Borrowing to beautify downtown Downtown partnership: Caution needed before group incurs huge debts.

July 31, 1996

BUSINESSES IN THE downtown special benefits district are complaining that center city looks seedy. They may be right, but a proposal to allow the Downtown Partnership, which manages the district, to borrow a million dollars or more for a needed facelift must be studied carefully.

Laurie B. Schwartz, president of Downtown Partnership, says center city businesses are complaining about cracked sidewalks, crumbling curbs, unpainted crosswalks and broken benches. They want the district to have the power to borrow money to develop and implement a streetscape plan that would include new landscaping, sidewalk treatments, banners and other elements to give pedestrians a greater sense of being in a special place.

Initial reports about the idea said the partnership wanted the ability to issue capital improvement bonds to pay for such a project. Ms. Schwartz says benefits districts in New York and Philadelphia have financed projects that way, and the partnership raised the possibility of a bond issue in a questionnaire it mailed six months ago to 1,200 taxpayers in the district.

Sixty-seven percent of the respondents said they would support a partnership bond issue to spruce up downtown. But that idea drew opposition from Mayor Kurt L. Schmoke, who fears bond indebtedness by the partnership could affect the city's bond rating.

The partnership is now discussing more conventional financing, borrowing money and increasing its property tax surcharge to repay the debt within a set period. If it borrowed $1 million and paid it back over eight years, the district's property tax surcharge would rise from 30 cents to 32 cents per $100 of assessed property value. A downtown property owner paying a $500-a-year surcharge would pay $531; one paying $10,000 a year would pay $10,630.

Property owners already paying extra for sanitation and security services they don't get from the city want more. The city is repairing curbs and painting crosswalks, but downtown businesses want an attractive, vibrant environment to match the Inner Harbor's enticements. If they're willing to pay for that, let them. But before Downtown Partnership is allowed to borrow, it must be clear that these debts are not the city's responsibility and that any loan must first be approved by its members.

Pub Date: 7/31/96

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