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Clergymen seek $25 million from Harbor Point developer for “community benefits”

BREW EXCLUSIVE: Draft document asks for free Internet service for Perkins Homes residents. Political insiders would also get a piece of the action.

hathaway, yeary and mckinney with stokes

Revs. Alvin Hathaway, Todd Yeary and Darron McKinney flank Councilman Carl Stokes in June when they announced their effort to win community benefits from developer Michael Beatty.

Photo by: Mark Reutter

A group of Baltimore clergy – backed by prominent city power players – want $25 million from Michael Beatty as the price for their support of the Harbor Point development, The Brew can exclusively report.

The Brew has obtained a 12-page draft agreement of a “community benefits agreement” drawn up by the Community Churches for Community Development, a group co-founded by Rev. S. Todd Yeary, Mayor Stephanie Rawlings-Blake’s pastor, and Rev. Alvin C. Hathaway.

Now circulating at the highest levels of City Hall, the document calls on a range of payments and services from the Beatty organization, including Internet wireless service and fresh produce for Perkins Homes residents.

The document is the outgrowth of efforts by Councilman Carl Stokes to bring benefits to the poor black community north of Harbor Point, which Stokes said Beatty took advantage of to secure a state “EZ” (Enterprise Zone) tax credit worth $88 million.

Equity Stakes in Harbor Point

The document – which has not been signed by Beatty – asks the developer to pay $25 million into a Community Investment Trust to promote “community empowerment, sustainability, employment and entrepreneurship” at Perkins Homes and adjoining areas of the EZ zone.

In addition, the document calls on the developer to provide three years of free Internet wireless service for Perkins Homes residents, a “fresh produce food delivery system” to enhance the health of the community, and a “dedicated transport system” to connect residents “to economic opportunity and to the amenities of a quality life.”

The clergymen also want Beatty to offer “equity shares” in his development company to “qualified minority, African-American or such other investors whose economic interests, as determined by the Board of Trustees of the Community Investment Trust, are so aligned with the disadvantaged residents [of Perkins Homes] as to promote their economic development.”

Beatty Under Pressure

Beatty has met privately with Hathaway and Yeary, but has resisted any form of community payments. Given the project’s strong backing by Mayor Rawlings-Blake, he was believed to be immune to the clergy’s importunings.

But the political dynamic is beginning to change.

Pressed to get groundbreaking settled for the proposed Exelon Tower at the site, Beatty is dependent on City Council approval of another tax break for Harbor Point – $107 million in city tax increment (TIF) bonds.

Last month, a City Council committee headed by Stokes stalled a vote on the TIF tax break and has scheduled a “working session” this Wednesday on the legislation.

Councilman Stokes confers with Michael Beatty before the start of a hearing on the $107 million Harbor Point TIF last month. (Photo by Mark Reutter)

Councilman Stokes confers with Michael Beatty before the start of a hearing on the $107 million Harbor Point TIF last month. (Photo by Mark Reutter)

Beatty is counting on getting the bill past the Stokes committee on Wednesday, so the TIF legislation can win approval before the full Council next Monday.

Not Opposed if “We Are Part of It”

For the last two months, Stokes and Beatty have been playing an increasingly high-stakes game over the use of public funds to finance Harbor Point.

Stokes signaled his desires by saying recently that reports by the Baltimore Development Corporation that he was “against” the $1 billion project were incorrect.

He said that he “very much” supported the Harbor Point project “as long as we – we – are part of it.”

A Cast of Political Insiders

The “we” has become apparent through the signatories of the proposed agreement with Beatty, which would all play roles in the dispersal of the $25 million Community Investment Trust.

They include a “who’s who” of behind-the-scenes players in the city:

• Associated Black Charities, whose CEO, Diane Bell McKoy, is a close ally of Mayor Rawlings-Blake and former staffer for ex-Mayor Kurt Schmoke.

