has thus turned on its head. Harbor East became the “new downtown” to attract the most ambitiously upward-mobile businesses, while the city is now searching for a new “game changing” identity for the old downtown via the Grand Prix, Disney World style attractions, a mega-convention arena, residential adaptation of some historic commercial buildings and tearing down others for more parking garages, prospective big box stores, etc. I’m sure Transamerica would have aspired to Harbor East as well if they felt they could. On this thanksgiving weekend, we should be thankful that there was still somebody around to occupy Baltimore’s tallest building.

  • http://profiles.google.com/jamiehunt344 James Hunt

    Gerald Neily wrote:

    “Overview: Harbor East was originally planned as an urban neighborhood to support downtown, similarly to Federal Hill, Fells Point, Charles Village, etc., but with its unique set of amenities. The infrastructure to do this was actually built, but later had to be largely torn out to build Paterakisville instead. The relationship between Harbor East and Downtown has thus turned on its head. …”

    +++++++++++++++++++++++++++++++

    True.

    Let’s face it, though: whatever their original merits, the Charles Center and Pratt Street redevelopment in the 60s and 70s sucked a lot of the life out of the streets of downtown.

    Now downtown is slowly reinventing itself along the lines of Harbor East and Harbor Point: increasing the residential opportunities, trying to get more retail along the streets, improving the public spaces.

    Eventually, we’ll have something akin to NYC has: Lower Manhattan/Wall Street (downtown) and Midtown (HE/HP). Except that, if Pier Six were developed to its potential, downtown and HE/HP would effectively be one district.

    I’ll never understand the gnashing of teeth about HE/HP. As others have observed, if those areas weren’t an option a lot of the businesses would have gone to the ‘burbs.

    • Gerald Neily

      Sorry, I wish you were right, but I just don’t see it. Yes, the city is trying to get more downtown retail, but where is it? They’re treading water at best on Harborplace, which isn’t even street-oriented. The effort for more downtown residential would be much stronger with a reasonable attempt to make the streets more neighborly, but instead they accommodate 180 mph Grand Prix racers. Yes, Pier 5/6 would need to be the linkage, but it would need to be far stronger than just the new kid’s park. A surface Red Line would be a perfect way to do that, designed like a streetcar line as a unifying motif. But instead, the city wants to spend gazillions more on an underground Red Line with only escalator portals tucked away on Lombard Street and Fleet Street/Central Avenue, which is kind of like using a nuclear bomb for crowd control.

      • http://profiles.google.com/jamiehunt344 James Hunt

        Yowza, Gerry! You pack a lot into a short post! At any rate, as in the ‘burbs (and Harbor East/Harbor Point) “retail follows rooftops.” Conversion of Class B and C office space downtown into apartments is laying the foundation for a more retail. It’s moving slowly because the economy generally is in the dumps and getting financing takes a long time. As for the Red Line, it’s a ridiculous clusterfarg of an idea that will die, but only after Gov. O’Malley provides many more millions to consultants and engineers to get them through this economic slump. Of course, that’s grist for another forum.

    • Marc

      I definitely agree that more downtown residential units would boost the
      demand for retail, but perhaps another reason retail is struggling is
      because people are “overshooting” with unrealistic ventures.

      What I mean by “overshooting with unrealistic ventures” is that people
      are focusing on flashy high-end stuff at the expense of more humble retail that won’t attract as much attention (but could still make a
      decent amount of money). So, for example, a lot of high-end restaurants,
      luxury boutiques, and tourist outlets flood the downtown at the expense
      of more modest pharmacies, grocery stores, and dry cleaners. I’ve got
      nothing against high-end retail, but a “sustainable” downtown isn’t
      really possible if many downtown residents have to travel outside
      downtown (or outside the city) for their ordinary needs.

      I think the architects/planners at DPZ phrased the “overshooting retail” situation better:

      “…A lack of management has proven to be the enemy of diversity. It is
      why Key West has become an emporium of t-shirt shops, and why the only
      lunch available for under $10 consists of potato chips and a soda. When
      left alone, retailers tend to repeat easy successes and entire sectors
      become homogenous. Variety is achieved not through natural selection but
      through careful programming.”

