Baltimore Development Corporation
- 1 History/Mergers
- 2 Structure
- 3 Tax credits
- 4 Projects
- 5 Current proposals
- 6 Legal status
- 7 See also
- 8 External links
- 9 References
The BDC is the result of mergers between the former Baltimore Industrial Development Corporation (BIDC), the Baltimore Economic Development Commission (BEDC); merged with in 1974-76 to form the new Baltimore Economic Development Corporation (new BEDCO), later the Howard Street Market Place; Charles Center–Inner Harbor Management (CC-IHM) (descendents of the famous re-development public-private agencies from the 1950s and 60's which transformed the old downtown and waterfront districts of the City, under the D'Alesandro,[Jr.]-Goodman-Grady-McKeldin-D'Alesandro,[III] city mayoralties) and the Market Center Development Corporation (which had merged with CC-IHM in 1989 to become Center City-Inner Harbor Development, Inc.) The BDC was eventually formed out of these agencies, commissions, corporations and groups in 1991.
The merger came in the wake of an expansion of the Open Meetings Act provoked by the City Council's frustration with the opacity of CC-IH.
The BDC is not directly accountable to the municipal government of Baltimore. However, its Board is appointed by the Mayor, and many of its economic programs require approval from the Baltimore City Council.
"City of Baltimore Development Corporation v. Carmel Realty Associates"
The BDC has a complicated legal status because it is a public-private status agency, also a non-profit organization, but also closely involved in City business. Criticisms of the BDC's secrecy and its predecessors since the early 1980s amid infamous charges then of a "shadow government" against the administration of then Mayor William Donald Schaefer, (1921-2011), [served 1971-1986], by the then Baltimore City Council President Walter S. Orlinsky and long-time financial/political "gadfly" Comptroller of the City, Hyman A. Pressman, (1914-1996), which circulated in the Baltimore media, including especially The Baltimore Sun, resulted in a 2006 Maryland Court of Appeals case titled "City of Baltimore Development Corporation v. Carmel Realty Associates".
In this case, the court ruled that the BDC "was" subject to the Maryland "Public Information Act" and the Maryland "Open Meetings Act", rules that, like the federal "Freedom of Information Act", require government bodies to disclose information to citizens. The main rationale for this decision was the mayor's control over the appointment of the Board.
The updated version of the Maryland "Public Information Act Manual" now reads: "A nonprofit entity incorporated under the State’s general corporation law may also be considered a unit or instrumentality of a political subdivision for purposes of the PIA, if there is a sufficient nexus linking the entity to the local government. See Baltimore Development Corp. v. Carmel Realty Associates, 395 Md. 299, 910 A.2d 406 (2006) (nonprofit corporation formed to plan and implement long range development strategies in city was subject to substantial control by city and thus was instrumentality of city subject to PIA)".[page needed]
One of the BDC's major functions is to help businesses receive tax credits. The official rule for these credits is a "but for" test: they are only to be used when the project would not go into effect without them.
The BDC mediates several types of credits:
Payment in lieu of taxes
Payment in lieu of taxes (PILOT) is an agreement under which a company can pay the city an agreed-upon amount instead of the property taxes they would normally be assessed.
The BDC controlled 12 PILOTs as of October 2011. These represented $12.8 million in tax exemptions; the properties corresponding generated $15.4 million in other taxes (e.g., parking, energy, telephone).
Tax increment financing
Tax increment financing (TIF) is a way of subsidizing current development based on the expectation of future tax gains. To pay for a TIF subsidy, the city issues a bond, which it expect to pay back based later from taxes.
The state of Maryland authorized Baltimore to use TIFs in 1994; however, the city was required to secure voter approval through referendum and none were issued. In 2000, new legislation allowed the city to implement TIFs without voter approval.
As of October 2011, the BDC had issued 10 TIFs in Baltimore. (With one TIF issued to East Baltimore Development Inc. under direct city control.) These already represent a debt for the city of $135 million, with $315 million worth of additional bonds still to be issued.
The BDC is responsible for Baltimore City's Enterprise Zones (EZs); businesses inside these zones are eligible for special tax credits. EZ "Focus Areas" offer extra benefits.
The BDC oversees development of major downtown projects, as well as development of Baltimore city-owned business and industrial parks.
The corporation and the City are under public criticism for the planning, financing and construction of the Hilton Baltimore Convention Center Hotel. The $301 million, 750-room hotel near the city baseball and football stadiums is an almost entirely publicly funded project (through city bonds), expected to open in August 2008. Hilton Hotels Corporation is expected to contribute around $7.1 million to the project.