ABC would administer the distribution of the $25 million fund within census tracts 203, 201 and 302, and would earn a fee “based upon industry standards. . . including, but not limited to fiscal oversight per federal and state regulations and, when necessary, program/expenditure accountability based upon the decisions of the governance body,” according to the draft agreement.

• East Baltimore Community Corp., whose president, Marie J. Washington, is a longtime associate of City Council President Bernard C. “Jack” Young, would apparently receive funds from the trust for its various outreach and planning efforts in East Baltimore.

• Harbor Bank of Maryland, a minority-owned bank with cross-ties to many local politicians and to H&S Bakery owner, John Paterakis, who has served as a bank director since its founding in 1982.

Paterakis financed the Harbor East project with Beatty serving as his right-hand man. While Beatty says Paterakis is not now involved in Harbor Point – having sold his interests to Beatty – the bakery mogul has interests in several parcels on the site as well as the Thames Street Wharf office building that houses Morgan Stanley.

Harbor Bank would hold the deposits made by Beatty for the Community Investment Trust.

• Community Churches for Commercial Development, a group co-founded in 2011 by Rev. Yeary of Douglas Memorial Community Church, Rev. Hathaway of Union Baptist Church and Dr. Arnold Howard of Enon Baptist Church.

The group would select three of the eight members of the board of trustees of the community fund. The group pledges to support the appointment of no fewer than four board members from Perkins Home and the surrounding community.

• The Presidents’ RoundTable, a coalition of minority business owners, would help oversee minority opportunity at Harbor Point. Arnold Williams, chairman of the Baltimore Development Corporation (BDC) that unanimously approved the $107 million TIF to Beatty, is a prominent member of the RoundTable.

• Sojourner-Douglass College would be granted three seats on the eight-member board and would supervise “Change4Real Community Corporation.”

This group – associated with Devon Wilford Said, an author, poet and founder of Hallelujah Praise Ministries – would be the official “community organizing vehicle” of the trust fund.

To get Change4Real up and running, the draft benefits agreement calls on Beatty to make a payment of $300,000 to the group no later than 45 days after the start of construction at Harbor Point.

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  • RickinBmore

    Well, this is starting to get more and more ridiculous. The issue is simple – why should the city taxpayer subsidize Mr. Beatty to the tune of a 14 percent profit when its clear that he and his backers can clear a 9 to 10 percent profit without a dime of tax breaks? What I see with this community compact is just another form of graft. Why should the Perkins Homes folks get something when ALL Baltimoreans are going to lose out when these tax dollars are flushed down the toilet by the overgenerous TIF? And why are a bunch of pastors who don’t pay a dime in property tax complaining? In this city the nonprofit churches are some of the biggest slumlords around. Most of these pastors are no different than Beatty. Carl Stokes lost me when he brought Perkins Homes into this debate. He had a perfectly clear argument at one point – the city shouldn’t subsidize high end developments that are going to make money regardless. Anyone could understand that. But it all got too complicated. No wonder he’ll never be Mayor – he’s all over the place.

    • Baltimore resident

      You’re absolutely right that the TIF affects the entire City, so Perkins isn’t due anything just because its close proximity to Harbor Point. I wonder if other poor neighborhoods close to the other areas of the city in enterprise zones also feel entitled to a kick back? Perkins seems to be the only area looking for a handout. It sounds like the clergy is extorting Beatty and looking for an exchange of votes for money. Stokes talks about how Harbor Point TIF is a sweetheart deal with Beatty and then he turns around and is requesting a piece of the coin for him and his friends, this guy is crazy. I understand that it would be better for Baltimore if Beatty didn’t need the TIF, but I’d rather have Harbor Point than nothing at all. Even if we forgo additional tax revenue for 10 years, at least we will get jobs during that period and the general fund will be flush with tax revenue afterwards. We would also be left with a great urban area that we wouldn’t have otherwise. I hope that Stoke’s hi-jinx don’t derail the project. No one is going to want to invest in Baltimore with all of the hoops we are making them jump through. Free internet, what a joke.

