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State, U.S. mil­lions needed to add to city’s Port Cov­ing­ton bonds

Baltimore Sun - - FRONT PAGE - By Luke Broad­wa­ter

Kevin Plank’s plan to re­make Port Cov­ing­ton took a big step for­ward when the City Coun­cil ap­proved $660 mil­lion in pub­lic fi­nanc­ing for the project, but the Un­der Ar­mour CEO still needs mil­lions in state and fed­eral fund­ing to make his dream a re­al­ity.

Plank’s Sag­amore De­vel­op­ment Co. is now at­tempt­ing to win ap­proval of about $350 mil­lion in state fund­ing and $225 mil­lion in fed­eral fund­ing. The de­vel­oper also needs to per­suade var­i­ous agen­cies to sign off on per­mits for Plank’s am­bi­tious plan to turn the mostly in­dus­trial South Bal­ti­more penin­sula into a $5.5 bil­lion mixed-used de­vel­op­ment, in­clud­ing a new head­quar­ters cam­pus for Un­der Ar­mour.

“We’ve al­ways an­tic­i­pated there would need to be sig­nif­i­cant state and fed­eral money re­quired to make this project a re­al­ity,” said Wil­liam H. Cole IV, pres­i­dent of the Bal­ti­more De­vel­op­ment Corp., the city’s de­vel­op­ment arm. “You’ve got to put cer­tain pieces to­gether to un­lock the next piece.

“The city’s com­mit­ment sends a mes­sage to the state and fed­eral part­ners that I hope

“The city’s com­mit­ment sends a mes­sage to the state and fed­eral part­ners that I hope will un­lock state and fed­eral funds.” Wil­liam H. Cole IV, pres­i­dent of the Bal­ti­more De­vel­op­ment Corp.

will un­lock state and fed­eral funds.”

State of­fi­cials lost out this year on a bid for $76 mil­lion fed­eral grant for an In­ter­state 95 in­ter­change project and rail­way im­prove­ments in the area meant to spur re­de­vel­op­ment at the 160-acre Port Cov­ing­ton site. State of­fi­cials al­ready com­mit­ted $33 mil­lion to that ef­fort.

Sag­amore Pres­i­dent Marc Weller said the city’s ap­proval of the tax in­cre­ment fi­nanc­ing deal will help with an­other try at the fed­eral funds, be­cause the project is “sig­nif­i­cantly fur­ther along in its readi­ness.”

Sag­amore also is seek­ing fund­ing from an­other U.S. Depart­ment of Trans­porta­tion grant pro­gram, the Fed­eral Tran­sit Ad­min­is­tra­tion’s “small start” grant pro­gram and from bonds is­sued by the Mary­land Trans­porta­tion Author­ity.

The de­vel­op­ers hope to use the “small start” grants to help fund a pro­posed $165 mil­lion light rail ex­ten­sion from West­port to Port Cov­ing­ton.

Cole said the light rail ex­ten­sion will be key to mak­ing sure Bal­ti­more­ans can get to the jobs that Plank’s de­vel­op­ment will of­fer. City of­fi­cials say the Port Cov­ing­ton de­vel­op­ment, once com­plete, is pro­jected to cre­ate 26,500 per­ma­nent jobs.

“The trans­porta­tion pieces are truly im­por­tant to mak­ing this project ben­e­fit the en­tire city,” Cole said. “We know Bal­ti­more residents have a tough time get­ting from their homes to jobs.”

Mean­while, Mayor Stephanie Rawl­ingsBlake plans to sign leg­is­la­tion au­tho­riz­ing the bond is­suance next week. After she does so, the city’s Board of Fi­nance is ex­pected to ap­prove the first of what’s pro­jected to be five rounds of bonds is­sued over the next 40 years.

About $535 mil­lion of the $660 mil­lion in bonds will go to in­fra­struc­ture such as roads, parks and sewer and wa­ter lines in Port Cov­ing­ton. The bal­ance goes to a re­serve fund and other costs as­so­ci­ated with the bond sales. The bonds will be re­paid through fu­ture tax rev­enues cre­ated by the project.

The first se­ries of bonds is slated to amount to $64.3 mil­lion. About $19.6 mil­lion of that will go to­ward build­ing an East Wa­ter­front Park that will “pro­vide pub­lic ac­cess to the wa­ter­front and con­trib­ute to the eco­log­i­cal up­lift of the Mid­dle Branch,” Weller said.

The park will sit be­tween the Sag­amore Spirit site — Plank’s new rye whiskey dis­tillery — and the wa­ter’s edge on the Pat­ap­sco River. It will in­clude pub­lic light­ing, side­walks, landscaping and wa­ter­front paths, com­pany of­fi­cials said. The work also will in­clude im­prove­ments to the shore­line to pro­tect ero­sion and ad­dress en­vi­ron­men­tal con­cerns.

The de­vel­op­ers ex­pect to use the re­main­ing money to build an $18.6 mil­lion pub­lic plaza and lake and $26 mil­lion to build a so-called “ar­chae­o­log­i­cal pier.”

The pub­lic plaza will be open space north of Un­der Ar­mour’s ex­panded head­quar­ters that will in­clude a newly con­structed hy­dro­ther­mal lake and ve­hi­cle bridge. The ar­chae­o­log­i­cal pier will trans­form the re­mains of a con­crete pier to ac­com­mo­date wa­ter taxis and kayak land­ings.

