$535M sought in city TIF aid
Sagamore wants help with infrastructure
for Port Covington
The city is being asked to contribute $535?million to help finance the redevelopment of Port Covington, where billionaire Under Armour CEO Kevin Plank has embarked on a plan to transform the peninsula with offices, homes, shopping, restaurants, parks and a state-of-the-art campus for his growing company.
The city money would help pay for streets, utilities, parks, and highway and transit improvements for the roughly $5.5?billion project.
Sagamore Development, Plank's private real estate firm, estimates that infrastructure for the project would cost in excess of $1.1?billion. It plans to seek an added $574?million in federal and state funds.
Sagamore officials have been meeting privately with city and state leaders for months to build support for its plans on the peninsula south of Interstate 95, jutting into the Patapsco River's Middle Branch. An ad campaign stating “We will build it together” launched this month.
The Baltimore Development Corp., the city's economic development agency, began reviewing Sagamore's request Wednesday.
Baltimore's $535 million would come from bonds sold by the city. Property taxes generated by the project would pay off the debt, in a sometimes controversial support mechanism known as tax-increment financing. If it moves forward, the request would be the largest tax-increment financing, or TIF, deal in Baltimore history and among the largest in the country.
“What we're going to talk about today is huge, monumentally huge,” Sagamore President Marc Weller told the BDC on Wednesday. “It's a transformational project that's going to create a lot of opportunity, a lot of jobs throughout Baltimore.”
Weller said the company hopes to win approval before the end of the year — a timeline dictated by Under Armour's urgent need to expand and Sagamore's desire to seize on federal funding opportunities.
Under that timeline, approval would rest with outgoing Mayor Stephanie Rawlings-Blake's administration and the current City Council, which is expected to see turnover in a heated election in which some have questioned whether such deals benefit the city at large.
Rawlings-Blake said Wednesday that she believes Sagamore's proposal could be a “catalytic project” for Baltimore.
“This is one of these defining moments in Baltimore's history where we are a witness to a major transformation,” she said.
City officials say it is too early in the review process to share estimates of how much debt the city would be taking on. They said they expect to sell the bonds in several rounds over a number of years and would not approve something that would jeopardize the city's bond rating.
Port Covington is part of the city's Enterprise Zone, making any project eligible for property and income tax breaks.
Republican Gov. Larry Hogan expressed support for the project Wednesday, saying he expects it to create jobs in the city.
“Every day, Governor Hogan is focused on helping Maryland companies expand and create more jobs, which is why he is strong supporter of the redevelopment at Port Covington,” said Hogan spokeswoman Hannah Marr. “Kevin Plank's vision for Port Covington will not only be an incredible economic generator for Maryland, but will also play a pivotal role in revitalizing the great city of Baltimore.”
Plank, who founded Under Armour and is its largest shareholder, has spent more than $100 million of his personal fortune to buy about 160 acres in Port Covington and 40 acres in nearby Westport.
A former rail yard, Port Covington today includes empty land and The Baltimore Sun's printing plant, for which the newspaper has a long-term lease. BDC President William H. Cole IV described the plan as basically “building a mini-city.”
Sagamore and Under Armour started seeking approval for their plans in January.
The sports apparel brand wants to build a headquarters complex of about 3.9 million square feet on 50 acres south of Cromwell Street, including three towers, parking for 5,000 cars and a small stadium.
Sagamore is leading plans for a mixed-use development on adjacent land. The firm wants approval for buildings comprising 9?million to 13 million square feet, including more than 7,500 homes for sale or rent, more than 200 hotel rooms and about 1.5?million square feet of office space. Construction of the Sagamore Spirit whiskey distillery is underway. The development would create nearly 50 city blocks, 17 streets, more than 60 intersections and about 40 acres of parkland, Sagamore said. The proposed master plan shows a light rail spur with two new stops.
Under Armour employs about 1,900 people in Baltimore, has annual sales of nearly $4 billion, and plans to grow into a $10?billion company in a few years.
Plank, whose personal fortune is valued at $3.2 billion, ranks 527th on Forbes magazine's 2016 list of the world's billionaires and is the Baltimore region's wealthiest individual.
Under Armour has said it would not seek public support for infrastructure on its campus, designed to accommodate as many as 10,000 employees. Property taxes from that development would help pay for the TIF debt. If revenues generated in the TIF district fail to satisfy the bond obligations, Sagamore would be responsible for making up the difference.
Any TIF deal for Port Covington would need approval from the BDC, the city's Board of Finance and the City Council and could face opposition.
Calling tax increment financing one of the most expensive ways to support development, Ronald Kreitner, a former state planning director, said the city needs to scrutinize the request to make sure the money is used for legitimate public costs, such as roads or sewer, not private costs.
The Rev. Andrew Foster Connors of Baltimoreans United in Leadership Development said there must be a clear public benefit before any city assistance is approved. “We've always been concerned that the amount of public resources that have gone into downtown have not benefited the neighborhoods. We've got to look at the details of the deal. We can't just take Plank at his word that this is going to be good for all of Baltimore.”
City Councilman Carl Stokes, a mayoral candidate and critic of city subsidies, said he could not take a position on the proposal without seeing more details. “The whole development is a huge game-changer,” he said. “It could be one of the most important projects in the past 100 years or so. I do support the concept of the Port Covington project. There's no way not to support that. But they have to answer questions.”