Free money raises doubts

Sides debate propriety of Balto. County’s loan forgiveness program

The transformation of a vacant, 12-story eyesore into a gleaming office building has brought workers, shoppers and diners to the northern edge of downtown Towson — thanks in part to a public financing package that waived repayment of millions of dollars in loans to a developer.

The county makes so-called conditional loans that do not require repayment if certain conditions, such as job creation, are met. The $3.5 million in conditional loans to Caves Valley Partners for the Towson project would rank as the largest ever forgiven; others have provided $300,000 to demolish vacant Pikesville buildings and $40,000 to renovate a bank branch in Randallstown.

While backers say such loans help spur development, some lawmakers and business owners are raising questions about the county government’s lending strategy because it lacks written guidelines and isn’t advertised, so few businesses know about it. Critics also say the loans are a waste of public funds and unfairly favor some businesses over others.

“I think it’s corporate welfare,” said state Sen. Jim Brochin, a Towson Democrat. He questioned the value of the Caves Valley deal for taxpayers as well as one for the renovation of the Greene Turtle restaurant in Towson. He said such loans amount to the government selecting which businesses should succeed.