      • Steve

        The Exelon jobs are already in the community, and would just move to a new building. I realize that this site has some major development challenges, but do we really need to solve them now?

        This proposal just adds to the cost of an already dubious return. It is tough to read anything like this and not think of Detroit and its heavy investments in its stadiums, Renaissance center, and monorail system.

        • http://www.BaltimoreSpectator.com/ A F James MacArthur

          Indeed, we’re living in the early stages of the Detroitization of Baltimore City. We’re headed right where they are. Watch and see.

        • Mack

          That may be accurate but you’re ignoring the 1000 jobs that will go into the construction and maintenance of the building. Engineering/Construction/Consulting etc.

          They want to stay here, hence the headquarters. “Detroitization” didn’t occur because company’s wanted to stay in Detroit. They had no reason to. Their tax revenue dropped dramatically because everyone left; businesses and citizens.

      • http://housingpolicywatch.com/ Carol Ott

        We have to stop with the “something is better than nothing” mentality, and we also need to stop the corporate welfare. These are YOUR hard-earned tax dollars being gambled on a project that may or may not get past the first phase.

        If the market could support such a development, it would be built without using the backs of hard-working taxpayers to do it.

    • Gerald Neily

      Great post, Rick. I would only add that if this project really needs a 14 percent rate of return, it’s very hard to believe that building the extra $80M worth of parks upfront with the tax money is the only way to achieve that.

    • davethesuave

      with respect, RickinBmore,

      Strokes, er, Stokes is right where he needs to be. Hallelujah indeed.

      Praise the Lord and Pass the Gold,
      Our church-ly souls have now been sold,
      The Golden Rule, is in full view,
      (at least at the Brew),
      and once in a while, the truth is told.

      No one should wonder whether this city is doomed. The evidence is hidden in plain sight. I’d be disgusted if I hadn’t seen this coming. The church types are the worst, been that way for centuries. Organized religion leads to organized crime, every time. “Separation of church and state”, my ass.

  • Mike Weston

    This is exactly why people don’t want to do business in the City. This is the height of ridiculous. Why should the developer give these people $25 million to distribute as they see fit? This only enhances their power and shows their greed rather than does actual good for the community. Their motives are certainly suspect.
    A healthy debate as to the appropriateness of the TIF is great. Demanding cash payments to do business is extortion.

  • http://decomplecting.org/ Jason Lewis

    I still amazes me how much political clout is wielded by a group of clergy – what _The Wire_ referred to as “the Black ministers” – wields in local politics. It’s the sort of clerical corruption and influence-peddling one associates with the medieval Catholic church, but here we are, seeing it again in 21st century Baltimore.

    I suppose it’s no surprise that this corrupt mayor’s pastor is on the short list. But one can imagine the ire of those few city councillors worthy of the public trust wringing their hands, shouting “will no one rid us of these turbulent ministers?”

    Sadly, unlike Henry II, they have no drunken knights-errant to deliver the goods, and it would border on blasphemy to elevate Revs. Hathaway and Yeary to the status of a St. Thomas à Becket

  • bmorepanic

    The rational is that poor at Perkins homes provided the economic basis for the enterprise zone, clearing the way for 88 million dollars of tax breaks. I understand the people at Perkins somehow feeling that part of the $88 million should belong to them, or at least benefit them.

    Howevah, the list of beneficiaries of the funds above reads like political payola. I’m left wondering what percentage of dollars will be spent purchasing benefits and how much on administrative costs.

  • trueheart4life

    Wow! Double Wow! These City Hall clowns have delivered an extraordinary piece of utterly odoriferous FOULness!!! Councilman Stokes seems to have squandered this great opportunity to amend the TIF legislation to improve the process and reduce/limit the bloated subsidy to a level that addresses the utility and service deliver aspects of the project’s infrastructure. Instead he seems to have sucummbed to the fanciful dillusions of the Mayoral endorsed extortion gang. Where the heck is the “spin-king” when you need him??? Somebody should tell Travis this is where he enters stage-right — Say something young man!!!

