Setting the record straight on State Center

May 16, 2011

We are writing as representatives of the state of Maryland to provide facts regarding the State Center project in response to inaccurate statements made in several letters to this paper.

First, the 28-acre project site, which now yields zero tax dollars, will be placed on the tax rolls to generate hundreds of millions of dollars in new city and state taxes over the course of the project's life.

Second, the developer will pay to the state an estimated $135 million over the next 50 years for a ground lease on the property — a site appraised at $1.8 million but currently generating zero dollars for public benefit.

Third, the state will rent office space in two new office buildings there for a base rent rate of $25.85 per square foot, plus its share of operating costs, estimated at less than $10 per square foot. That represents the going rate for new construction in Baltimore City.

Fourth, the state will finance and own a new garage, the majority of which will be occupied by state employees. The balance will be available to others at market rates payable to the state.

Fifth, the state has proposed that the city invest a portion of the new taxes created by the project to fund $15 million in public improvements that will benefit the area.

To correct some specific misstatements: the project does not include large subsidies nor does a $300 million tax increment financing package exist; it will have no net impact on the state's office presence in Baltimore's central business district, where it is the largest tenant; and the first phase of the project, the only one approved so far, includes just 15,000 square feet of commercial office space for the private market, which does not pose a competitive threat to any other area of the city.

The state rejected the option of moving the state agencies out of State Center for three reasons: (1) evacuation would decimate this portion of Mid-Town; (2) the contiguous vacant space in the central business district does not currently exist; and (3) the state would lose an opportunity to work with the city to create a livable community for the West Side incorporating smart growth principals like environmentally sensitive design and transit-oriented development.

Finally, the developer was selected under a significant, lengthy, competitive process. It changed a portion of the team during the course of the project, pursuant to its contractual rights as approved by the Board of Public Works and after approval by both the executive and legislative branches under the watchful eye of the Attorney General's Office. In fact, the project has been approved five times by the Board of Public Works.

Additional information on State Center can be found on the project's website at http://www.statecenter.org.

Michael Gaines and Christopher Patusky, Baltimore

Mr. Gaines is assistant secretary for real estate in the Department of General Services and Mr. Patusky is director of the Maryland Department of Transportation's Office of Real Estate.

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