Tax benefits

March 28, 2003

WITH ITS abandoned cluster of once-notable mercantile buildings, the southwestern corner of Howard and Franklin streets in downtown Baltimore looks like a ghost town. But not for much longer.

Starting this fall, five historic buildings there are to be converted into 64 apartments renting for $800 to $1,300 a month, a 75-space garage and street-level retail shops. That project would "absolutely not" be feasible without more than $2.5 million in state historic tax credits, says developer Wendy Blair.

Such chancy revitalization projects may be impossible to get off the ground after June if the state's 6-year-old historic tax credit program is killed. Why take the risk?

Legislators trying to reconcile conflicting House and Senate positions on the issue should leave the program intact.

The Senate wants to end historic tax credits for commercial projects, reserving them only for residential renovations. The House initially preferred no changes this year because the program will be up for renewal next year anyway. However, there now seems to be a push for the House, too, to kill the commercial component.

That would be a tragic mistake. It would not produce meaningful immediate savings but it would do incalculable damage to revitalization, particularly in Baltimore.

Since 1997, historic tax credits have enabled the renovation of some 750 old buildings in various parts of Maryland. The biggest, and most successful, projects have involved commercial properties in Baltimore. The economic impact of such huge office conversions as Tide Point and Montgomery Park is easy to see. They employ hundreds and are now transforming Locust Point and Carroll Park residential areas as well.

Conversions of formerly vacant office buildings into apartments are equally compelling. The Munsey Building, near City Hall and the city courthouse, and The Standard, overlooking Preston Gardens on St. Paul Street, are catering to professionals who will add to the livability and vibrancy of downtown. They will be spending, too, and each time they do, the state gets a share.

Even the tax credit program's opponents acknowledge its success. Their complaint is that it costs too much money at a time when the state needs every penny to bridge a huge budget gap.

That is a shortsighted view. The tax credits are seed money that produces more money. For a small savings today, legislators would forsake much untapped income potential in the future. How foolish!

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