Coun­cil ad­vances Port Cov­ing­ton deal

Fi­nal vote on pub­lic fi­nanc­ing, com­mu­nity ben­e­fits likely next week

Baltimore Sun - - FRONT PAGE - By Luke Broad­wa­ter

The Bal­ti­more City Coun­cil voted Mon­day to ad­vance a $660 mil­lion pub­lic fi­nanc­ing pack­age for Un­der Ar­mour CEO Kevin Plank’s mas­sive Port Cov­ing­ton project — one of the most hotly de­bated is­sues the law­mak­ers have faced in years.

The 12-0 de­ci­sion came af­ter 11 of 15 coun­cil mem­bers signed a pe­ti­tion to force a pre­lim­i­nary vote on the deal, by­pass­ing a com­mit­tee where ne­c­es­sary leg­is­la­tion stalled last week.

“The feel­ing among the en­tire group is we’re ready for the project to move for­ward,” said Coun­cil­man Eric T. Costello, who led the pe­ti­tion ef­fort. “We’ve had am­ple amount of time to re­view the mer­its of the project. We’ve reached a great deal for the city.”

The coun­cil is ex­pected to take a fi­nal vote next week. If it again voted in fa­vor of the pro­posal, leg­is­la­tion would go to Mayor Stephanie Rawl­ings-Blake’s desk. She is ex­pected to sign off on the deal.

“We are hum­bled by the over­whelm­ing sup­port and ex­cite­ment for Port Cov­ing­ton,” said Marc Weller, pres­i­dent of

“We’ve had am­ple ... time to re­view the mer­its of the project. We’ve reached a great deal for the city.” Coun­cil­man Eric T. Costello

Plank’s Sag­amore De­vel­op­ment Corp. “Bal­ti­more and its lead­ers are ready for the tens of thou­sands of jobs and tremen­dous eco­nomic im­pact that will come from Port Cov­ing­ton.”

The vote came as the Bal­ti­more De­vel­op­ment Corp. for the first time pub­licly de­tailed the city’s profit-shar­ing agree­ment with Sag­amore.

If the Port Cov­ing­ton de­vel­op­ment reaps a profit greater than 15 per­cent, the city will get 25 per­cent of any ad­di­tional profit. By com­par­i­son, a profit-shar­ing agree­ment with the de­vel­oper of Har­bor Point doesn’t kick in un­less that de­vel­op­ment’s profit ex­ceeds 20 per­cent.

“We sat down with the de­vel­oper and we ended up with ex­cep­tion­ally fa­vor­able terms for the city on profit-shar­ing,” said BDC Pres­i­dent William H. “Bill” Cole IV. “If they were to sell the prop­erty at a mas­sive profit, we will en­joy in that as well.”

Sag­amore has pro­posed a $5.5 bil­lion mixed-use water­front de­vel­op­ment that would in­clude a new head­quar­ters for Un­der Ar­mour, restau­rants, shops, hous­ing and man­u­fac­tur­ing space, among other fea­tures. The land in­cludes the site of The Bal­ti­more Sun’s print­ing plant, for which the news­pa­per has a long-term lease.

Sag­amore has asked the city to float $660 mil­lion in bonds to build in­fra­struc­ture for the project. The de­vel­oper would have to pay back the bonds through fu­ture taxes.

“What we got out of this Port Cov­ing­ton project is un­prece­dented,” said City Coun­cil Pres­i­dent Bernard C. “Jack” Young. “The coun­cil made the right de­ci­sion to move this bill for­ward. I’m look­ing for­ward to work­ing with Sag­amore to make sure they do ev­ery­thing they agreed to.”

Ear­lier Mon­day, a coali­tion of faith- based and com­mu­nity groups held a news con­fer­ence in East Bal­ti­more to urge the coun­cil to vote in fa­vor of the deal.