  • davethesuave

    btw, in the first photo, the Right Reverend Todd Yeary looks like he can barely contain himself. And I’m pretty sure Rev McKinney’s bow tie is spinning (he’s not the only one, shout out to Ms Trueheart!). Of course Rev Hathaway’s suit is already bulging; he’s been at this game longer than the other youngsters.

  • Skip727

    Looks like everyone but the tax paying citizens of Baltimore are going to get something out of this deal. Just saying!

    • Mary

      I’d worry less about tax-paying citizens and more about the children. You know, have a little altruism.

      • Matthew Riesner

        They will get industries to aspire to work in and places to work when they are teens and adults. Jobs and work ethic are the way to prevent another generation from living in poverty and needing subsidized housing.

  • Matthew Riesner

    Its the Gimme-Gimmes. It scares that hell out of developers and rightfully so. It’s filthy, stinky, old-school stuff…give to the church and received our blessing and if you don’t give, we will organize our parishioners against you and run out on a rail. Isn’t this the kind of stuff that lead to the split of the church? …and isn’t this why we have a separtation of church and state? If the churches want to get involved in politics, it’s time for them to start paying taxes on their investments and their tens of millions of dollars in landholdings (maybe this would be a good way for the city to balance it’s budget and pay for it’s various forms of social welfare).

  • Barnadine_the_Pirate

    And the shakedowns resume. Can’t we work out some sort of armistice wherein the developers stop getting tax breaks and the self-appointed “community leaders” stop extorting money out of them?

  • MC2012

    This slush fund is far more objectionable than public funding for Harbor Point. It illustrates the political status quo that is quite content to hold all of Baltimore hostage to their pay-to-play schemes. While big projects go through this currupt dance, regular people, house rehabbers and homeowners who invest in the City are left holding the bag.

  • Rocky_Ground

    Love is shakin’ on Shakedown Street.

  • Calvin Garner

    Religious people finding a way to get some more money? I’m certain that all of that money will help the community, and not be used for expensive suits and fancy cars for hustling preachers.

  • trollins

    This is an absolute joke. Not to mention, possibly illegal. This church shake-down committee is basing their argument on the narrative that HP was added to the EZ because of Perkins Homes. I wanted to get to the bottom of this myself. After a few phone calls, lots of reading, and really understanding everything….this didn’t happen. Look at the big picture…our entire city qualifies. Perkins Homes alone had NOTHING to do with Harbor Point getting in the EZ. NOTHING. How come only this community be entitled to this $25m?? Why not my neighborhood? Why not Berea? Why not South Clifton Park? Why not Poppleton? Will this shake-down make Baltimore more attractive to future developments? Certainly not.

    It’s clear that Stokes and his buddies fabricated this whole EZ manipulation thing from day 1 to shake down the developer and line their own pockets. End of story.

    Oh, and the TIF? People need to understand that money is NOT coming out of the city’s general fund! Money is NOT being taken away from schools, police, fire dept, parks, etc to fund HP infrastructure. The TIF will have NO impact on city services at all.

    All said and done, if this whole debacle creates hundreds of millions in extra revenue for the city and creates thousands of jobs but get derailed by greedy interest groups and political figures, the city as a whole loses.

    • Jed Weeks

      It’s a joke to think that adding infrastructure NOW with only a prospect of repayment LATER means that there will be NO impact on city services. Of course there will be an impact on city services–the city will have to provide services to an additional area for decades before they receive tax money for it.

      • Day_Star

        The infrastructure will be paid for by bond holders, not the City. The bondholders will be the one’s looking to be repaid by the increased real estate tax revenue. As for payment for utility services, Exelon and other developments within Harbor Point will be metered and pay for utilities like the rest of us.
        This is a small area that will be very highly utilized and bring in new cash revenue to the City via multiple coffers. Let’s not get this confused with Detroit and its 140 square miles of unsupportable utility infrastructure.

        • Jed Weeks

          Who’s going to pay the maintenance costs on the parks, sidewalks, and roads? That’s what I’m talking about.

