In the fine print, city agrees to pay for additional costs of Central Avenue bridge
Developer Michael Beatty is not required to share any costs of the bridge construction. A Brew exclusive.
Above: A duck navigates the 260-foot-wide inlet that separates Harbor Point from Harbor East, the site of the future Central Avenue bridge.
Baltimore taxpayers are on the hook for potentially millions of dollars of costs related to the new Central Avenue bridge linking upscale Harbor Point with Harbor East.
The city has agreed to pay for any additional bridge costs not covered by TIF (tax increment) bonds issued for public infrastructure at the waterfront site, documents reviewed by The Brew show.
These costs – which have escalated as the estimated cost of the bridge has risen – could amount to as much as $3.4 million.
It wasn’t advertised to be like this.
Last summer, the Rawlings-Blake administration said that TIF (tax increment) bonds would pay for all of the public infrastructure costs at Harbor Point, including roads, parks, a promenade and the Central Avenue bridge.
But documents signed by Mayor Stephanie Rawlings-Blake, the Baltimore Development Corp., and Department of Transportation (DOT) in the last few weeks make it clear that the city does not anticipate the TIF bonds to cover all of the costs of the bridge and related streetscape improvements.
In a “memorandum of understanding” approved by the Board of Estimates on January 8, DOT director William M. Johnson agrees that the city will pay all “eligible costs” in excess of the $6.6 million in TIF funds allocated for the project.
And in a private placement memorandum signed by Mayor Stephanie Rawlings-Blake, the city agrees to assume “all costs in excess of the budgeted [bridge] costs, including the cost of all applicable change orders and supplements.”
The Brew obtained copies of these agreements through a Maryland Public Information Act (PIA) request.
The city has signed an agreement with developer Beatty agreeing to pay for costs above the TIF bond allocation of $6,562,620. (From “Memorandum of Understanding Between and Among the Mayor and City Council of Baltimore, The Baltimore Development Corporation and Harbor Point Open Space Corp. Regarding Construction of the Central Avenue/Harbor Point Connector Bridge,” January 2014)
Costly Project
The Central Avenue bridge is the most expensive capital transportation project currently underway in the city.
It will consist of an approximately 260-foot-long and 70-foot-wide structure over a tidal inlet. The bridge is being designed to accommodate four traffic lanes, two bicycle lanes, a sidewalk and a 12-foot-wide promenade.
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The city has diverted $29.8 million in federal funds to the Central Avenue project, including funds slated for the realignment of Boston Street in Canton.
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Harbor Point’s developer, Michael S. Beatty, has agreed to share in the planning and permit-gathering for the bridge, but is not required to share any costs of bridge construction.
As The Brew previously disclosed, the city plans use a large share of future federal highway grants to pay for the bridge and related “streetscape” improvements on Central Avenue.
The city has diverted $29.8 million in federal funds originally slated for other city roads projects, including the realignment of Boston Street in Canton, to the Central Avenue project.
Additional federal funds will pay for the building of other public roads at Harbor Point.
Escalating Costs
Eighteen months ago, city records show, the Central Avenue project was budgeted at $25-$35 million.
City DOT director William Johnson agreed to the bridge terms.
The cost has jumped to $40-$50 million, according to a “Notice to Potential Bidders” issued by DOT last November.
Even with the maximum allocation of federal funding, the city’s matching share would amount to $8-$10 million, whereas the TIF funds currently allocated for the bridge is $6.56 million.
This leaves a gap of $1.44 million to $3.44 million that the city agrees to pay.
Anticipating this shortfall, the city says will look for “expenditures . . . which may create eligibility” for additional federal or state transportation funds, but if that quest fails, the city will pay the costs out of annual appropriations.
The document goes on to say that the city could reimburse itself for up to $3.8 million in future TIF bonds issued for Harbor Point infrastructure.
Premature to Comment
During last summer’s City Council debate over TIF subsidies for Harbor Point, DOT declined to provide specifics about the anticipated costs of the Central Avenue bridge.
Asked about those costs by The Brew this week, a departmental spokesperson replied in an email:
“It is premature at this time for us to provide any comment regarding the cost of the Central Avenue Phase 2 project since the RFQ was recently issued.”
A Request for Qualifications (RFQ) was issued on January 14, seeking potential contractors for the bridge and streetscape. Candidates will be narrowed through a qualification review this spring, with a Reduced Candidate List (RCL) of contractors eligible to bid on the contract in late summer.
In its RFQ, DOT says it preliminarily hopes to open the Central Avenue bridge to traffic in February 2016, or about six months after Beatty plans to complete the Exelon Tower, the first major building of his planned $1 billion office and residential community.