The groups — Bal­ti­more­ans United in Lead­er­ship De­vel­op­ment, the In­ter­de­nom­i­na­tional Min­is­te­rial Al­liance, the Pro­gres­sive Bap­tist Con­ven­tion of Mary­land and six neigh­bor­hood as­so­ci­a­tions rep­re­sent­ing com­mu­ni­ties near Port Cov­ing­ton — said a $100 mil­lion com­mu­nity ben­e­fits “I to­tally sup­port the Port Cov­ing­ton project,” says Coun­cil­man Carl Stokes, who abruptly ended a com­mit­tee vote on the deal last week. agree­ment ne­go­ti­ated with the de­vel­oper is too good to pass up.

“We can not al­low a his­toric deal to be held hostage to chang­ing de­mands,” said the Rev. Glenna Hu­ber, co-chair­woman of BUILD.

The bonds for Plank’s de­vel­op­ment were ex­pected to ad­vance last week out of the coun­cil’s Tax­a­tion, Fi­nance and Eco­nomic De­vel­op­ment Com­mit­tee, chaired by Coun­cil­man Carl Stokes. But Stokes un­ex­pect­edly stopped short of ap­prov­ing the deal Thurs­day night. Af­ter the panel voted in fa­vor of two of three ne­c­es­sary bills, Stokes abruptly called the meet­ing to a close with­out ex­pla­na­tion.

Stokes later told re­porters he was con­cerned that the pub­lic had not had time to thor­oughly re­view the $100 mil­lion deal Sag­amore made with the city. The agree­ment had been an­nounced hours ear­lier.

Stokes also ex­pressed con­cern about pro­jec­tions that show the project would cause city schools to lose mil­lions of dol­lars in state fund­ing.

As a re­sult, 11 of 15 coun­cil mem­bers signed a pe­ti­tion cir­cu­lated by Costello to draft the bill out of com­mit­tee. Those sign­ing the pe­ti­tion were coun­cil mem­bers James Kraft, Bran­don Scott, Robert W. Cur­ran, Rochelle “Rikki” Spec­tor, Sharon Green Mid­dle­ton, Nick J. Mosby, Helen Holton, William “Pete” Welch, Ed Reisinger, Costello and Young.

On Mon­day, Stokes called a news con­fer­ence to pledge his full sup­port for the project — say­ing he would vote “yes” to all three bills.

“I to­tally sup­port the Port Cov­ing­ton project,” he said. “I’ve said that from day one. I say that to­day.”

Stokes said he re­cently met with Plank, and Plank pledged he would fol­low the spirit of an agree­ment with the city that the de­vel­op­ment would be in­clu­sive, ben­e­fit­ing all races and in­come lev­els.

“I take him at his word,” Stokes said. “I be­lieve him.”

But Stokes said he be­lieved other coun­cil mem­bers “dis­re­spected” the com­mit­tee process by by­pass­ing his panel — a move he said “flies in the face of good or­der and rule of law.”

Sag­amore, the Rawl­ings-Blake ad­min­is­tra­tion, key City Coun­cil mem­bers and BUILD — which had op­posed the project — spent weeks ne­go­ti­at­ing the com­mu­nity ben­e­fits deal, thought to be key in win­ning the coun­cil’s ap­proval of the Port Cov­ing­ton project.

The $100 mil­lion deal builds off a $39 mil­lion agree­ment be­tween the de­vel­oper and six neigh­bor­hoods near the project. That agree­ment in­cludes $25 mil­lion to train work­ers at a new Port Cov­ing­ton train­ing cen­ter and $10 mil­lion for no-in­ter­est loans or other fund­ing streams for mi­nor­ity- or women-owned startup busi­nesses.

The devel­op­ers also agreed to hire at least 30 per­cent of all in­fra­struc­ture con­struc­tion work­ers from Bal­ti­more, pay a min­i­mum wage of at least $17.48 an hour, and set aside 20 per­cent of hous­ing units for poor and mid­dle-class fam­i­lies — though 40 per­cent of such hous­ing may be built else­where in the city.

Crit­ics con­tend the agree­ment on af­ford­able hous­ing is too weak, re­quir­ing just 10 per­cent of Port Cov­ing­ton’s af­ford­able hous­ing units be built for peo­ple who make less than $26,000, and con­tains what they call a “loop­hole” that al­lows the de­vel­oper to pay money into an in­clu­sion­ary hous­ing fund in­stead of build­ing the units.

