Vote on tax breaks for arena shows delayed

City Finance Department, mayor, economists raised questions about proposal

Critics say the plan would let big-name acts sell tickets tax-free, costing the city millions in revenue.

Baltimore City Council President Bernard C. “Jack” Young is delaying the final vote on his proposal to give a tax break for major concerts and comedy shows at Royal Farms Arena.

A spokesman for Young said Wednesday that the council president had heard concerns from constituents and will postpone the vote to allow time for more research and community input.

“More discussion is always good,” spokesman Lester Davis said.

The council voted 13-1 Monday to give preliminary approval to legislation sponsored by Young that would exempt some performances at the venue from the city’s 10 percent admissions and amusement tax. Gross ticket sales for a single event would have to exceed $500,000 to qualify.

Backers say large crowds at the arena boost the city’s economy and produce revenue in the form of taxes on restaurant and hotel bills. They also note that the aging city-owned arena faces stiff competition for major events.

But the city Finance Department and economists say the legislation would allow acts such as Justin Bieber, Rihanna and Garth Brooks to sell concert tickets tax-free — costing Baltimore millions of dollars in revenue.

The city’s Board of Estimates was expected to issue a recommendation on the bill Wednesday, but deferred at Young’s request.

Mayor Stephanie Rawlings-Blake, who controls the panel, said she had concerns about the legislation.

“I’m not convinced that the proposed tax break makes sense,” she said. She noted the arena’s success in attracting performers such as Janet Jackson and Maroon 5. “We’ve got a bunch of great acts that are coming.”

The city has looked for sites and developers to build a new arena for more than two decades. In 2008, four developers responded to a request for proposals, but lack of financing doomed the effort.

More recently, construction magnate Willard Hackerman, who led the Whiting Turner Contracting Co., offered to find private financing for an 18,500-seat arena and hotel on the site of his Sheraton Inner Harbor Hotel, linked to an expanded, publicly funded convention center.

That proposal, put forward by the Greater Baltimore Committee, was estimated to cost $900 million, but it stalled after Hackerman died in 2014.

Last year, two of Baltimore’s most prominent developers, David Cordish and the Paterakis family, proposed a 15,000-seat arena on Piers 5 and 6 in the Inner Harbor.

The $450 million proposal would transform the waterfront between the Cordish Co.’s Power Plant Live and Harbor East, developed by the Paterakis family.

Baltimore officials also have discussed rebuilding on the Royal Farms Arena site. Several traveled to Providence, R.I., to look at the arena renovation there.

Rawlings-Blake said Baltimore officials are still considering options.

“I was intrigued by the Hackerman proposal, but it never materialized,” she said.

She said she wants to make sure the arena stays “competitive without having too much blackout time.”