State expands Baltimore enterprise zone eligibility

Program meant to spur jobs, investment in targeted areas

State officials have expanded Baltimore’s enterprise zone for the first time in a decade, bringing the total area eligible for benefits to 16,760 acres, including Pratt Street downtown, Port Covington, Locust Point, Highlandtown, Greektown and Bayview.

In addition, the map newly approved by the Maryland Commerce Department redesignates five city “Focus Areas,” that are eligible for additional benefits and adds a sixth, the South Industrial area.

The enterprise zone also was expanded in Cecil County.

The program, run by state and local governments, offers property and state income tax credits for businesses and developers that create jobs and make capital investments. The new zone is approved for the next 10 years.

Baltimore’s updated zone, which had been proposed by city officials, will increase by 3,271 acres from the existing zone designated in 2012. A quarter of the city had been in the zone under the expiring map.

“The Enterprise Zone program is one of the best tools we have in spurring job growth and investment in underutilized areas,” said Colin Tarbert, president and CEO of Baltimore Development Corp., the city’s economic development arm, in an announcement Thursday.

The new zone removes Harbor East, Harbor Point and commercial areas in Federal Hill and along Key Highway. Commerce officials said those areas no longer qualify for benefits because of significant growth in those census tracts.

Over the past decade, enterprise zones have cost the city of Baltimore about $180 million in lost tax revenue, according to a review of city records and budget projections. The state has refunded half that amount to the city.

The amount of property tax forgone each year grew from $5.3 million in fiscal year 2013 to $24 million in fiscal year 2018, but has since remained at about $20 million or more.

Developers and real estate brokers say the program has attracted business to the city and can generate more tax revenue over the long term. But others have raised concerns that developers and businesses, not neighborhood residents, have benefited.

Baltimore’s Focus Areas all have a mix of commercial, industrial, manufacturing and mixed-use businesses and include Jones Falls, Oldtown, Carroll-Camden, Central West and Holabird-Orangeville as well as the new South Industrial area.

City officials had proposed those areas with the goal of attracting new development.

The city had proposed including Pratt Street downtown because the area has struggled with the loss of businesses in the wake of the pandemic. Port Covington and Locust Point are in the midst of significant redevelopment, and city officials said those areas could benefit from the designations.

The Baltimore City Council had approved the city’s new Enterprise Zone map, proposed by the Baltimore Development Corp., without any discussion at an April 4 meeting.

Maryland Commerce Secretary Mike Gill touted the program as helping to transform many areas of Maryland, attracting investments and jobs in areas with the most need.

The renewal and expansion of the enterprise zone “gives our local partners an important tool to continue to stimulate growth and revitalization,” Gill said in Thursday’s announcement.

The expanded zone in Cecil County will help that jurisdiction as it continues to work to attract manufacturers and other employers and offer close-to-home job opportunities to county residents, officials said.

Cecil County’s zone will encompass 8,140 acres and include a number of parcels owned by Northrop Grumman, which will enable the company to continue expanding.

The aerospace and defense company plans to add more than 200 highly skilled jobs to support its new $110 million Hypersonics Center of Excellence, said Sandra Edwards, acting director of the county’s economic development office.

Businesses located in the state’s 34 enterprise zones received $46.2 million in property tax credits in fiscal year 2021 based on more than $3.7 billion in investments made that fiscal year.

The commerce department approves the state zones, while local governments administer them.