With all of the understandable focus on the election tomorrow and the various anniversaries connected with the death of Freddie Gray in police custody, the ongoing negotiations regarding the massive TIF for Kevin Plank’s Port Covington project is being lost in the noise–which is exactly how the current power structure in the city wants it.
Make no mistake–this $535 million dollar TIF is being pushed through this summer in part to avoid having to involve a new mayor and new City Council which has been hearing ANGER about our city’s current practice of corporate welfare at many of the doors we’ve knocked on during this campaign.
Please note: I am not opposed to all TIFs. The concept of TIFs–floating public bonds to cover up-front infrastructure costs, then paying off those bonds using increased property tax revenue from the project in question–can make good sense. But I am opposed to a bad deal. This is shaping up, so far, to be a terrible one for our city.
1) No provision has yet been made in state law, or in this TIF application, for a permanent solution to the GCEI state funding formula for our local schools. That is to say–we risk losing tens of millions of dollars annually in state support for our public schools if this TIF goes forward with our laws as they are today. Yes, a temporary fix was passed in Annapolis, but that will expire in just a few years.
2) There is no true inclusionary housing as part of this plan. Sagamore has been given permission to set a goal of 10% of the housing being “affordable”–in the terms of this deal, “affordable” meaning suitable for a 4-person household with $65,700 in income. That’s 57% higher than the MEDIAN household income in our city. How can “affordable” housing be intended for people making far more than the median income?
3) It’s not just the $535 million dollar TIF to pay for infrastructure. With federal and state contributions, the public investment gets close to a billion dollars. On top of that investment, the projects are eligible for property tax breaks totaling $807,610,695. That’s right. Not only are we fronting $535 million of bonds to pay for infrastructure (which will cost $1.4 billion by the time we finish paying off the debt), but we’re also piling $800 million in tax breaks on top of it. $346 million of that is Enterprise Zone funding, intended to spur commercial development in impoverished parts of Baltimore. There’s nothing impoverished about Port Covington. It’s mostly vacant land with no natural geographic connection to any residential neighborhood at all–and certainly not an impoverished one.
4) Based on our experience with previous TIFs, the TIF money itself will likely not be sufficient to cover all of the infrastructure projects imagined in the TIF application. Will the City be on the hook for cost overruns or infrastructure not included in the TIF application? That’s exactly what has happened in Harbor Point with the Central Avenue bridge and a new water line.
5) After the Brownfield tax credit and the Enterprise tax credit and the Homestead tax credit chops the tax liability down by greater than 85% for the first ten years, and the remaining money goes to pay off our TIF bonds, how much tax money (if any) will actually be left to provide police services, fire protection, and schooling to the people in the 5300 residential units and 9.4 million square feet of commercial space? Not much.
Alright. I’ve gotta get back to campaigning. But this was too important to simply let slide, which was the intention of people running the process (seeing as how they released the full TIF application late on a Friday before Election Day, when they knew people wouldn’t be paying attention).
I look forward to working on this critically important matter more when I am serving alongside you as our councilperson.
The actual TIF application, all 534 pages of it: http://board-of-finance.baltimorecity.gov/sites/default/files/Port%20Covington%20TIF%20Application%204.19.16%20%28BOF%29.pdf
Some other recent news coverage: