Kevin Plank’s pitch

Our view: The Un­der Ar­mour CEO has laid out his vi­sion for Port Covington; now is the time for him to an­swer the re­main­ing ques­tions and seal the deal

Baltimore Sun - - FROM PAGE ONE -

It’s about time we heard from Kevin Plank. Al­most pre­cisely six months after the Un­der Ar­mour founder and CEO’s de­vel­op­ment com­pany re­quested a jaw-drop­ping $535 mil­lion tax in­cre­ment fi­nanc­ing deal to fa­cil­i­tate a new city-within-a-city in Port Covington, and on the eve of word that a new com­mu­nity ben­e­fits agree­ment is to be an­nounced, Mr. Plank made his first ex­ten­sive pub­lic com­ments about the pro­posal in a full-page ad­ver­tise­ment in Wed­nes­day’s Sun. Weap­pre­ci­ate that, as he says in his open let­ter, he has a rather de­mand­ing day job, but a re­quest of this size is not just some­thing you del­e­gate. This project has clearly been his vi­sion from the start, and we needed to hear him make the case per­son­ally. The open let­ter doesn’t com­pletely cover what we need to hear from Mr. Plank — it would be help­ful for him to tes­tify be­fore the City Coun­cil as it con­sid­ers ap­prov­ing the deal and for him to en­gage in pub­lic di­a­logue with the project’s crit­ics, as James Rouse did in un­veil­ing his vi­sion for Har­bor­place a gen­er­a­tion ago. But it’s a good start.

Mr. Plank makes six points re­gard­ing the pro­posal, cov­er­ing many of the im­por­tant ques­tions the project raises. He an­swers some and leaves others.

In­vest­ment and jobs

“Port Covington will bring bil­lions of dol­lars in pri­vate in­vest­ment and thou­sands of jobs.” This is true; at full build-out, the pri­vate in­vest­ment (in­clud­ing land ac­qui­si­tion costs) is pro­jected to to­tal more than $4 bil­lion. State and fed­eral fund­ing for in­fra­struc­ture would to­tal $573 mil­lion, and the TIF would sup­port $535 mil­lion in work on streets, util­i­ties and parks (though the city or some pass-through en­tity would ac­tu­ally have to is­sue al­most $660 mil­lion in bonds be­cause of fi­nanc­ing costs). The firm that an­a­lyzed the TIF re­quest for the city es­ti­mated that over the decades-long scope of the project, it will di­rectly gen­er­ate 22,000 per­ma­nent jobs (though it’s un­clear how many of those are net-new­tothe city and how­manyamount­todis­place­ment of other eco­nomic ac­tiv­ity) and14,000 tem­po­rary jobs.

Mr. Plank says in his let­ter that Port Covington would be a new “front porch” for Bal­ti­more “seen by forty-two mil­lion cars a year pass­ing by on I-95,” a fact that also raises the ques­tion of whether those jobs will be much more ac­ces­si­ble to com­muters zoom­ing in to this iso­lated par­cel of the city on the high­way than they will be to city res­i­dents nav­i­gat­ing through the crowded streets of South Bal­ti­more or com­ing across the Hanover Street bridge. He par­tially ad­dresses that is­sue by not­ing his pro­posal for a new light rail spur into the de­vel­op­ment and his re­cent pur­chase of the city’s wa­ter taxi ser­vice, which he promises to up­grade to con­nect with the rest of the city, in­clud­ing West­port and Cherry Hill.

That’s good to hear, but a light rail spur is a long-term goal at best, as are pro­posed new pedes­trian and bike con­nec­tions to the penin­sula. Will Un­der Ar­mour or Sag­amore, Mr. Plank’s de­vel­op­ment com­pany, com­mit to job shut­tles from high­unem­ploy­ment neigh­bor­hoods in the mean­time?

