Browns can gain some tax breaks Site for new stadium in empowerment zone

November 08, 1995|By Eric Siegel | Eric Siegel,SUN STAFF

A rent-free stadium and the right to sell permanent seat licenses aren't the only advantages the Cleveland Browns will acquire in moving to Baltimore.

The Browns -- along with other businesses involved in the construction and operation of the new football stadium -- also will be eligible for some of the federal tax breaks available to enterprises located in Baltimore's empowerment zone revitalization area.

That's because the site for the new stadium is just inside the boundary of the $100 million federally funded empowerment zone in Southwest Baltimore. Oriole Park at Camden Yards, however, is located just outside the zone, which was drawn up according to federal census tracts to include some of the city's most distressed neighborhoods.

The Browns and other businesses can receive wage tax credits of up to $3,000 a year for each zone resident they hire -- including laborers and office and maintenance workers.

Because few if any of the Browns' high-priced football players are likely to take up residence in the empowerment zone, it is considered unlikely that the football organization would meet the federal requirement for using the larger tax breaks of accelerated depreciation of equipment and tax-exempt bond financing.

That requirement stipulates that 35 percent of a work force must reside in the zone before a business can take advantage of accelerated depreciation of up to $37,500 and tax-exempt bond financing of up to $3 million.

But those breaks could well be used by companies involved in the cleaning, concessions and parking for the new stadium.

"I would be surprised if a lot of businesses don't try to structure themselves to take advantage of those breaks," said William E. Carlson, the lawyer for the quasi-public board overseeing the city's empowerment zone effort.

That structuring could involve establishing a separate division of a national company or creating a joint venture with a zone business, Mr. Carlson said.

Leslie Bender, a consultant on economic development to the empowerment zone, ruminated about using the "leverage of the empowerment zone location" to use local silk-screening companies to produce Browns T-shirts and said that vacant or underused warehouse space nearby could be converted to business use or parking facilities.

Coupled with empowerment zone tax incentives, a new stadium also could be a powerful incentive in helping to attract businesses to the Russell Street corridor and Carroll Industrial Park by making the whole area more attractive, she said.

"Look at all the beautiful street-scaping that was done for Camden Yards," Ms. Bender said.

In its successful application last year to be designated by federal officials as one of six urban empowerment zone areas, Baltimore never mentioned the possibility that a new stadium could be built within the zone boundaries. But the $200 million price tag of the state-financed facility is sure to be included in any tallies of investment in the revitalization areas of East, West and South Baltimore.

Still, some residents are skeptical that the stadium alone will transform the neighborhood, pointing out that Camden Yards has had a minimal effect on the surrounding area.

"I don't think it's had a major impact," said Arnold K. Sherman, who is active in the empowerment zone in Pigtown.

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