From Alex. Brown Inc. to the Cleveland Browns, it has come to be commonplace for city and state governments to offer financial incentives to keep businesses from leaving or to lure new ones.
But should Baltimore and Maryland pay millions of dollars to an apparently thriving business that has made no noises about moving elsewhere?
That is a key question that has emerged in the wake of a request by the Rouse Co. to have the city and state pick up two-thirds of the cost of a $20 million project to refurbish its 15-year-old Harborplace pavilions.
Mayor Kurt L. Schmoke and some economists offer a barely qualified yes.
"Given the significance of Harborplace to the city, I do think some level of participation is appropriate, and I think the citizens will support us on that," the mayor said in his weekly news conference yesterday.
But some state legislators have their reservations.
"I just don't see the sense of this," said Del. Robert L. Flanagan, a Howard County Republican. "How can you ask a family that earns $30,000 to $40,000 a year to subsidize the Rouse Co.?"
House Majority Leader John Adams Hurson, a Democrat from Montgomery County, said: "At first blush, it doesn't appear to be an appropriate use of state funds, but I don't have all the information."
Harborplace, the linchpin of Baltimore's Inner Harbor redevelopment and an attraction that has at times outpaced Disney World in the number of visitors it has attracted, needs major renovations to remain competitive, the Columbia-based developer says.
The Rouse Co. bases its argument for city and state support for Harborplace in part on the numbers the retail stores and restaurants in the pavilions have generated since they opened in 1980: $100 million in city and state payroll taxes, $15 million in city property taxes and $1.5 million in ground rent to the city.
Despite Harborplace's success, a Rouse executive says that Rouse, a publicly-traded company with annual profits of nearly $100 million, hasn't "walked away with a windfall profit" from it.
"It needs to be reinvested in. It needs to be done by all of us," said Anthony T. Hawkins, a Rouse vice president.
The company's request for aid comes at a time when Baltimore and Maryland are placing increased emphasis on economic development, trying to reverse the loss of tens of thousands of jobs in the city over the past several years, and to prepare for an estimated loss of 20,000 federal jobs over seven years throughout the state.
But the city and state also face continued financial problems, as they both lag behind much of the country in emerging from the recession of the early 1990s.
Gov. Parris N. Glendening's answer to the problem is his pledge to create thousands of new private sector jobs, sometimes through the use of the kind of financial incentives Rouse is proposing. However, some legislators have likened such deals to "corporate welfare."
Mayor's qualified support
Mr. Schmoke said yesterday that many details of Rouse's request were "up in the air," including when they would need the money and how much would be used for city-owned walks and promenades and how much for the buildings. But even as he vowed some level of support for Harborplace's renovations, Mr. Schmoke acknowledged that Baltimore could not support every business that asked for financial aid.
"None of us has a bottomless pit of funds," he said. "And certainly not every business can be supported with grants."
But economist Michael A. Conte says Harborplace is not every business. "The point of that project is it's a pump-primer" for the entire downtown area, said Mr. Conte, director of regional economic studies at the University of Baltimore.
Mr. Conte said the reason for Rouse's request might be based as much on a desire to maximize profits as on economic necessity.
"The answer may well be that they don't need it, they just want it," he said. But if what the company says is true, he said, "The city would be crazy not to participate in this project."
Others have some questions about public policy -- and public money.
'A persuading job'
"Rouse would have to do a persuading job to convince me public funds ought to be spent to fix up a commercial building, even one as highly visible as Harborplace," said George A. Nilson, the president of the Baltimore Homeowners' Coalition, which monitors city tax and spending policies.
To House Speaker Casper R. Taylor Jr., a pro-business Democrat from Cumberland, the argument that taxpayer dollars should be used to help businesses that contribute to the economy is "a little bit of a stretch."
"You can say that the state and and city have vested interests in all economic development, but that doesn't mean all existing economic activity qualifies for continuous state aid," the lawmaker said.
Added Senate President Thomas V. Mike Miller Jr., a Prince George's Democrat: "Harborplace is the jewel in the state crown, and we have to make sure it stays fresh and attractive, but we have to assess the state's ongoing needs. We have finite resources."