Tax im­pacts

“The re­de­vel­op­ment is pro­jected to de­liver over a bil­lion dol­lars of net pos­i­tive tax rev­enue to the city in the com­ing years.” This is also true, de­pend­ing on your def­i­ni­tion of “com­ing years.” The TIF anal­y­sis projects that the de­vel­op­ment will pro­duce a cu­mu­la­tive net sur­plus of prop­erty taxes for the city of $1.1 bil­lion some­time in the mid-2050s. Of course, the de­vel­op­ment will also pro­duce ad­di­tional in­come, ho­tel, per­sonal prop­erty and other taxes, but also new costs to the city for po­lice and fire pro­tec­tion, schools, park main­te­nance and so on.

The city’s anal­y­sis an­tic­i­pates that Sag­amore will be on the hook for a to­tal of nearly $300 mil­lion in spe­cial taxes (on top of reg­u­lar prop­erty taxes) to cover debt pay­ments on the bonds for nearly all of the project’s first two decades. Is that sus­tain­able?

‘We also take on the risk’

Which brings us to Mr. Plank’s third point: Only prop­erty taxes from the project go to pay for the TIF, and the funds only go to in­fra­struc­ture, not to Sag­amore, Un­der Ar­mour or Mr. Plank. “We also take on the risk.” That’s true — to an ex­tent. The TIF bonds don’t pledge the city’s full faith and credit, and if the in­cre­men­tal prop­erty tax rev­enues gen­er­ated by the deal don’t suf­fice to meet the an­nual bond pay­ments, it is the de­vel­oper, not the city, who must make up the dif­fer­ence.

The city’s anal­y­sis pre­sents only one sce­nario for how this de­vel­op­ment un­folds, and that is pre­cisely ac­cord­ing to plan for 41 years. Even then, the ex­pec­ta­tion is that the de­vel­oper will be pay­ing spe­cial taxes for 18 con­sec­u­tive years. What if Sag­amore’s pro­jec­tions of the de­mand for res­i­den­tial, re­tail and of­fice space are too op­ti­mistic — or, worse yet, the real es­tate mar­ket col­lapses again? It’s not Un­der Ar­mour that’s back­ing this up or even Mr. Plank per­son­ally but Sag­amore. When Mr. Plank says, “We also take on the risk,” who is “we?” TIF deals some­times fail. What if this one does?

Mr. Plank also says that the money will “build pub­lic in­fra­struc­ture — streets, sew­ers, util­i­ties...” It also builds parks, prom­e­nades, a kayak launch and other items that do not ap­pear Un­der Ar­mour CEO Kevin Plank made his first ex­ten­sive com­ments on his pro­posed Port Covington de­vel­op­ment in a full­page ad in Wed­nes­day’s Sun. ab­so­lutely essen­tial. Mr. Plank needs to ex­plain why they be­long in the TIF.

‘Un­prece­dented com­mit­ments’

Sag­amore “is mak­ing un­prece­dented com­mit­ments to lo­cal hir­ing, in­clu­sion­ary hous­ing and op­por­tu­ni­ties for lo­cal mi­nor­ity — and women-owned com­pa­nies.” The in­clu­sion­ary hous­ing goals the com­pany and city ini­tially agreed to, in par­tic­u­lar, were unim­pres­sive, but the new deal ad­dress­ing those is­sues ap­pears to be sub­stan­tially bet­ter. It’s un­likely that ev­ery­one will be happy no mat­ter what the com­pany does, but we hope the de­tails of the agree­ment truly set a new stan­dard for how a big de­vel­op­ment project like this can cre­ate a more in­clu­sive city and spread op­por­tu­nity where it is truly needed.

Com­mu­nity ben­e­fits

There is lit­tle ques­tion that Mr. Plank is right in his fifth point, that Sag­amore has al­ready agreed to an un­prece­dented level of com­mu­nity ben­e­fit agree­ments to help sur­round­ing neigh­bor­hoods (and to some ex­tent, the city gen­er­ally) on pri­or­i­ties like “ed­u­ca­tion, recre­ation cen­ters, work­force de­vel­op­ment, pre­vail­ing wages, bet­ter streets, parks, play­grounds” and more. He pegs the to­tal at over $100 mil­lion, and the newa­gree­ment be­ing an­nounced will ap­par­ently in­crease that fig­ure markedly.