Stokes said he be­lieves his com­mit­tee should get credit for driv­ing a harder deal with the de­vel­op­ment team than past law­mak­ers have.

“This com­mit­tee has moved the ball so far down the field it’s amaz­ing,” Stokes said. “Prior to this par­tic­u­lar com­mit­tee do­ing its job, we have just given away the tax­payer dol­lars with­out out any re­turn to the tax­pay­ers. That changed dra­mat­i­cally.”

De­spite wide­spread sup­port on the City Coun­cil, some ad­vo­cacy groups ar­gue that the Port Cov­ing­ton deal isn’t good enough.

The Amer­i­can Civil Lib­er­ties Union says it is wor­ried an agree­ment with Sag­amore doesn’t do enough to pro­tect the city’s schools, which are pro­jected to lose state fund­ing when the project is built.

Over the past two years, Bal­ti­more’s econ­omy has been grow­ing faster than that of any other ju­ris­dic­tion in Mary­land, thanks in part to a wide ar­ray of tax sub­si­dies used to spur de­vel­op­ment.

That growth has con­trib­uted to Bal­ti­more schools los­ing $50 mil­lion in state fund­ing over the past two years un­der a for­mula that gives out more money to poorer school sys­tems.

Un­der the terms of the var­i­ous tax breaks and spe­cial deals, some of Bal­ti­more’s most valu­able prop­er­ties pay lit­tle or no taxes to the city’s gen­eral fund. So they im­prove the econ­omy, caus­ing the state for­mula to de­liver less school aid, but they don’t con­trib­ute enough rev­enue to the city to re­place the lost fund­ing.

Lead­ers of the Gen­eral Assem­bly have promised Bal­ti­more of­fi­cials that they will en­act a longterm fix to the for­mula, pre­vent­ing any loss in state aid for schools.

But Frank Patinella, co-chair of the Bal­ti­more Ed­u­ca­tion Coali­tion, said he and other ad­vo­cates want the city to agree to cover any losses suf­fered by Bal­ti­more schools as a re­sult of the deal.

”The City Coun­cil ought to af­firm its com­mit­ment to fill in any fund­ing loss to City Schools, since it is not yet known if the State will fully ex­empt City Schools from any re­duc­tion in state fund­ing,” he said.

Pro­po­nents say the city­wide ben­e­fits agree­ment ad­dresses this con­cern. It states that the de­vel­oper will not re­quest any bonds be is­sued “if there is a pro­jected neg­a­tive im­pact on State ed­u­ca­tion fund­ing for Bal­ti­more City Schools.”

Coun­cil­man War­ren Branch was one of three coun­cil mem­bers who ab­stained from the vote.

Branch was ad­vo­cat­ing on be­half of the Berea East­side Neigh­bor­hood As­so­ci­a­tion — one of the largest com­mu­nity groups in his dis­trict — which wanted Sag­amore to pro­vide mil­lions of dol­lars for a pro­gram that re­habs blighted houses, then re­sells them as af­ford­able homes in McElderry Park, Mid­dle East, Be­lair-Edi­son and other East Bal­ti­more neigh­bor­hoods.

“I have one of the most im­pov­er­ished dis­tricts,” said Branch, who lost his bid for re-election in April’s Demo­cratic pri­mary. “They’re my con­stituents. I thought we were sup­posed to be work­ing for the con­stituents in our dis­tricts. We’re not sup­posed to be sup­port­ing big business.”

Coun­cil mem­bers Bill Henry and Mary Pat Clarke also ab­stained.

Clarke did not vote af­ter at­tempt­ing to amend the bill to re­quire that con­struc­tion work­ers be paid “pre­vail­ing wages.”

Young did not al­low Clarke’s amend­ments to be con­sid­ered. He said they were filed im­prop­erly and that Clarke was “out of or­der.”

LLOYD FOX/BAL­TI­MORE SUN

LLOYD FOX/BAL­TI­MORE SUN

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