Emerging Technologies Center
The Emerging Technologies Center (ETC) is business incubator intended to support growing technology and biotechnology companies. The ETC has facilities in Canton and at Johns Hopkins Eastern. Its President and Executive Director since April 2012 is Deborah A. Tillett.
The ETC runs a program called "AcclerateBaltimore" that gives $25,000 to emerging companies trying to bring a product to market. Of the four companies receiving this funding in 2012, three are developing web applications and one concerns machine learning. The program requires these companies to stay in Baltimore for five years.
From the BDC press room:
- The Cordish Company is requesting a PILOT subsidy for a $65 million mixed-use development at 701 E. Baltimore St.
- Two companies have submitted competing proposals for a new carousel at the Inner Harbor between the Maryland Science Center and Rash Field (which has existed at that site for decades).
- The BDC is considering changes to the area eligible for Enterprise Zone status; these changes would subsidize a development at Harbor Point (near Harbor East).
The BDC was the subject of a 2006 Maryland court ruling declaring that its Board of Directors meetings and all internal documents were subject to Freedom of Information Act requests under the Maryland state sunshine law.
- Baltimore Area Convention & Visitors Association
- Baltimore Convention Center Hotel Project
- Baltimore Convention Center
- Baltimore Visitors Center
- 1st Mariner Arena
- Inner Harbor
- Langsdale Library (8 February 2012). "Baltimore Industrial Development Corporation (BIDC)". BIDC Collection Overview. University of Baltimore. Archived from the original on 6 July 2012. Retrieved 10 August 2012.
BIDC was governed by a board consisting of seven members of the city government appointed by the Mayor, seven members of the business community named by the Chamber of Commerce of Metropolitan Baltimore, and seven members of the general public selected by the board. The corporation carried out its work under contract with the City, the terms of which provided that it fulfill its duties under the authority and direction of the Mayor. In formulating actions, directions, and policies, former Mayor William Donald Schaefer, (1921-2011), [served 1971-1986], was guided by the city’s Economic Development Commission. In 1976, BIDC merged with the Baltimore Economic Development Commission to form the Baltimore Economic Development Corporation (BEDCO). BEDCO later merged with the Howard Street Market Place and Charles Center-Inner Harbor Management, forming the Baltimore Development Corporation in 1991.
- Tondro, Maximilian (December 2010). The Baltimore Development Corporation: A Case Study of Economic Development Corporations, Shadow Government, and the Fight for Public Transparency and Accountability (PDF) (Thesis). Maryland Legal History Publications. University of Maryland. Retrieved 11 August 2012.
- Kate Davis; Chauna Brocht; Phil Mattera & Greg LeRoy (2002). Subsidizing the Low Road: Economic Development in Baltimore (PDF). Washington, D.C.: Good Jobs First. Archived from the original (pdf) on 10 March 2003.
- City of Baltimore Development Corporation v. Carmel Realty Associates, et al., 910 A.2d 406 (Md. 3 November 2006) (“We hold that the trial court erred as a matter of law and that the City of Baltimore Development Corporation is, in essence, a public body for the purposes of the "Open Meetings Act" and that it is also an instrumentality of the City of Baltimore for the purposes of Maryland's "Public Information Act".”).
- Fritze, John (4 November 2006). "Open Books to Public, BDC is Told; Development Agency has to Disclose Details of Deals". Baltim. Sun. p. 1A. Retrieved 11 August 2012.
In a decision that could have broad implications for the public's right to inspect the workings of government, Maryland's highest court ruled yesterday that the agency overseeing Baltimore's economic development must open its meetings and its paperwork for public review. Writing that the Baltimore Development Corp. has previously been able "to cloak the business of the citizens of the city of Baltimore behind the veil of a supposedly private corporation," the Court of Appeals dismissed city arguments that the agency's closed-door meetings are legal and crucial to the agency's work.(registration required)
- Gansler, Douglas (October 2011). "Chapter 1: Scope and Agency Responsibilities" (PDF). Maryland Public Information Act Manual (12th ed.). Office of the Attorney General. Retrieved 11 August 2012.
- "Pilots & Tif's". Business Assistance. Baltimore Development Corporation. 2010. Retrieved 9 August 2012.
- "Tax Credits: Tax Credits Against Local Taxes". Business Assistance. Baltimore Development Corporation. 2010. Retrieved 9 August 2012.
