Harbor Point developer Michael S. Beatty is ready to put shovel in the ground.

Financing for construction of the city’s biggest private development project has been finalized. The first package of tax increment financing (TIF) bonds was sold by the city to Beatty in a $36 million deal inked on April 3.

After that deal closed, a financing plan for the waterfront development commenced, Stephen Kraus, chief of treasury management in the city’s Department of Finance, said yesterday.

Beatty’s Harbor Point Development Group LLC pledged the TIF funds to M&T Bank “as a pass-through structure” essential to the financing plans of the first phase of the development – building a 23-story tower for energy giant Exelon.

The developer also closed on a $67 million equity loan from JP Morgan Chase Bank and a $138 million construction loan for the Exelon Tower from M&T Bank.

Beatty’s development company will invest just $9.8 million in the Exelon project, much of that in equity already accrued at the site. “The project is now going to move forward and construction is underway,” Kraus said yesterday.

Marco Greenberg, a vice president with the Beatty organization, confirmed the project is moving forward.

Of the intricate financing structured by the Gallagher, Evelius & Jones law firm for the developer, Greenberg said in an email:

“A bond was delivered to the developer which will accrue principal as infrastructure is completed. The developer has secured a private bank loan to provide the direct funding for the infrastructure, and the interest rate on the bonds is equal to the interest rate of the loan. Each month the principal amount of the bond increases, so that the outstanding bond amount is approximately equal to the bank loan balance.”

Environmental Plan Approved

As soon as the Exelon Tower is completed, the bonds will be publicly sold “and the proceeds used to pay off the bank loan,” Greenberg said. The city-issued TIF bonds will be used to pay for public infrastructure at the former industrial site along the western shore of Fells Point.

After numerous refinements to the construction and air monitoring plan by the Environmental Protection Agency and Maryland Department of the Environment, Beatty got the green light last month to penetrate the “cap” that contains hazardous chromium residue at the site.