Dru Sch­midt-Perkins, di­rec­tor of the pro-en­vi­ron­ment group 1000 Friends of Mary­land, said the de­vel­op­ment of­fers a big op­por­tu­nity to im­prove the Mid­dle Branch, which is of­ten filled with trash. But she said Sag­amore should make sure it is truly ac­ces­si­ble to the pub­lic, and not just cor­po­rate ex­ec­u­tives.

“It does open up swaths of the city to the pub­lic, par­tic­u­larly the wa­ter­front,” Sch­midt-Perkins said. “By putting in these won­der­ful com­mu­nity as­sets, it does give peo­ple a new place to go walk, hike and en­joy the wa­ter. ... The de­tails will re­ally mat­ter. This could turn out re­ally well or it could be a lot of lip ser­vice.”

As part of the city’s deal with Sag­amore, Comptroller Joan Pratt will as­sign a full-time au­di­tor — paid for by the com­pany — to make sure the firm is liv­ing up to its prom­ises, in­clud­ing hir­ing at least 30 per­cent of con­struc­tion work­ers from Bal­ti­more and pay­ing them a wage of at least $17.48 per hour.

The de­vel­op­ers will need to ob­tain a bat­tery of lo­cal, state and fed­eral ap­provals, in­clud­ing from the Army Corps of Engi­neers and Mary­land Depart­ment of the En­vi­ron­ment on Sag­amore’s wa­ter­front pro­pos­als; the Fed­eral High­way Ad­min­is­tra­tion and Mary­land Depart­ment of Trans­porta­tion on high­way im­prove­ment projects; the Fed­eral Tran­sit Ad­min­is­tra­tion and Mary­land Trans­porta­tion Ad­min­is­tra­tion on the pro­posed light rail ex­ten­sion into Port Cov­ing­ton; and con­gres­sional and Coast Guard ap­proval to de­clare a por­tion of the Mid­dle Branch non-nav­i­ga­ble to cre­ate what Sag­amore pro­poses as a “calm, recre­ational wa­ter­front ac­ces­si­ble to all of Bal­ti­more.”

If Sag­amore fails to win fed­eral and state fund­ing or per­mits, Bal­ti­more of­fi­cials would be re­luc­tant to award a sec­ond round of bonds, Cole said. That said, Cole be­lieves a $100 mil­lion com­mu­nity ben­e­fits agree­ment signed by the de­vel­oper will make the project more at­trac­tive to fed­eral of­fi­cials.

The city­wide ben­e­fits agree­ment builds off a $39 mil­lion agree­ment be­tween the de­vel­oper and six neigh­bor­hoods near the project. It 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.

“Any time you’re seek­ing fed­eral funds, it’s com­pet­i­tive, but the project it­self is very com­pelling,” Cole said. “There are very strong com­mit­ments to in­clu­sion and lo­cal job growth. That will be very help­ful to them as they seek ad­di­tional fund­ing sources. Ev­ery­thing they’ve done to date helps make a stronger case for these var­i­ous fed­eral pro­grams.”

Sha­reese DeLeaver-Churchill, a spokes­woman for Gov. Larry Ho­gan, said state of­fi­cials and Sag­amore have been dis­cussing how best to move for­ward with ob­tain­ing fed­eral funds.

“The ad­min­is­tra­tion re­mains a strong ad­vo­cate for re­de­vel­op­ment in Bal­ti­more City, in­clud­ing the trans­for­ma­tional Port Cov­ing­ton project,” she said. “The ad­min­is­tra­tion will sup­port this and all ini­tia­tives that put peo­ple back to work, pro­mote eco­nomic de­vel­op­ment, and have the po­ten­tial to af­fect real change in Bal­ti­more City.”

Lawrence Brown, as­sis­tant pro­fes­sor at Mor­gan State’s School of Com­mu­nity Health and Pol­icy, wrote on Face­book that city of­fi­cials should have “called Plank’s bluff” and de­manded more com­mu­nity ben­e­fits in the Port Cov­ing­ton ne­go­ti­a­tions, in­clud­ing bet­ter wages for work­ers and more af­ford­able hous­ing for the poor.

He pre­dicted state and fed­eral of­fi­cials would pro­vide fund­ing for the project, but ar­gued it is likely to in­crease — not lessen — racial and eco­nomic se­gre­ga­tion in Bal­ti­more. For in­stance, Ho­gan’s de­ci­sion to kill the pro­posed Red Line light rail con­nect­ing East and West Bal­ti­more will mean that some of the city’s poor­est neigh­bor­hoods won’t be con­nected to the sys­tem if it ex­pands to Port Cov­ing­ton.

“One of the big­gest is­sues is peo­ple in East and West Bal­ti­more don’t have con­nec­tions to get to jobs,” Brown said.

The Sag­amore bonds rep­re­sent the largest tax-in­cre­ment-fi­nanc­ing deal in the city’s his­tory, and among the largest in the coun­try. The de­vel­op­ment also is in line to re­ceive $760 mil­lion in var­i­ous tax cred­its by virtue of build­ing in an area state of­fi­cials con­sider im­pov­er­ished. The land in­cludes the site of The Bal­ti­more Sun’s print­ing press. The Sun has a long-term lease on the prop­erty.

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