      That old B+W photo of the palatial interior of Read’s in another article here got
      me thinking about just how many useful stores there must have been in
      downtown B’more at one time (when its residential population was
      arguably smaller, though many more shoppers were coming in from the
      surrounding neighborhoods). Today you can have a really nice restaurant
      meal downtown, but can you buy toilet paper? You can buy an “I got crabs
      in B’more” t-shirt downtown but can you get your camera fixed? For a
      too-short time there was a passable supermarket downtown, but even
      that’s been replaced with a higher-end specialty grocer.

      There still are a handful of straggling shoe shops, florists,
      laundromats, stationers and office supply shops, Chinese take-outs,
      carpet cleaners, copy shops, and electronics/PC repair shops, but they
      seem to get rarer and rarer every year. Lexington St., for example, used
      to be full of useful everyday retail, but it’s now a shell of its
      former self.

      Even the public markets (Cross St., Broadway, Lexington, etc.) seem to
      focus less and less on the produce, seafood, and meat and more and more
      on prepackaged concessions. Where are the bakeries? Where are the delis?
      Where are the hardware stores and appliance shops? Where are the cheap
      eateries? The department stores? Sure, there are one or two of those
      kinds of shops downtown (or in surrounding neighborhoods), but they’re still too sparse to serve a growing
      downtown population.

      In other cities – Center City Philly, Manhattan, Brooklyn, scores of
      European cities, hell, even Boston – they manage to retain and expand
      all those things alongside the high-end stuff.
      But in B’more the high-end retail (and offices) simply seems to push out
      the everyday stuff. That, IMO, is why the downtown is struggling and
      will continue to do so until it “normalizes.” Downtown B’more needs more
      Woman’s Industrial Exchanges and fewer ‘Ripley’s Believe it or Nots!’

      • Francis O’Brian

        …..and people seem to wonder why eastern ave and other places that should be major thoroughfares are underdeveloped: if places for tourists and out of towners like harbor east are sucking up all of the oxygen for retail what do you expect to happen?

        • Tim Pula

          The problem with Eastern Avenue and other existing streets being developed for retail is that it is difficult to get a critical mass of space to develop and market together.  You have many smaller lots, owned by a variety of different owners, that are harder to assemble into a coherent retail approach that is wanted by many retailers.  Because of this these streets would work better for mom and pop, local and regionla retailers.  They still will struggle with the lack of a coherent vision – both from the development and marketing perspective that you can get when you do a new ground up project of the size of Harbor East.

    • Marc

      I definitely agree that more downtown residential units would boost the
      demand for retail, but perhaps another reason retail is struggling is
      because people are “overshooting” with unrealistic ventures.

      What I mean by “overshooting with unrealistic ventures” is that people
      are focusing on flashy high-end stuff at the expense of more humble retail that won’t attract as much attention (but could still make a
      decent amount of money). So, for example, a lot of high-end restaurants,
      luxury boutiques, and tourist outlets flood the downtown at the expense
      of more modest pharmacies, grocery stores, and dry cleaners. I’ve got
      nothing against high-end retail, but a “sustainable” downtown isn’t
      really possible if many downtown residents have to travel outside
      downtown (or outside the city) for their ordinary needs.

      I think the architects/planners at DPZ phrased the “overshooting retail” situation better:

      “…A lack of management has proven to be the enemy of diversity. It is
      why Key West has become an emporium of t-shirt shops, and why the only
      lunch available for under $10 consists of potato chips and a soda. When
      left alone, retailers tend to repeat easy successes and entire sectors
      become homogenous. Variety is achieved not through natural selection but
      through careful programming.”

      That old B+W photo of the palatial interior of Read’s in another article here got
      me thinking about just how many useful stores there must have been in
      downtown B’more at one time (when its residential population was
      arguably smaller, though many more shoppers were coming in from the
      surrounding neighborhoods). Today you can have a really nice restaurant
      meal downtown, but can you buy toilet paper? You can buy an “I got crabs
      in B’more” t-shirt downtown but can you get your camera fixed? For a
      too-short time there was a passable supermarket downtown, but even
      that’s been replaced with a higher-end specialty grocer.

      There still are a handful of straggling shoe shops, florists,
      laundromats, stationers and office supply shops, Chinese take-outs,
      carpet cleaners, copy shops, and electronics/PC repair shops, but they
      seem to get rarer and rarer every year. Lexington St., for example, used
      to be full of useful everyday retail, but it’s now a shell of its
      former self.