- "Report of the Task Force on Baltimore City Public/Private Development Financing Efforts" (PDF). Baltimore City Council. October 2011. Retrieved 9 August 2012. With: List of TIFs, List of PILOTs,
- Reutter, Mark (9 November 2011). "Subsidies to developers should be prioritized and better monitored, task force says". Baltimore Brew. Retrieved 9 August 2012.
It cited tax breaks at Harbor East, Mondawmin Mall, Belvedere Square, Harbor East and Clipper Mill as examples of “reactive” city policy that used the “but for” rule, meaning that a project would not be built “but for” the use of tax incentives. “The city’s current stated TIF and PILOT policies clearly detail the ‘but for’ test as one of the requirements of approval. However, some in the public perceive that support is not equally available to all projects and developers, and that the financial analysis used to establish the ‘but for’ is not applied uniformly.”
- "Baltimore City Enterprise Zone". Business Assistance. Baltimore Development Corporation. 2010. Retrieved 9 August 2012.
A business is eligible for the Enterprise Zone (EZ) tax credit program if it makes a capital investment in its property (constructs, renovates, or expands an existing facility) or hires at least one new employee in the Enterprise Zone. Commercial, Retail, and Industrial projects are eligible. Residential properties are not eligible for any of the Enterprise Zone tax credits. If a property is mixed use, the commercial parcels are eligible. The Enterprise Zone also has sections called Focus Areas that offer increase benefits to companies.
- Baltimore Development Officials Proposing 100% Financing for 750-room Hilton Adjacent to Baltimore Convention Center; Would Issue $290 million in Tax-exempt Revenue Bonds
- Logan, John (March 2012). "inside the Baltimore Development Corporation". E-Newsletter. Baltimore Development Corporation. Retrieved 9 August 2012.
- Ray Weiss; Jessica Trzyna (19 December 2011). "Baltimore's Emerging Technology Center (ETC) Unveils Accelerate Baltimore". Baltimore Development Corporation.
Noting that Accelerate Baltimore will require participating companies to remain in Baltimore for at least five years, Baltimore Mayor Stephanie Rawlings-Blake adds, “By capitalizing on the City’s strengths, these companies will not only succeed in their own right, but will become a magnet to draw other technology companies to the City while simultaneously providing jobs and expanding the City’s tax base.” Mayor Rawlings-Blake has been a strong supporter of the ETC and increased its funding in the most recent budget.
- Logan, John (20 June 2012). "Cordish Company Submits Revised Proposal for 701 E. Baltimore Street". Baltimore Development Corporation. Retrieved 9 August 2012.
The Cordish Companies’ revised proposal calls for a mixed-use development consisting of 226 rental apartments, 15,000 square feet of retail space and 225 above grade parking spaces. Project costs have been estimated at $63 million. A request for City financial assistance in the form of a PILOT (Payment In Lieu of Taxes) is part of the proposal.
- "BDC Receives Two Proposals For New Inner Harbor Attraction". Baltimore Development Corporation. 1 June 2012. Retrieved 9 August 2012.
The Baltimore Development Corporation (BDC) announced today that it has received two proposals in response to the Request for Proposals (RFP) issued by BDC and the Baltimore City Department of Recreation and Parks, on behalf of the City of Baltimore, for a New Inner Harbor Attraction to be located between the Maryland Science Center and Rash Field.
- "BDC to Hold Public Hearing for Proposed Changes to Baltimore's Enterprise Zone". Baltimore Development Corporation. 23 March 2012. Retrieved 9 August 2012.
The Enterprise Zone is a property tax credit program for businesses making capital investments in their property (i.e., construction or renovation of a building, or expansion of an existing facility) or hiring at least one new employee in the Zone. Commercial and retail as well as industrial projects are eligible. Residential properties are not eligible for any of the Enterprise Zone tax credits.
- Briggs, James (31 July 2012). "Harbor Point developers seek enterprise zone status". Baltimore Business Journal. Retrieved 9 August 2012.
The owners of Harbor Point and the Alameda Marketplace are seeking changes to Baltimore City’s enterprise zone that could lead to millions of dollars in tax breaks.
- "Enterprise Zone Expansion Applicants (Aug 8 Public Hearing)". Baltimore Development Corporation. 23 July 2012. Retrieved 9 August 2012.
The Baltimore Development Corporation has received an application submitted by Harbor Point and surrounding properties to be included in the Enterprise Zone for this fall’s expansion.
- City-sponsored redevelopment corporation ruled to be a "public body"
- http://www.courts.state.md.us/opinions/coa/2006/14a06.pdf Maryland Court of Appeals Ruling