We com­mend that ef­fort and the com­pany’s will­ing­ness to en­gage with sur­round­ing com­mu­ni­ties to bring them on board in sup­port of the project. But it doesn’t re­ally al­ter the ba­sic ques­tions about whether the city is re­ally com­mit­ting only the min­i­mum­level of pub­lic sup­port needed to make this project hap­pen and whether tax­pay­ers are fully pro­tected.

A ma­jor lin­ger­ing is­sue Mr. Plank doesn’t men­tion is whether a TIF deal for a de­vel­op­ment of this size could lead to a re­duc­tion in state aid for Bal­ti­more schools. Leg­is­la­tors en­acted a tem­po­rary fix, but a per­ma­nent so­lu­tion needs to be hashed out by the new Com­mis­siononIn­no­va­tio­nandEx­cel­len­ceinE­d­u­ca­tion­head­edby for­mer Univer­sity Sys­te­mofMary­land­chan­cel­lor Wil­liam E. “Brit” Kir­wan and then ap­proved by the Gen­eral As­sem­bly and gover­nor. A re­cent let­ter from the House speaker and Se­nate pres­i­dent promis­ing a res­o­lu­tion to the is­sue is heart­en­ing, but a com­mit­ment by Mr. Plank to lobby in sup­port of a so­lu­tion would be ap­pro­pri­ate. If he shows up in An­napo­lis, leg­is­la­tors will line up to lis­ten.

Un­der Ar­mour’s fu­ture — and Bal­ti­more’s

“We can’t wait.” Mr. Plank’s sixth point hasn’t got­ten much at­ten­tion, but it is im­por­tant. Un­der Ar­mour is fast out­grow­ing its Tide Point of­fices and needs some­where to go. A few hun­dred work­ers are al­ready in Port Covington at the site of the old Sam’s Club, and Mr. Plank en­vi­sions a world-class cor­po­rate cam­pus there. “To­day there is no For­tune 500 com­pany that calls Bal­ti­more home ... yet,” Mr. Plank writes in a bit of well-earned chutz­pah. Whether — or, re­ally, when — Un­der Ar­mour achieves that dis­tinc­tion isn’t just a ques­tion for Mr. Plank’s ego but one that mat­ters for the city. Un­der Ar­mour may be the best thing Bal­ti­more’s got go­ing for it from a brand­ing stand­point. The more closely the city can be as­so­ci­ated with a com­pany of the fu­ture, the bet­ter, par­tic­u­larly when it comes to at­tract­ing tal­ent, fos­ter­ing an en­tre­pre­neur­ial cul­ture and cre­at­ing to­mor­row’s op­por­tu­ni­ties for ev­ery­one in this city.

Mr. Plank is right that the re­de­vel­op­ment pro­posal for Port Covington pre­sents a turn­ing point for Bal­ti­more. It is an op­por­tu­nity not just to lock in the city’s fastest-grow­ing com­pany for the fore­see­able fu­ture but also to show that a year after the post-Fred­die Gray un­rest, we have taken to heart the need to fos­ter pros­per­ity across the city and not just hope that it will trickle down from the wa­ter­front to the neigh­bor­hoods. Mr. Plank says his vi­sion is for “a strong in­clu­sive city known glob­ally as a hub of busi­ness, trade, en­trepreneur­ship, di­ver­sity, arts, cul­ture and im­por­tant Amer­i­can his­tory.” We be­lieve that’s pos­si­ble and that Port Covington can be an im­por­tant cat­a­lyst in mak­ing it a re­al­ity. Mr. Plank, it’s time for you to seal the deal.


Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.