  • CMcM

    This is sick, selfish extortion thinly veiled. Looks like Councilman Stokes is a regular at the Church of the Divine Coercion. You should be ashamed of yourselves.

  • Day_Star

    The community deserves something tangible, something measurable. I don’t know the magic $$$ amount, but if the Enterprise Zone — a program designed to spur economic development in distressed areas — is going to be gamed by Beatty, then it’s only fair to have a community benefit since trickle-down economics to adjacent public housing residents is a slow, slow drip, with a few success stories sprinkled on top.
    Just no equity shares for Stoke’s cronies. It’s a misnomer because they wouldn’t really invest and put dollars down; they would be handed a slice of the profits and be compelled (eg. required) to return the favor to the councilperson and their reelection campaigns. Councilpersons should look out for the overall public interest (which Stokes is mostly doing, kind of) and not calculating their personal gain by playing power broker.

  • Lizzie 58

    This is what happens when BDC failed to do their own analysis, relying only on the developer’s numbers and to give the TIF deal a smell test (“can we explain this to the taxpayers and the business community”), combined with political shenanigans on the Enterprise Zone designation (BDC originally excluded Harborpoint). Any honest discussion on how much public asistance should be given to a waterfront project in an unblighted area were brushed aside by union political lobbying ( majority of construction trades union members do not live in the City ) and side shows promoting hastily prepared minority business participation plans and unreasonable (to the point of looking like extortion by religious leaders) economic inclusion plans for city residents. Today, the Downtown Management Authority of 1,200 downtown property owners came out against the TIF, publicly disagreeing with BDC and the head of their own agency.

    The Mayor will stand her ground here and shove this TIF through the Council. (Only the Lord knows what the Mayor will promise to two African American council members to add to the five white council members plus the pro union vote of Sharon Middleton.) But the Mayor must realize that that no matter what happens, a lot of people in the City will be angry at the outcome. The summer of new fees and taxes, crime, and lousy city services has taken its toll. This was the wrong to ask the City taxpayers to do a TIF of this magnitude.

  • Matthew Riesner

    Thank you Brew. The Sun and the various other news outlets have not breathed a word about this church-state sanctioned attempt to extort money from the developer so far.

  • http://slumlordwatch.wordpress.com/ Carol Ott

    It’s really frightening to see how easily some people can be bought, and so publicly. Frightening, and shameful.

    I’d rather see these “men of God” pay some taxes and maybe encourage their fellow pastors to sell off their blighted vacant properties.

    • http://www.BaltimoreSpectator.com/ A F James MacArthur

      Amen!

    • Tom Gregory

      Ms.Ott, Great segment on national evening news the other evening highlighting your noble efforts. Hope it brings a some local media attention.

      • http://housingpolicywatch.com/ Carol Ott

        Why thank you Mr. Gregory, that’s very kind of you. Hopefully my donors will agree with you.

  • Mike Weston

    Why aren’t we hearing anything from the Mayor? Stokes, Perkins Homes residents, the Fells Point Resident’s Association, Baltimore Development Corp, the Downtown Management Authority, the Downtown Partnership of Baltimore and a gaggle of the greedy and self important disguised as “clergy” have all weighed in or made a money grab.
    I’m hearing tons of arguments for and against, but I’m hearing nothing from the Mayor. I would think she would be out front putting forth good arguments for this project and its financing and explaining why the complaints of others are ill founded. Seems to be a leadership vacuum.

    • Matthew Riesner

      It says volumes about her leadship qualities.

  • concentric1

    The one thing that is clear with this Harbor Point deal is that there are no clean hands — anywhere.

  • exspworker

    Where’s my cheese Baltimore?

  • Steven Parke

    $25 million for the price of their support? That is called extortion. Please force these people to pay taxes now that they interfere in politics and real estate. They are breaking the law and no one seems to care.

  • Steven Parke

    Anyone else asking for $25 million for their support – it would be called extortion. I guess not with these men of God…..

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