A crowd of 250 citizens was told last night that affordable housing was not part of the Harbor Point deal, despite $107 million in TIF public subsidies to help the developer underwrite parks and other infrastructure at the luxury waterfront development.
The Inclusionary Housing Act, passed by the City Council in 2007 and renewed in 2010, requires developers of 30 or more units that receive public subsidies to set aside 20% of housing as low-cost units.
Harbor Point is seeking to build more than 910,000 square feet of residential space, or about 914 apartment units.
City officials said Harbor Point is subject to the city law, but the cost of including about 180 subsidized units was prohibitive.
An affordable apartment at Harbor Point would require about $250,000 per unit to “make the developer whole,” and such subsidies were described as beyond the reach of city finances.
“If the units are too expensive, it [the project] is exempted from the law,” explained Peter F. Engel, deputy housing commissioner.
The crowd attending the City Hall hearing was told of plans to create a special tax zone for Harbor Point and underwrite construction with tax increment bonds, including $59 million for five new parks and $21.6 million for a waterfront promenade.
Legislation Put on Temporary Hold
More than 100 people, organized by United Workers and Unite Here, protested the tax subsidy in front of City Hall ahead of the hearing.
At the start of the meeting, City Council President Bernard C. “Jack” Young vowed that the tax subsidy would get through the 15-member body.
“I support it 199% and I’m going to do everything in my power to make sure it passes,” Young said, who earlier in the day, along with Mayor Stephanie Rawlings-Blake, voted in favor of the subsidy at a Board of Estimates meeting.
But Committee Chairman Carl Stokes said he would not call for a vote authorizing the TIF bonds last night. He said he would instead arrange a working meeting with developer Michael Beatty, with the aim of bringing the legislation before the full Council at its next meeting on August 12.
Beatty has been pressing the Rawlings-Blake administration to pass the TIF legislation and issue the first round of bonds this month.
The developer is under enormous pressure to get construction underway on an office tower for energy giant Exelon, which last year agreed to locate its regional headquarters at Harbor Point.
Beatty Wants “Mixed Housing,” Too
Attending last night’s hearing with his lawyer, Ryan J. Potter of Gallagher, Evelius & Jones, and his public relations guru, Steve Kearney of KO Public Affairs – Beatty said that he, too, favors some low-cost housing at the development.
“I want to have mixed housing,” Beatty told the committee, adding that teachers would make a fine addition to the community. “We will do everything we can to build a project as inclusive as possible.”
In the past, some developers have volunteered to include a few units of affordable housing. That’s something Stokes telegraphed he would fight for, together with a “community benefits” agreement to help residents at low-income Perkins Homes.
Beatty called his $1 billion mixed-use project, located west of Fells Point at the site of a former Allied Chemical factory, “a huge win for the city” and papered over concerns by downtown business interests that the development would “suck” corporate tenants and jobs away from the Inner Harbor.
“This is part of downtown Baltimore, and we will work with Downtown Partnership and others collaboratively,” Beatty said.
The Baltimore Development Corporation (BDC) said the project, at the end of its 10-year build out, would create 6,661 jobs, of which 3,306 would be “net new jobs,” meaning jobs not coming from companies transferring personnel to the complex from other city locations.
In his remarks, Council President Young commenced the mantra of “jobs, jobs, jobs” that was taken up by a string of minority contractors who testified in favor of the project.
“We need work in Baltimore,” said Jeff Hargrave, president of Mahogany Inc., a construction company. He was seconded by Pless Jones, the city’s “demolition king” who heads the Maryland Minority Contractors Association, and Sheila Brooks, president of the Presidents’ Roundtable, a group of African-American business owners.
An equally impassioned group testified against the public subsidies, saying it demonstrated City Hall’s favoritism to Baltimore’s downtown and richer citizens.
The plan to use $59 million to underwrite five parks at Harbor Point (see exclusive Brew story here) was repeatedly greeted by sarcasm and scorn.
Noting the “deplorable” condition of many parks in the city, Mary Roby said that $59 million in new parks should not be created just for “those who live on Baltimore’s gold coast.”
Councilman William H. Cole IV also took up the theme of the state of local parks. “We do a lousy job of maintaining our existing parks,” he said, asking if it made sense to add five new parks to the city’s portfolio.
Have Subsidies Helped Minority Businesses?
Darrell Doan, managing director of the BDC, said the new development would be part of the Waterfront Benefits District and would be included in its cleanup programs.
Councilwoman Rochelle “Rikki” Spector, who represents Northwest Baltimore’s 5th District but spends much of her time at a condo across the river from Harbor Point, praised Beatty for giving the city “a huge opportunity” for increasing its tax base and adding to jobs.
Chairman Stokes took many potshots at the $107 million TIF, at one point asking a minority contractor, “Have the subsidies at Harbor East helped minority businesses?” and confronting Beatty with the assertion that the Exelon Tower does not need any TIF support, so why does the Beatty Development Group?
“The Exelon project is not reliant on the TIF at all. If they build it three blocks away, they will not need a penny of infrastructure, and we’d get the [property] tax immediately.”
“It’s crazy!” Stokes exclaimed.