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BDC recommends tax breaks to developer of “Superblock”

Development agency won’t divulge the amount of tax breaks requested.

Above: The BDC board before going into closed session this morning to approve a tax break for Lexington Square Partners. Deputy Mayor Kaliope Parthemos is second from right.

The Baltimore Development Corp. (BDC) today recommended that Mayor Stephanie Rawlings-Blake approve property tax breaks to the developer of the $150 million retail and apartment complex on Baltimore’s West Side known as  “Superblock.”

At its monthly meeting, the quasi-public agency went into closed session to approve a PILOT (payment in lieu of taxes) for Lexington Square Partners, a group of New York and Atlanta businessmen who have held exclusive development rights to the city-owned block since 2007.

M.J. “Jay” Brodie, president of the BDC, refused to divulge the amount of PILOT breaks recommended by the agency, saying it involved privileged financial information.

Under a PILOT, a developer pays 5% of the assessed value of the improved property for a set number of years.

Brodie said the board unanimously recommended the issuance of PILOTs for two aspects of the Superblock project – a 296-unit apartment tower and a 650-space parking garage.

The BDC board deferred action on the developer’s request for a PILOT for 217,444 square feet of proposed retail space.

The issuance of PILOTs to glitzy Harbor East and Inner Harbor projects has sparked several protest demonstrations by Occupy Baltimore and BUILD (Baltimoreans United in Leadership Development).

“Moving Forward”

The head of the City Council’s taxation committee, Carl Stokes, has called for a moratorium on new PILOTs until the Council reviews the whole process. This followed a report by a task force appointed by Stokes that questioned various aspects of the administration of PILOTs.

Brodie said today that the BDC does not feel compelled to follow Stokes’ request for a moratorium. “The view of our staff and the BDC board is to move forward” with development projects that benefit the city, he said.

Mayor Rawlings-Blake has made the long-stalled Superblock project one of her top priorities. The project has been delayed by court cases, a preservation battle and a still-unresolved controversy on how to commemorate a 1955 civil rights sit-in at a former Read’s Drug Store, which is part of the project.

Preservationists say Lexington Square Partners has been complicit in the delays by refusing to follow guidelines for the existing historic buildings on the site.

The developer has requested – and received – three extensions from the Rawlings-Blake administration to continue their exclusive rights to the property. The latest extension ends on April 30.

Brodie said the board acted today after concluding that “the private-sector economics won’t work” for the Superblock project.

The BDC refers to this as the “but for” rule, meaning that a privately-financed project won’t happen “but for” tax subsidies proffered by the city.

Brodie described the project as “a game changer” for the city’s West Side, and said he and the developers were ready to wait out the court cases to see the project to completion.

The BDC closed today’s meeting by invoking an exemption to Maryland’s Open Meetings Act pertaining to financial or proprietary information whose public disclosure would injure the party involved.



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