Tax breaks for developers pushed by mayor's office

New PILOT bill angrily opposed by foes of Wyndham hotel

Commercial real estate

February 03, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Schmoke administration is soliciting support for a newly drafted bill that could exempt from city property taxes nearly every new commercial real estate project over $10 million.

The legislation, prepared by city officials, would reinstate $75 million in tax breaks for the Wyndham Inner Harbor East hotel.

The new bill would allow tax breaks for hotels including the $134 million Wyndham now under construction, as well as new office buildings, retail projects, apartments and garages.

The bill, which would grant payments in lieu of taxes (PILOTs), represents a sweeping change from the current law, which gives PILOT tax breaks only for developments on city-owned land or for limited projects such as low-income housing.

A Baltimore Circuit Court judge struck down the PILOT for the Wyndham project in November, after citizens groups filed lawsuits to protest the $75 million tax-break package and block development of the 31-story hotel.

The Wyndham's developers said last week that the 750-room hotel will not be completed without PILOT tax breaks. City officials contend that the project is critical to the success of the $151 million expansion of the Baltimore Convention Center.

Wyndham opponents reacted angrily to the new PILOT bill.

"I object to the fact that the city feels they have to go to the General Assembly and change the law because they lost a court case," said John C. Murphy, an attorney representing citizens groups opposed to the hotel.

"They should be good losers and walk away from it," Murphy said.

"They've filed an appeal; let them win the appeal. The PILOT law was enacted to help social programs like low-income housing that couldn't be financed any other way.

"This would be an incredible change."

The new bill specifies that PILOT projects must be located in urban renewal areas throughout the city, encourage economic development, create jobs and promote the improvement of the city. It identifies 11 urban renewal areas, including the financial district, Charles Center, the Camden Station area and Inner Harbor East, according to a draft copy of the legislation obtained by The Sun.

A spokesman for Mayor Kurt L. Schmoke said the PILOTs are necessary to stimulate economic development.

"In today's economic climate, the administration clearly feels our competitive position would be hampered without the access to these important tools," said Clint Coleman, the mayor's spokesman. "And that is most evident in the slowness of the hotel development downtown. Not having a PILOT has been a major stumbling block."

Coleman added that use of the PILOTs will be scrutinized closely and that each PILOT must be approved by the mayor and the City Council.

But the citizens' groups remain firmly opposed, saying that the PILOTs are both unnecessary and detrimental to the city's overall tax base.

"You can't just go and give everyone a tax break," Murphy said, noting that beneficial projects such as Harborplace and Charles Center were developed without any tax breaks.

Pub Date: 2/03/99

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