Mayor approves tax breaks for State Center project

The following article first appeared in the Baltimore Sun on Feb 4, 2015:

If the long-delayed $1.5 billion redevelopment project at State Center ever gets built, Baltimore has tax breaks waiting for it.

The city's Board of Estimates, which is controlled by Mayor Stephanie Rawlings-Blake, authorized Wednesday a 20-year payment in lieu of taxes deal for the project, which now generates no city tax revenue but could contribute millions of dollars if the tract is redeveloped.

The board voted 4-0 in favor of the deal. Comptroller Joan M. Pratt abstained.

Under the deal, the city would receive about $1.7 million a year after the first phase of the project is built — about $1 million less than it would pay under current tax rates. The Baltimore Development Corp. estimates the project's first phase would be valued at about $125 million, which would be subject to about $2.8 million in annual taxes had the city not authorized the break.

"We're doing everything we can to put together the foundation pieces to be able to move forward," said Rawlings-Blake, a Democrat. "This is something that is very important to the community. It has the potential to be a real catalyst for economic development."

The move comes as the future of the 28-acre redevelopment remains in doubt. The state's Board of Public Works has yet to vote on a plan that would reduce the size of a planned parking garage to keep it within the roughly $28 million budget, leaving the decision to the new administration of Gov. Larry Hogan, a Republican.

Hogan has been noncommittal about the project, which was conceived under the administration of Republican Gov. Robert L. Ehrlich Jr. and supported by Gov. Martin O'Malley, a Democrat.

If the project moves forward with state approval, it would include 2,000 residential units, 250,000 square feet of retail and 2 million square feet of offices, including 1 million square feet for the state. The goal is to replace the State Center complex, which houses 16 agencies and was developed in the 1950s and '60s.

The $215 million first phase includes the state-owned parking garage, possible residences and offices for the Department of Mental Health and Hygiene and the Department of Information Technology. The 300,000-square-foot Fifth Regiment Armory also could be redeveloped eventually as a grocery store, according to the developer, Ekistics LLC CEO Caroline Moore.

BDC President William H. Cole issued a statement Wednesday praising the Board of Estimates' approval of the tax breaks.

"The State Center project represents a substantial investment in the city of Baltimore that will provide a transit-connected anchor for the entire region," Cole said. "This is a transformational redevelopment that connects diverse neighborhoods that are currently divided by concrete buildings and asphalt parking lots. It will turn an aging, obsolete office complex into an exciting mixed-use community that brings people and communities together, creates local jobs and generates tax revenue."

Baltimore Sun reporter Natalie Sherman contributed to this article.

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Melissa Heuer