Mayor Kurt L. Schmoke announced yesterday that he has decided to merge Baltimore's two quasi-public economic-development agencies, the Baltimore Economic Development Corp. and Center City-Inner Harbor Development Inc., by July 1.
The idea has been under study since November. It was seen in part as a cost-saving measure, but the mayor said yesterday that he is convinced it also will provide a more effective way to promote the continued investment by businesses in Baltimore.
David W. Gillece, BEDCO president and acting head of Center City-Inner Harbor, will head the as-yet-unnamed agency.
"A single economic-development agency will be better suited to sustain . . . investment by providing a visible point of contact for businesseses seeking to grow and invest in Baltimore," Mr. Schmoke said. "Within this context, we will maintain a focused effort to increase the already significant momentum in our downtown area."
Mr. Schmoke said that the city still has a number of issues to resolve, such as choosing a name and single location for the new organization. He said attorneys are drafting new bylaws and other legal documents needed to form the agency and that the merger will take place over the next several months so that the two entities will be "fully integrated" when the city's new fiscal year begins July 1.
Center City-Inner Harbor was formed in 1989 to oversee development within the central business district and has an annual budget of $1.7 million. BEDCO was formed in 1976 to facilitate the expansion of businesses throughout the city and has a budget of $1.6 million. Both have about 25 employees. They are non-profit corporations and provide services to the city under contract to the Department of Housing and Community Development.
Mr. Gillece said the merger will be similar in concept to the 1989 merger of two development agencies, Charles Center-Inner Harbor Management Inc. and Market Center Development Corp., to create Center City-Inner Harbor Development.
He said his initial figures indicate that the savings of combining the two agencies will be about 10 percent of the $3.3 million budget for the separate agencies, or about $300,000 -- not counting some possible one-time merger costs.
He said he sees the need for "a few layoffs" after July 1 as a result of the merger. Those layoffs would occur whether or not there was a merger because of the mayor's directive for department heads to trim their budgets and because his agency will lose $200,000 in Community Development Block Grant funds in the next fiscal year, he said.
Mr. Gillece said his annual salary is $81,000 and that he does not know whether it will change as a result of the merger. He added that even though the two agencies are quasi-public in nature, he and his staff are abiding by the wage freeze that Mayor Schmoke announced this week for city employees.
Although concerns about efficiency and savings helped prompt the merger, Mr. Gillece also said he thinks it will result in a more effective economic-development program for the city. "The synergies of missions, programs and professional staff skills are real and substantial," he said. "If we weren't becoming more effective, it wouldn't be worth doing."