Sagamore Development Co. has requested $535 million in public financing for the redevelopment of Port Covington. Daily Record reporter Daniel Leaderman reported July 14 that Sagamore had reached a “community benefit agreement” with six neighborhoods in the vicinity of Port Covington that will provide almost $40 million over the next 30 years to fund various projects in the neighborhoods. Neighborhood representatives stated that their plans include a swimming pool, community center, and library.
Not to be outdone, Baltimore City Councilman Carl Stokes announced this week that he will seek to delay council hearings on the proposed tax increment financing (TIF) until Sagamore agrees to additional housing, hiring and profit-sharing investments.
Years ago, private and public exactions such as these were considered to be little more than shakedowns paid by developers in order to gain the support of neighborhoods and elected officials, and they remain controversial. On March 14, Daily Record reporter Adam Bednar quoted from a blog post by noted Baltimore architect Klaus Philipsen, in which Mr. Philipsen called for a “meticulous analysis of the proposed project, the estimated cost and the benefits that the project promises.”
These exactions are based on nothing more than old-fashioned horse-trading, not “meticulous analysis,” and the amounts of money involved are arbitrary numbers arrived at through negotiation. In an ideal regulatory world, the taxes, fees and other exactions paid by a developer are calculated in accordance with established rules.
There is a real danger that the focus on these side deals will distract attention from the merits of the TIF proposal itself. Could a few nice-to-have amenities like swimming pools be more politically attractive than a stronger financial deal for the city?
There is general agreement that the proposed redevelopment is an excellent opportunity for the city; as Philipsen pointed out, that does not mean that city does not need to carefully scrutinize the proposal in order to assure that the city is fully protected from unnecessary financial risk. Approval by the city should be based on that scrutiny and not on side deals having nothing to do with the refinancing.
David A. Plymyer
[Published as a Letter to the Editor by The Daily Record on July 21, 2016. I did not post the letter until October 2, 2016; the date of posting listed above was backdated to place the letter in chronological order on the blog.]