Baltimore City will hold off on issuing TIF tax financing bonds for Harbor Point until the project gets a green light from federal and state environmental regulators.
Stephen M. Kraus, chief of the bureau of treasury management, confirmed today that the city will not issue the first tranche of Harbor Point special obligation bonds until after the Environmental Protection Agency and Maryland Department of the Environment clear the project.
Two weeks ago, the EPA and MDE voiced a series of objections to the air monitoring system proposed by Beatty Development Group, which is seeking to build a $1 billion office and apartment complex on the 27-acre site.
Regulators called on the developer to modify its plan to determine if excess chromium was being released into the air during construction of the projected 22-story Exelon Building.
The agencies also called for more information about the piercing of the surface cap to construct foundations for the building.
Harbor Point Environmental Meeting Tonight at 7 p.m.
City Councilman James P. Kraft will be hosting a public meeting on Harbor Point between 7-9 p.m. at the Morgan Stanley building, 1300 Thames Street. The meeting was requested by some Fells Point residents concerned about the environmental risks of building the Exelon Tower. Representatives of the Beatty Group, EPA and MDE will be available for questions. (MORE)
Last month, Kraus said he expected the city’s Board of Finance to call a special meeting this month to vote on the first tranche of Harbor Point bonds, set for about $40 million. The city recently hired Siebert Brandford Shank, of Washington, D.C., as placement agent for the bonds.
Kraus said the board will not issue the bonds until after the EPA and MDE sign off on the project. He said that he hoped the matter would be resolved soon.
Clock is Ticking
Michael Beatty, the developer, is under intense pressure to break ground on the complex.
He snagged the right to build Exelon’s regional headquarters – beating out competitors seeking to locate the building closer to downtown – in part by promising the Chicago-based energy giant to have the structure ready for occupancy by June 2015.
With the active support of Mayor Stephanie Rawlings-Blake, the City Council approved a $107 million TIF bond issue that would be paid by diverting property taxes from the project for the next 37 years. The bonds would be issued in three tranches as the project progressed.
Together with interest, the bonds would cost the city $281 million through year 2049, according to a financial consultant.
With the tax subsidy in hand in early September, Beatty proposed to break ground for the Exelon Tower by mid-October. His last hurdle was certification by the EPA and MDE of the detailed environmental plan submitted by his engineering consultants, Mueser Rutledge.
The project’s timing was delayed, first, by the federal government shutdown, which closed EPA’s offices, and then by the unexpected rejection of Harbor Point’s plan by regulators two weeks ago.
The Beatty Group is required to resubmit a plan to regulators by the end of November, who will have up to 60 days to respond.
Financing a Public Square and Bridge
The first tranche of TIF bonds would finance the construction of a central square, located immediately south of the Exelon Tower, and a four-lane bridge over an old canal that separates Harbor Point from nearby Harbor East.
The bridge would be located at the bottom of Central Avenue and extend about 250 feet across the canal, breaching a three-foot wide and 70-foot-deep retaining wall.
The EPA has expressed concerns about how the bridge pier would be constructed in order to maintain the integrity of the wall, which keeps chromium-tainted groundwater from seeping into the Inner Harbor.