State Center pledge continues back-and-forth on city project

Mayor, supporters tout neighborhood benefit; conservative group sees 'taxpayer handout'

July 10, 2011|By Michael Dresser, The Baltimore Sun

Proponents of an ambitious plan to redevelop the city's largest state government complex gathered Saturday to pledge that the project's benefits would be shared among surrounding communities and disputed a recent report critical of the roughly $1.5 billion State Center project.

The conservative-leaning Maryland Public Policy Institute had issued a report earlier in the week that criticized the state-backed project and called it a "$127 million taxpayer handout." Supporters said the report overstates the project's costs and ignores its potential to revitalize midtown Baltimore.

Mayor Stephanie Rawlings-Blake, Rep. Elijah E. Cummings, state Cabinet members and local legislators joined religious and community leaders to witness the signing of an "economic inclusion plan" for redevelopment of the deteriorating state government office complex.

Caroline Moore, chief executive of lead developer Ekistics LLC, said the agreement is designed to ensure that 50 percent of the jobs generated by the project's construction go to Maryland residents — with an emphasis on recruiting and training workers from the urban neighborhoods closest to the site.

The current State Center is an example of mid-20th-century urban renewal. To clear the way for it in the 1950s through the 1970s, neighborhoods were razed and replaced with a sprawling single-purpose government office complex where more than 3,000 civil servants work at over a dozen departments and smaller agencies.

The long-term development plan, which calls for a public-private partnership to remake the 28-acre government campus over 15 years as a mixed-use development that would include shops and residences, has been stalled by a lawsuit filed by downtown business leaders.

The plaintiffs contend that the State Center redevelopment project would compete unfairly with office buildings they own and was awarded to developers illegally through a noncompetitive process. State officials deny any lack of competition and contend that the administration of then-Gov. Robert L. Ehrlich Jr. made the right decision in 2005. The lawsuit is pending in Baltimore Circuit Court.

The project, which aims to bring new life to a part of the city that now empties out by 5 p.m., has won broad support from state and city government, transit advocates, environmentalists and neighborhood associations. But the institute's report contends that the projected benefits do not justify the public investment.

"Redevelopment of the state office complex is not an inherently unworthy goal, but advocates of the State Center project have touted far-off and highly uncertain benefits in order to make their case," the report says. "Our estimates reveal the true cost of the project to taxpayers, a cost that will only increase with additional phases of the project."

In a letter to the institute's president, Christopher Summers, two O'Malley administration officials called the report "grossly distorted and factually inaccurate," and urged that it be withdrawn.

"The MPPI's report's analysis overstates the cost of the project to the public while excluding all of the revenues and benefits that would be generated by the project," said Michael A. Gaines Sr., assistant secretary in the Department of General Services, and State Center project director Christopher Patusky.

Rawlings-Blake vowed to push forward "even if it means going against wealthy and powerful downtown interests. … It is time to stop suing and start doing."

Other project supporters questioned the report's funding and urged the Montgomery County-based institute to disclose its donors, suggesting that the study might have been funded by "financial interests opposed to State Center."

Summers denied any involvement by downtown business interests.

"That is completely unfair, and I find that an offensive accusation," Summers said, adding that his group does no contract research.

The Coalition to Save Downtown Baltimore, a group of businesses involved in the legal challenge, issued a statement saying that it is not connected to the report, which it called "damning."

The report contends that the state would have to provide $127 million in taxpayer subsidies for the first phase of the project. It says that subsidy would largely come in the form of above-market rent payments the state would make once it became a tenant rather than the owner of the buildings on the site.

But study co-author Gabriel Michael said the focus was primarily on the costs of the $200 million first phase and not on the eventual benefits being promoted by the project's backers. And he backed away from the harsh language in the report's title.

"My initial word was 'subsidy,' which I was comfortable with, he said. "If I were in charge of the editing, I wouldn't have called it a handout."

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