Michael Hankin and Laurie Schwartz: Harbor Point necessary to move Baltimore forward

If Baltimore is to succeed in our mayor’s goal of attracting 10,000 new families to the city over the next decade, then it is imperative that we embrace creative ways to develop new housing and employment centers.

Currently, our most visible example of this effort is the Harbor Point project, a plan to reclaim what had been one of Baltimore’s most polluted brownfield sites through a redeveloped mix of office, retail, residential and community open space. Anchoring Harbor Point will be the new regional headquarters of Exelon, joining Morgan Stanley, in yet another illustration of how the office jobs that were once primarily confined to our traditional core downtown area are now extending from Canton all the way to Locust Point.

The question facing the Baltimore City Council is whether to move forward on the legislation that would enable the city to finance the public infrastructure needed for development on this prime parcel of land (known as tax increment financing).

The Baltimore Sun had it exactly right when it declared in an editorial on Harbor Point that “the notion that the city is somehow spending money on developers rather residents is false, as is the idea that it’s letting the developer avoid paying taxes. The developer would not pay reduced property taxes as a result.”

In this case, the city is financing the basic public infrastructure — roads, utilities, waterfront parks, a neighborhood charter school — by promising to pay back the bonds through the increased property taxes that will be generated from the land through the new development. If the property taxes fall short, the developer — not the city — is on the hook to make up the difference.

Outside economic experts who have studied the plans — particularly in the context of the successful job creation of nearby Harbor East — realistically predict that Harbor Point will ultimately generate far greater property taxes than the city will need to pay off the infrastructure bonds.

And those estimated property taxes don’t even take into consideration the substantial new taxes that will be generated in other areas — including payroll taxes from an estimated 7,175 construction jobs and 6,611 direct permanent jobs, sales tax revenue from the new retail opportunities at Harbor Point and the 50 percent state reimbursement to the city’s general fund for the enterprise zone credit.

As advocates for Baltimore’s waterfront development who have extensive histories in our city’s past development efforts, we have seen both the good and the bad when it comes to economic proposals being put before our elected officials. Harbor Point is the kind of project that Baltimore needs to support if we are to move our city forward.

First and foremost, the opportunity for job creation is too good to pass up. We applaud Council President Bernard C. “Jack” Young for focusing on the project’s job generation potential when he enthusiastically announced his support for the tax financing legislation.

And as urban centers across the East Coast and Midwest seek to clean up and redevelop properties that were contaminated in the decades before today’s stringent environmental regulations, we believe that what is proposed for Harbor Point will ultimately be viewed by smart growth advocates as a national model. How can older cities like Baltimore grow if huge formerly polluted parcels of land remain off-limits to redevelopment? To make such redevelopment financially feasible, cities need to find ways to extend appropriate infrastructure — just like what is being proposed for Harbor Point.

We know that members of the City Council must fulfill their responsibility to ask the tough questions and ensure that Baltimore’s economic interests are protected. And we are confident that the economic development leaders of the city stand prepared to answer those tough questions — because we know that the economic facts are on their side.

What this city cannot afford is extensive and unwarranted delay. It’s not often that our city and our state get an opportunity to build a new regional headquarters for a Fortune 500 company. Many of our competitor cities will be watching how we handle this opportunity — and if we take actions that create delay and political uncertainty, surely they will be quick to hold up this process as a reason for other Fortune 500 companies to look at their cities instead of Baltimore for future expansion and growth.

Ambitious, visionary projects like Harbor Point are what Baltimore needs to grow, and such projects require basic public infrastructure like roads and utilities. The tax financing plan proposed by Mayor Stephanie Rawlings-Blake would provide for that infrastructure, by having increased property taxes associated from the development dedicated to pay for it. This is the right choice for Baltimore, and we urge the City Council to follow the leadership of Mayor Rawlings-Blake and President Young and give its support to the plan.

Michael D. Hankin is president and CEO of Brown Advisory and chairman of the Waterfront Partnership of Baltimore Inc. Laurie Schwartz is president of the Waterfront Partnership of Baltimore Inc.