Tax district seeking to issue bonds Downtown group says projects aren't funded adequately by city

Schmoke has concerns

After hearings, council could vote on proposal as early as October

July 19, 1996|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

Hoping to expand its influence downtown, board members of Baltimore's first special tax district are pushing city officials for the right to issue capital improvement bonds for projects they say are inadequately funded by City Hall.

The move, unprecedented locally, could give broad power to the Downtown Management District and make it more like a second city government.

The Planning Commission conditionally approved the tax district's request yesterday, pending a review by the city's Law Department.

But Mayor Kurt L. Schmoke expressed reservations yesterday.

"Our city solicitor has some serious concerns about the authority's ability to issue long-term bonds," Schmoke said through his press secretary, Clinton R. Coleman.

"I simply feel that the city must make clear to potential purchasers that the city government does not stand behind these bonds either as a legal obligation or a moral obligation."

Whether the management district's issuing bonds would affect the city's bond rating is unclear. But Schmoke has vowed to maintain Baltimore's high bond rating, which is higher than those of most East Coast cities.

Laurie B. Schwartz, president of the Downtown Partnership of Baltimore, which oversees the tax districts, said current rules stymie the Downtown Management District's initiatives to improve the 106-block downtown tax district.

"Across the country, you could find examples of management districts taking on elements of work that historically belonged exclusively to government," she said.

"And here in Baltimore, business leaders are telling us that attractive pedestrian environment is important to business."

Last year, the 5-year-old tax district spent $2.4 million on promotions, security and sanitation for its 1,800 commercial properties.

Final approval of the bond-issuing power is a long way off. The request is headed for a series of public hearings and then to the City Council for votes in October at the earliest.

The Downtown Management District's proposal would allow its board to issue bonds without voter approval. Traditionally, bond issues are submitted to voters first.

Schwartz said the group needs more latitude in borrowing money. Because the city must approve the tax district's existence every five years, lenders have not allowed loans to extend beyond that term.

"The message is lost that downtown is tired and needs a face lift, and this provides an unprecedented opportunity for a partnership between city and federal dollars to improve the environment downtown," Schwartz said.

The idea of a special tax district angling for more authority could spread to the city's other tax districts, Charles Village and Midtown.

Alvin James Levi, president of Howard Street Jewelers, which is in the Downtown Management District, opposed that idea.

Yesterday, he tried to persuade the Planning Commission to quash the district's request.

Levi said he was concerned that merchants' businesses could be taken away if the district was not voted back for another five-year term and a bond was in default.

"What we could be witnessing is the birth of a monster," Levi said.

Pub Date: 7/19/96

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