Baltimore City Council has called a temporary time-out from the complicated web of issues surrounding Sagamore Development’s $535 million Port Covington TIF (Tax Increment Finance) proposal ($660 million including interest and fees). The temperature inside the War Memorial Building rose as high as the record breaking heatwave outdoors during a recent work meeting held by City Council’s Taxation, Finance and Economic Development Committee to craft legislation establishing what will be, Maryland’s largest TIF, supporting infrastructure for the $5.5-billion-dollar Port Covington Project, if passed.

Port Covington Pro-piece Edit D1

A rendering of the planned Port Covington development. (Sagamore Development)

City Councilman Carl Stokes postponed a scheduled third work session on the Port Covington proposal until after Labor Day.  Judging from the “heat” inside the War Memorial Building recently, it seems that City Council members needed a little more time to work out some of the contentious issues surrounding the proposal such as affordable housing, commitment to local hiring, and related issues. Stokes said that he wants to ensure that the Port Covington TIF proposal doesn’t create “a segregated community paid for with public funds.”

So now is a good time to step back to see the big picture and then fast-forward to see how City Council is seeking to fill the gaps in legislation that created a public firestorm inside the Tax, Finance and Economic Development Committee.

The Baltimore Development Corporation – First stop for vetting Baltimore’s TIF’s    

Long before Port Covington became a household word in Baltimore, Sagamore Development’s first stop was with the Baltimore Development Corporation (BDC), a public/private sector non-profit entity contracted out by the City to promote economic development.  Sagamore Development approached BDC in 2015 to start conversations about a major TIF to support their Port Covington Project, according to BDC meeting minutes.

“We’ve spent months and months analyzing this TIF and we’re confident that this is a project worthy of consideration and ultimately approval by the City Council,” said Bill Cole, President and CEO of the Baltimore Development Corporation. The BDC conducted financial analysis of the plan and vetted the Sagamore Development TIF proposal utilizing existing city law as their guide.

Cole adamantly insisted that he and his board were careful to ensure that the Port Covington TIF would not backfire on Baltimore’s public schools.  “Our board made it clear that we would not be supportive of moving this forward if this (TIF) had a negative impact on school funding” he said. “We now have a letter directly from the Speaker of the (Maryland) House of (Delegates) and the President of the (Maryland State) Senate; and certainly the efforts of the Chairperson of the (Maryland State Senate) Appropriations Committee stating on record that they will be fighting to fix this formula so as not to impair Baltimore’s ability to do economic development projects,” Cole said.

Based on current Maryland State appropriations, as the overall tax revenue for the city increases, the funding available to the city’s public schools from the State of Maryland would decrease leaving a gap in funding that would disproportionately hurt the city’s most vulnerable children, according to community groups like BUILD, who currently oppose the Port Covington TIF.

But What about Affordable Housing and Port Covington?

With a goal of developing more than 7000 residential dwellings as part of the multi-billion-dollar development deal, Port Covington TIF opponents and several city council members have been sharply critical of the project’s tepid commitment to affordable housing units. “I know a lot of the discussion about Port Covington is about the current shortcomings of the City’s inclusionary housing law. I’m not in a position to fix or address that. We can only ensure that the project itself complies with current law – and it does,” Cole said.

But City Councilman Bill Henry (District 4) said that a “fix” is on the way. “One of the reasons I am trying to fix the City’s existing inclusionary housing law now – rather than waiting for the next term – is so that we can establish a minimum in the law for how much inclusionary housing Port Covington will need to provide, “said Councilman Henry.

Henry recently introduced legislation before the City Council requiring development projects that include housing, like the Port Covington project, meet a 10% minimum Affordable Housing Unit threshold based on 60% of the Area Median Income. Baltimore’s Median income in 2014 (latest year data was available) was a little more than40,000 according to the American Community Survey.

Currently, Sagamore Development Corporation has signed an MOU with the City of Baltimore to include 10% of affordable housing units in their proposed 7000 residential housing complex. “An agreement won’t be as strong as having the law applied, that was one of the arguments for trying to get this fixed to the inclusionary housing law now rather than wait until the next term, Henry told the Afro. “

As long as the inclusionary housing legislation goes into effect before they start building housing at Port Covington it will apply to them,” said Henry.