After spending $54 million to help cover expenses at the Pulaski incinerator, city officials may move today to sever ties with millionaire owner Willard Hackerman.
Over 14 years, city taxpayers have covered reimbursements for the incinerator's equipment, maintenance -- and even its mortgage and taxes. The Schmoke administration's agreement proposes a final payment to Mr. Hackerman of $450,000 for construction costs that the city agreed to pay under the original deal.
But the city's proposal to pay Mr. Hackerman more money -- on the Board of Estimates' agenda today -- has sparked opposition.
City Councilman John L. Cain, a Democrat whose East Baltimore district includes the incinerator, joined local environmentalists in calling the agreement a "sweetheart deal."
"Given the history and the millions of dollars we've paid to the Pulaski Co. to subsidize its operation, paying additional money is a completely inappropriate use of taxpayers' money," said Daniel L. Jerrems, chairman of the Baltimore Recycling Coalition. "This agreement is so bad for the city that it should be torn up, thrown away and renegotiated from scratch."
Charles Fax, the Shapiro and Olander lawyer hired by Baltimore to negotiate the settlement, said he believes the city came out ahead.
He noted that the city no longer will pay Mr. Hackerman $1.7 million each year, which Mr. Fax described as an inflated fee for dumping trash. The city also got out of an obligation to pay $60 million to upgrade the incinerator and settled a breach of contract lawsuit filed by Mr. Hackerman against the city in 1993.
"We cut our losses," Mr. Fax said. "We're not obligated financially anymore."
In addition, he said, Mr. Hackerman would pay the city $10 million if he decides to build a new incinerator on the property -- a prospect now barred by an incinerator moratorium.
Mr. Hackerman, who also owns Whiting-Turner Contracting Co., did not respond to requests for comment.
Over the years, Mr. Hackerman has become known not only for his close relationship with politicians such as former mayor and JTC Gov. William Donald Schaefer, but also for his philanthropy. In 1984, for example, Mr. Hackerman bought a historic, 19th-century mansion on Mount Vernon Square and donated it to the Walters Art Gallery to display Asian art.
His involvement with the incinerator began in 1981 when then-Mayor Schaefer agreed to sell the facility to him. The city received $4 million up front in the deal, but agreed to pay 85 percent of operating costs.
Yesterday, Mr. Cain said, "In 1981, Willard Hackerman got a sweetheart deal from Mayor Schaefer. Now he is getting another sweetheart deal from Mayor [Kurt L.] Schmoke . . ."
This week, environmentalists said they were also angry that Mr. Hackerman was delinquent on his taxes of machinery and office equipment at the incinerator. But those taxes and penalties -- totaling $2.6 million -- were paid earlier this week, according to city tax records.
Mr. Jerrems and other environmentalists said they were concerned that the Schmoke administration gave no public notice of the proposed settlement.
Instead, environmentalists received copies of the proposed agreement from Mr. Cain.