BDC proposes PILOT tax break for Liberty Street residential tower
Demand for housing is “virtually infinite” on the Westside, says a city official. But to build it – that takes tax credits and other subsidies.
Above: The facades of these two historic buildings on Park Ave. would be retained as part of the proposed Liberty Park tower.
The Baltimore Development Corp. recommended this morning a tax break for a proposed 14-story residential tower on a derelict stretch of the city’s struggling Westside adjacent to the “Superblock” project.
The non-profit corporation’s board, which provides the city with economic development help, closed its meeting to the public and media to discuss the mechanics of a payment in lieu of taxes, or PILOT, to developers Anthony Waddell and Christopher Harrison, trading under Liberty Park Redevelopment LP.
The amount of the tax break – said to be privileged information by BDC president M.J. “Jay” Brodie – will be forwarded with other information to Mayor Stephanie Rawlings-Blake for review. The mayor’s chief development advisor, Kaliope Parthemos, attended today’s meeting.
Superblock Tax Break
The PILOT proposal comes on the heels of another PILOT submitted by Rawlings-Blake to the City Council on Monday. This would give the developers of Superblock an estimated $35 million in property tax relief over 20 years.
Today’s proposal involves both a smaller piece of land and smaller development cost, roughly $20 million for a 92-unit apartment tower, according to Brodie.
Typically under a PILOT, a developer pays as little as 5% of the assessed value of the improved property for a period of 10 to 20 years. Brodie said the recommended Liberty Park PILOT would last 20 years.
“Virtually Infinite” Demand
Brodie said the PILOT was needed to make the economics of the proposal work and is part of the BDC’s and Rawlings-Blake’s goal of turning the Westside into an urban neighborhood – “and getting more population in Baltimore.”
He quoted Paul Graziano, city housing commissioner and member of the BDC board, as saying the residential demand for the Westside “is virtually infinite.”
He said that 95% of the lofts and residential units in the neighborhood are currently occupied.
However, to get the supply of housing equal to this demand requires various tax subsidies, according to Brodie and the mayor’s office.
Looking north at Fayette, the four properties on Liberty Street would be demolished. The yellow building would be retained. (Photo by Mark Reutter)
In addition to the proposed PILOT tax break, the developers are eligible for “EZ” (Enterprise Zone) tax credits. These credits would reduce property taxes by 50% for five years, then add 10% increases until terminating after 10 years.
Brodie said the developers are also seeking public assistance to purchase the five city-owned properties on the site (102, 104 and 106 North Liberty St. and 142 and 144 W. Fayette St.).
The appraised value of the properties are $830,000, Brodie said, and the developers propose a purchase money mortgage from the city to complete the sale.
Needs Historic Approval
The developers want to demolish four of these properties “because they have really impossibly small footprints,” said BDC economic development coordinator John Thompson.
The facade of 144 W. Fayette St. (at the corner of Park Ave.) would be retained, as well as an adjoining building on Park Ave. owned by Health Care for the Homeless.
The residential tower would include 20% affordable housing, and the developers are applying for federal and state tax credits available for low-income housing. The group is also seeking historic tax credits, Brodie said.
The project needs a stamp of approval by the Maryland Historical Trust, which has jurisdiction over the preservation of buildings on the Westside. The city-owned buildings are currently classified as “contributing” to the historic integrity of the area.
Two prior plans to redevelop this triangular-shaped block bounded by Liberty St., Fayette St., Park Ave., and Marion St. have failed.
The proposal by Liberty Park Redevelopment was the only response the city received to its 2011 RFP (Request for Proposals) to redevelop the site.