As expected, BOE approves TIF package for Harbor Point
Does Harbor Point’s cost overruns offer a warning about Port Covington?
Above: The soon-to-be-opened Exelon Tower stands out from the uncompleted infrastructure at the Harbor Point site. (Mark Reutter)
As reported extensively in The Brew, the second series of tax increment (TIF) bonds for Harbor Point – which are triple the size of the original amount presented to the city – easily passed its final hurdle at the Board of Estimates today.
The single surprise was a “no” vote by Comptroller Joan Pratt over the $39 million bond issuance.
She said she was dissatisfied with the contract negotiated with developer Michael Beatty over profit sharing (which she says is insufficient for the city) and cap rates.
Two months ago, the Board of Finance delayed approval of the bonds based on concerns that Beatty had earned excessive profits when he sold the Thames Wharf Morgan Stanley Building four months after the City Council approved the TIF subsidies for Harbor Point.
What about Port Covington?
The board, which Pratt sits on with three private citizens and a representative for the mayor, eventually approved the second series TIF. During its final vote on June 17, Pratt abstained.
The Harbor Point TIF has been dogged by much higher infrastructure costs than estimated during its first phase of construction.
The Baltimore Development Corp. and Beatty say the third and final phase of construction is coming in lower than expected, so the final cost should equal the $107 million TIF maximum awarded in 2013.
The overruns have raised questions about the amount of bonds sought by Kevin Plank for Port Covington.
Plank’s Sagamore Development Co. is seeking $660 million in TIF money, one of the largest amounts requested anywhere in the country. The money is expected to be repaid over 30 years from property taxes generated by high-rise office and apartment development spurred by the project.
Here is our coverage of Harbor Point’s infrastructure challenges:
• Hidden from view: $29 million in unexpected TIF costs
• What’s driving the infrastructure cost overruns at Harbor Point?
• Pavers at Harbor Point to cost $1,170,000
• Finance Board approves big influx of TIF funds for Harbor Point