The ongoing investigation of Mayor Sheila Dixon has delved into the relationship between local developers and the help they receive from the city. But in Baltimore, such public-private partnerships are commonplace on almost every major project.
Investigators are looking into whether prominent developer Ron Lipscomb used a personal relationship with then-City Council President Dixon to curry favor for projects his company brought before the city.
While that case carries serious ethical concerns, developers regularly seek financial assistance from the city for major projects.
In a study released this week, Loyola economics professor Stephen Walters traces public-private partnerships between top-flight developers and the city back to Charles Center in the late 1950s.
“For the last half-century, no large-scale private investment in or near downtown Baltimore has occurred without special subsidies or tax breaks,” Walters wrote in the study.
Those deals with the city are funneled through the Baltimore Development Corporation, a 501(c)(3) nonprofit organization charged with promoting economic development across the city. The BDC did not return calls for comment Thursday.
Among the projects that have received city assistance is Cityscape, a mixed-use development that was awarded a package of an undisclosed amount in April, and St. James Place, a $7.5 million Westside residential development that got a $1 million package from the city in 2006.
Ultimately, the city?s Board of Estimates is charged with approving those deals. But Walters said the BDC?s recommendations play an important role in the process.
“If you?re a developer in Baltimore City, you?ve got no choice but to cozy up to the BDC,” he said. “They do the negotiations and make the deals. That gives them power.”
There are a few exceptions. Ed Hale, developer of the Canton Crossing mixed-use project, said he did not seek financial help for his $150 million 1st Mariner Tower. But Hale said most other projects do.
“I?m an anomaly as a developer,” Hale said. “I don?t get any [city help], but it seems like everyone else does.”
There is no set formula the BDC applies in determining whether to provide breaks for a project, said Jon Cordish, vice president of retail and mixed-use developer The Cordish Co. While the company?s redevelopment of the Inner Harbor?s Power Plant included a profit-sharing deal with the city, its later Power Plant Live! project was a traditional land purchase.
“The question of whether a subsidy is warranted depends on the context of the proposed development,” Cordish said. “Each project has to be examined on its individual merits and economic impacts.”
Click to read Stephen Walters and Louis Miserendino’s full report, “Baltimore’s Flawed Renaissance.”
