A rendering of Exelon Corp.'s regional headquarters… (Rendering by Elkus Manfredi…)
Hours before introducing legislation Monday to the City Council that asks for more than $100 million in taxpayer assistance for a large waterfront development near Harbor East, Mayor Stephanie Rawlings-Blake released hard numbers to justify the financing deal.
Baltimore should issue $107 million in city bonds to pay for infrastructure needed for the $1 billion Harbor Point because the project, when finished, will generate 80 times the annual property taxes that the land produced before development began, according to the analysis Rawlings-Blake distributed.
Once built out, the 27-acre site also will support more than 9,000 permanent, new jobs in Baltimore, the analysis showed.
"Like the Inner Harbor revitalization effort of 30 years ago, the Harbor Point project represents a once-in-a-generation opportunity to grow Baltimore by attracting new jobs, new residents, new tax revenue, and new public amenities," Rawlings-Blake said in a statement.
The legislation Rawlings-Blake introduced Monday, which would enable the city to issue tax increment financing bonds to pay for roads and other infrastructure projects at Harbor Point, already faces heated opposition. Councilman Carl Stokes, who heads the council's taxation committee, said the bond request is motivated by developers' "greed" and questioned the reliability of the projections.
The former site of the AlliedSignal chromium plant, the Harbor Point peninsula is largely vacant now and has little public infrastructure.
A 23-story office tower for the utility company Exelon will be erected on the site beginning this summer. Over the next 12 years, the Rawlings-Blake administration said, roughly 9 acres of public green space will be added, as will a half-dozen other buildings for residences, retail and commercial use. Developer Michael S. Beatty's Harbor Point Development Group LLC is leading the project.
Before development began at Harbor Point, Rawlings-Blake's office stated, the city collected about $244,000 per year in property tax revenue from the site, valued at about $11 million.
After the development is completed, the property will be worth $1.8 billon and the city will collect — after subtracting payments for city services and the amount used to make payments on the TIF bonds — an average of $19.6 million a year in property taxes, according to the Rawlings-Blake administration.
The city's revenue from other taxes, including hotel and income taxes, also would increase, according to the administration. In all, the city estimates the finished Harbor Point development will bring in more than $1 billion in new tax revenue over 30 years.
In addition, the Rawlings-Blake administration touted the thousands of new jobs the development will create. An estimated 7,200 construction jobs would be created by Harbor Point, and roughly 9,200 jobs will be supported by the businesses that move onto the site, the administration said.
The mayor's office also expects hundreds of people to move to Baltimore because of the Harbor Point development and that the city could earn additional funds through a profit-sharing agreement with the developer.
The tax revenue and job numbers Rawlings-Blake cited are from a report by MuniCap Inc., a Columbia-based public finance consulting firm, which examined the economics of the proposed TIF legislation for the city.
Stokes, who believes Harbor Point infrastructure should be paid for out of the city's annual budget over a number of years, is unwilling to accept Rawlings-Blake's numbers as fact. It's difficult to predict job creation and tax revenue numbers decades in advance, he said.
"We're talking 30 years down the line," Stokes said.
He'd like to get a second opinion on the projections, but that's tough to do because the Baltimore Development Corp. and the mayor's office are withholding the full financial details of the deal, he said.
"We don't know what we're buying here," he said.
If the development at Harbor Point cannot be built without the TIF, Stokes said, then the Exelon tower and other structures should be built on the city's many available sites where infrastructure already is in place.
The Rawlings-Blake administration says city, state and federal budget constraints make TIF bonds for Harbor Point a necessity. There simply isn't the money, without cutting back on city services, to build public infrastructure at Harbor Point without issuing bonds, the administration said.
The former industrial site is especially costly to build on because of a cap that was put in place to prevent chromium contamination from spreading. The site has to be built up an average of 10 feet above the existing grade before anything can be constructed, the administration said.
Under TIF deals, the city issues bonds to pay for property acquisitions, infrastructure improvements and other project costs, then uses the increased tax revenue created by the development to pay off the bonds. The city has approved their use for other projects. If property tax revenue from the development is inadequate to repay the bonds, the developer would be responsible for the difference.
The TIF funds for Harbor Point would be used for street and pier improvements, the public parks, a promenade and a bridge extending Central Avenue onto the peninsula. A small portion, $2 million, would be contributed to the Crossroads School, a nearby charter academy, according to the legislation.
"I'm confident that we will be able to look back at this project together and know that it has made Baltimore better and stronger," Rawlings-Blake said.
Baltimore Sun reporter Luke Broadwater contributed to this article.