      Even the public markets (Cross St., Broadway, Lexington, etc.) seem to
      focus less and less on the produce, seafood, and meat and more and more
      on prepackaged concessions. Where are the bakeries? Where are the delis?
      Where are the hardware stores and appliance shops? Where are the cheap
      eateries? The department stores? Sure, there are one or two of those
      kinds of shops downtown (or in surrounding neighborhoods), but they’re still too sparse to serve a growing
      downtown population.

      In other cities – Center City Philly, Manhattan, Brooklyn, scores of
      European cities, hell, even Boston – they manage to retain and expand
      all those things alongside the high-end stuff.
      But in B’more the high-end retail (and offices) simply seems to push out
      the everyday stuff. That, IMO, is why the downtown is struggling and
      will continue to do so until it “normalizes.” Downtown B’more needs more
      Woman’s Industrial Exchanges and fewer ‘Ripley’s Believe it or Nots!’

  • Curtis

    I’ve come to the opinion that Harbor East and Harbor Point, with all of its energy and quality brand positioning, will one day be viewed as the saviors of downtown.  They are geographically limited places, so when they’re all built-out, commercial office tenants and developers can either tear down Fells Point and Little Italy (fugetaboutit), or turn their attention to downtown.  When that happens, get ready for TIF’s to help pave the way.   

    The above statment needs an asterisk next to it, with the assumption that the city will lower its taxes and be more competitive with the suburbs.  Downtown revibrance will be all the more probable if there are more alternate forms of transportation to the car – density has its optimal limits by the sheer limitations of roadway capacity and the cost to build a covered parking space.

  • Tim Pula

    TIF’s are not tax breaks.  PILOT’s are.  Given that’s Baltimore’s taxes are the highest in the metro area and some of the highest amoung competing cities, tax breaks will be needed to make Baltimore competitive.  The best would be an overall break/reduction across the City.  But until that happens, targeted breaks will be needed or else we can kiss all business good bye.

  • Tim Pula

    Couple points:
    1.  The way the fire department has been treated in my opinion is in-excusable.  However, it is not the fault of the development community, most of which has been working very hard to bring people back to Baltimore and to boost the City’s tax base.  The City cannot solve (pay for) every social ill that exists (while the counties do little on this front), employ a workforce that it twice as large at that of Baltimore county on a per capita basis, and offer retirement benefits that essentially means the City is carrying 3 people for every 1 FTE position – the current employee, and the 2 previous that are retired.

    2.  Legg Mason was not in the WTC.  The were at Pratt and Light.  Their leased space was no longer adequate for what they needed to do.  They needed larger contiguous floor plates and new data technologies that allowed them to stay competitive with other companies in their industry. There are no vacant or partially vacant buildings in Baltimore that could have met their specifications.  Thus, they  were in the market to move and the PILOT received by the building in Harbor East made that building and staying in Baltimore cost competitive with Baltimore County and Howard County.  Loosing another major employer would have been a horrendous blow to B’more.

    3.  City taxpayers do not pay for empty condos.

    4.  The Hilton Hotel was needed to support the convention center functions.  Every major convention center has a hotel connected to it with supportive functions.  Having this helps the convention center attract and win conventions that it has not been able to win previously.  The Hilton is actually doing well on a cash basis.  It is paying all of its operating bills and all of its debt service from its own revenue from opearations.  IT WAS NOT FUNDED WITH GENERAL TAX PAYER TAXES – ANOTHER WORDS, YOU AND I ARE NOT PAYING FOR THIS.  It was funded with Revenue Bonds which are repaid from:  1.  Hotel revenues; 2.  Hotel taxes on this hotel.  If the hotel struggled (and its not) and wasn’t producing enough of 1 and 2, then hotel taxes collected from other hotels would fill in the difference.  Only if things were really bad would the costs be backed by the general fund taxpayer.  Right now, in the worst economy we have seen in 80 years, the Hilton is meeting all of its obligations – and attracting new conventions – by #1 and #2 above. 

    5.  Habor Point:  Building at Habor Point will be built on a pile foundation.  Piles will be driven down through the cap and the cap sealed back around the pile.

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