City officials and business leaders unveiled a plan yesterday to fight downtown crime and grime by raising city property taxes on commercial real estate by 5 percent throughout downtown Baltimore.
Gov. William Donald Schaefer joined city officials and three dozen business leaders at the Center Club to drum up support for the proposal, which would create a "special benefits district" containing 1,000 private properties in a 90-block area.
The proposal must be approved by the General Assembly and the City Council. But leaders of the city's General Assembly delegation say they may not support it unless business leaders back a statewide tax package that will funnel more money to the city.
Under the plan, annual tax increases would range from $924 for a 5,000-square-foot commercial building to $80,000 or more for the $90 million Commerce Place office tower nearing completion at South and Baltimore streets.
The tax district would be bounded roughly by Centre Street on the north, Greene Street on the west, the Jones Falls Expressway on the east and the south shore of the Inner Harbor.
The surcharge would apply to all taxable properties except for residential buildings with one to four units.
The money raised, an estimated $2.3 million a year, would be put back into the commercial district in the form of extra maintenance and street sweeping, security services, marketing, promotions and other activities. All current city services would be maintained.
Business leaders say that such disstricts have been created in 1,000 other cities, including Philadelphia, Denver and Portland, Ore., and that Baltimore's central business district needs it to supplement city services.
"With the decline of federal dollars, state cutbacks and the need to devote large portions of its limited resources to education and other essential services, our city can ill afford to be the sole keeper of downtown," said H. Grant Hathaway, chairman of Maryland National Bank and a leader in the effort to establish the taxing district.
"If downtown is to survive and be competitive with suburban office parks, new suburban residential developments and regional shopping malls, we must examine other options for helping maintain downtown," Mr. Hathaway said.
The plan has been in the works for several months, and many property owners were briefed about it individually before yesterday's breakfast meeting.
Board members of the Downtown Partnership of Baltimore, the 10-year-old management organization that works to improve security and cleanliness downtown, support the plan enthusiastically, calling it the most equitable way to share the burden of maintaining a vibrant, clean and safe business district.
Some property owners said they were worried about how the money would be spent and that that the city would cut its contribution to basic services once the new tax funds became available. But none objected to the concept outright.
Kevin McAndrews, a vice president of group building Commerce Place, said his company has promised to maintain a small park that it is creating at the foot of its office tower.
He said his company would support the special benefit district plan if it knew the city would also make a commitment to more improvements, such as enforcing laws that would help clean up the peep shows and adult bookstores on "The Block," in the 400 block of East Baltimore Street.
State Sen. John A. Pica Jr., chairman of the city's Senate delegation, said after the breakfast meeting yesterday that business leaders strongly support the bill. "They want it very badly," he said.
But, Mr. Pica added, city legislators want to see downtown business leaders lobbying for broad fiscal relief for Baltimore before they will pledge their support to the measure.
"They can have this district if they want it. But if the city doesn't receive permanent and significant funding, they'd be all dressed up with no place to go," Mr. Pica said. "Without broad help, the level of services in this city would be decreased so drastically that few people would want to come to our city."
Mr. Pica said that business leaders need to make a strong statement to legislative leaders. "They need to say that the business climate of the entire state will be damaged if Baltimore continues to suffer like this," he said. "Unless that is communicated loudly and clearly, I don't expect this to pass."
Bill Struever, a downtown redeveloper and past president of the Downtown Partnership, said he believes the district is the best way to improve the downtown environment.
"We're trying to fill the role of a mall manager, in terms of creating an exciting environment to live and shop and work in," he said.
"This is more fair in terms of everybody chipping in, and much more efficient . . . It's really creating a platform for doing a lot of things."
State legislation will be introduced this week to change the City Charter to authorize the mayor and City Council to establish the district and impose a tax surcharge.