Schmoke asks review of development office

March 31, 1995|By Eric Siegel | Eric Siegel,Sun Staff Writer

Acknowledging a continuing debate over the effectiveness of Baltimore's economic development agency, Mayor Kurt L. Schmoke yesterday said a panel of business people will make a "top to bottom" review and recommend changes within 60 days.

Mr. Schmoke also announced the creation of a committee of top city officials to review financial controls in city agencies, as well as allegations of fraud and waste. That follows a year of controversy over a $25 million no-bid repair program run by the Housing Authority of Baltimore City.

Both moves mark an attempt by the mayor to address issues that were targeted in City Council hearings this month.

The review of the Baltimore Development Corp. is "overdue," said Michael A. Conte, director of regional economic studies at the University of Baltimore. "I think there's been a growing chorus of frustration about what's happening in the city."

In December, The Sun published a lengthy article quoting corporate executives who said the BDC lacked leadership and did not understand the needs of business.

Criticism of the city's record in attracting and retaining businesses was renewed after USF&G Corp.'s decision in January to vacate its downtown headquarters and consolidate operations in Mount Washington.

Yesterday, as expected, Robert L. Hannon, second in command at BDC, was named to head Baltimore County's economic development efforts.

Also during the past year, the housing authority's no-bid repair program has been under fire. A continuing federal corruption probe has resulted in several bribery convictions, and a Sun series detailed instances in which inexperienced contractors were paid for shoddy work or work that was not done.

Mr. Schmoke said he would name the members of the BDC review panel today, adding that they would be "business people who have experience dealing with economic development entities."

The mayor, who strongly defended the agency after The Sun's December article, promised that "everything'll be on the table" regarding the agency. "Some people have talked about the leadership of the organization, others have praised the work of BDC but said they think it's trying to do too much with limited resources."

Business and civic leaders applauded creation of a panel to review the BDC, a $3 million-a-year quasi-public group the mayor created four years ago by merging two economic development agencies.

Walter Sondheim, a former BDC board member and a key figure in the city's downtown revival, declined to say whether the review should have come sooner. But he said it was a good idea.

"I think it's always wise to review things," said Mr. Sondheim, a special adviser to the Greater Baltimore Committee.

One local chief executive officer who was sharply critical of BDC in December said the action "came faster than I hoped."

"I really have one reaction: I think it's wonderful news," said Edward B. Hutton Jr., president and chief executive officer of Waverly Inc., a publishing company that is a century-old Baltimore institution.

City Councilman Martin O'Malley and Council President Mary Pat Clarke said last week's four-hour council hearing on the BDC highlighted several problems, including a shortage of staff and lack of focus.

"The thing I came away from was: How can 30 people hope to stay on top of all the things this agency has to stay on top of?" said Mr. O'Malley, a 3rd District Democrat who chaired the hearing.

Mrs. Clarke, who is challenging Mr. Schmoke's bid for a third term this year, questioned his actions.

"Faced with problems, there are two things you can do -- correct them or form a committee. I prefer to correct them," she said.

The financial controls committee is made up of city Finance Director William R. Brown Jr.; Personnel Director Jesse E. Hoskins; City Solicitor Neal M. Janey; City Auditor Allan L. Reynolds; and Lynnette W. Young, the mayor's adviser.

Mr. Schmoke said the idea for the committee came from Mr. Brown.

"From my point of view, it makes a lot of sense in light of all the controversy around the housing authority to have something like this," the mayor said. The committee will provide "a single point of focus for allegations of fraud and abuse and mismanagement," Mr. Schmoke said. It also will oversee the collection of money by various departments.

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