This article appeared in baltimojresun.com on Thursday, January 25, 2018.
Hogan's State Center report leaves one big question: What will happen to the 3,000 people who work there?
There’s a curious omission in the 103-page report on possible redevelopment of the State Center complex in Baltimore that Gov. Larry Hogan released this week — any mention whatsoever of the 3,000-plus state employees who work there and what might become of them. Sure, the governor touted the report’s conclusions about the potential for retail, offices, restaurants and a grocery store — though unimpressive versions of them all, if you actually read the report — and took some shots at the group of developers now in litigation with the state after Mr. Hogan and the other members of the Board of Public Works pulled the plug on a decade of efforts to remake the site. But about the state employees working in crumbling buildings whose needs started this whole conversation way back in the Ehrlich administration? Not a peep.
When asked about that, a spokesman for the governor reiterated Mr. Hogan’s pledge that the workers will remain in Baltimore. But there’s a big difference between keeping them somewhere in the city and using their presence to leverage a transformative project on what may be Baltimore’s most promising site for transit-oriented development. The study considers the commercial potential for a 28 acre site at the intersection of Howard Street and Martin Luther King Jr. Boulevard as if the buildings were vacant. It doesn’t consider at all the costs and drawbacks of moving the public employees elsewhere, whether it’s to a new building the state constructs or to existing office space somewhere else. And it most certainly does not consider whether, by pledging to keep them there, the state could drastically improve the market conditions and attract investment on a scale that would otherwise be untenable.
Without the state workers on site, here’s what the consultants who prepared the report for the Maryland Stadium Authority think State Center might be good for: fast food restaurants, a convenience store or gas station, a mid-rise building of doctor’s offices or perhaps senior care, a strip mall, an apartment building and a 25,000 square foot grocery store. Mr. Hogan says he’s really excited about that last one, but to put it in context, the Giant in Hampden is about twice that size and the Harris Teeter in Locust Point is nearly three times as big. The original State Center plan called for a 91,000 square foot showpiece grocery store in the Armory building.
What made the grander vision for State Center possible was a public-private partnership in which the state agreed to long-term leases of office space for its workers. That (along with some state and local tax breaks) made the project financially viable for the developer and also created a built-in market for higher quality retail and other amenities. The plan also had the benefit of having been shaped through years of community engagement by the developers and the state and enjoyed widespread support among the diverse neighborhoods that border the property.
Critics of the deal — many of whom were actually downtown property owners motivated by fear of competition from a redeveloped State Center and/or hopeful to land relocated state workers in their buildings — argued that the price the state agreed to pay for the leases was too high. Others questioned whether the deal would have been construed by bond rating agencies as pushing Maryland over its self-imposed debt limit. We believed that complication was surmountable and that the costs to the state were reasonable given the benefits, the price of inaction — the existing buildings are rapidly deteriorating and cost a fortune to maintain — and the lack of better options. Plus, walking away from the deal meant litigation over expenses the developers incurred over the years in a good faith effort to keep to the terms of a contract with the state. Just how much they are owed is subject of a dispute that has dragged on for more than a year with no sign of imminent resolution.
Governor Hogan is free to conclude that the original deal was bad for the state. He can rage against the developers for holding matters up in court. He can say the project was too grandiose and would never have worked. But none of that changes the fact that the basic concept of using the state’s presence to spur higher quality development is a sound one. The governor’s spokesman says he has not conclusively rejected that idea, but it sure doesn’t sound like he’s leaning toward it. Maybe Mr. Hogan will entice someone to save a government worker-free State Center site from being a giant black hole in the middle of the city by building some class-B offices, a McDonald’s, a Royal Farms and — dare to dream! — an Applebee’s. But it would be a tragic missed opportunity.