It has been five years since Under Armour’s Kevin Plank dangled the Port Covington project in front of Baltimore and the city’s leaders bit.
Now it feels like we’ve been catfished, and we’re not talking about the act of catching whiskered fish with rod and reel. We mean the modern term “catfishing” – the act of luring someone into a relationship by means of a fictional online persona for personal gain.
Port Covington was hailed as “Dubai on the Patapsco” after Plank revealed that he was inspired to undertake the massive waterfront development following a trip to that sparkling city of skyscrapers rising improbably in the desert beside the Persian Gulf.
Plank’s team, Sagamore Development, not only promised high-end living for the “creative class,” but tens of thousands of jobs for a struggling city. Newspaper, television and social media ads portrayed the project as part of some epic heroic urban revival.
Skeptics worried that the project would resemble the real Dubai, a wealthy enclave serviced by poorly compensated workers shuttled in from crumbling neighborhoods.
Baltimoreans from all walks of life came together in what could have been a model of democratic engagement to weigh the merits of his plan.
At issue was a $660 million (TIF) Tax Increment Financing package – a nearly $1 billion taxpayer investment with interest – that Plank sought to transform the industrial land he had purchased.
Fast forward to today.
Little of the plan originally sold to city leaders remains in place.
The promised “glittering city within a city” is now being prepared, with the first $148 million tranche of bond proceeds, for a cluster of uninspired mid-rise buildings near Plank’s Sagamore Spirit distillery.
Under Armour’s meteoric rise also proved too good to be true.
At a time when Plank was selling his vision of a five-fold increase in Under Armour jobs, his company was manipulating sales figures to mislead investors, according to the Securities and Exchange Commission, which slapped UA with a $9 million fine.
Last month, the sports apparel maker announced it will shrink its headquarters workforce from 1,900 to 1,000 in conjunction with a move of its Tide Point offices to Port Covington.
In other words, there will be no new jobs at a future UA campus and, as yet, no other company has signed a lease for the first phase of Port Covington office space.
What’s more, Sagamore is no longer the developer. Plank, whose credibility and personal wealth once underpinned the whole project, is now just a minor investor in a generically named joint venture, Baltimore Urban Revitalization LLC.
His pledge to buy the TIF bonds if needed has, like much else, long been forgotten as Under Armour’s fortunes have changed. Even the viability of the Community Benefits Agreement and his other promises to the predominately Black communities near the site are in question.
Plenty of us saw this coming. During the summer of 2016, hundreds of Baltimore residents and activists packed the War Memorial auditorium for a series of “work sessions” convened by then Councilman Carl Stokes, chair of the City Council’s Economic Development Committee.
Residents had done their homework and asked hard questions about the plan’s feasibility and legal compliance.
• They asked why the city was fast-tracking the TIF without doing a thorough due diligence.
• They questioned basing job and revenue projections only on best-case scenarios.
• They wondered about unintended consequences, such as, would the city’s bond capacity and state education funding be impacted?
• They decried that absence of a market study showing a demand for luxury apartments or for millions of square feet of new office space when the commercial occupancy rate in downtown Baltimore was so low?
Mostly, though, the questions centered on how long-suffering communities in South Baltimore and across the city would benefit from the public investment in what was increasingly seen as a “playground for the rich.”
Why, for example, were only one-third of the projected jobs at Port Covington going to city residents? Why had Plank been exempted from the city’s Inclusionary Housing law?
Details like the development’s proposed “archaeological pier” and “world-class kayak launch” only served to confirm their suspicion.
The residents challenged the assumption that, even if all went as promised, real benefits would trickle down from Port Covington to the neighborhoods where they lived. Desiring to be helpful as well as critical, they presented alternative versions of equitable development.
To the extent that city officials responded to these questions at all, they had few answers.
Chairman Stokes’ work sessions eventually led to the negotiation of a Community Benefits Agreement in which Plank and Sagamore pledged to “help raise” $10 million for the six South Baltimore communities across the Middle Branch and agreed to modest changes in an earlier memorandum of understanding (MOU) with the city.
In September 2016, when the City Council voted to approve the $660 million TIF, city officials pledged to conduct a full “due diligence” of the project’s financial feasibility before the first tranche of bonds was issued. Clearly, that never happened.
There are still differing opinions about whether taxpayers will be on the hook for the bond debt should the project fail. In the original proposal, Plank’s Sagamore Development had pledged to purchase all of the city-issued bonds itself.
This seemed to assuage the concerns of the Baltimore Development Corporation (BDC), but, in retrospect, having Baltimore taxpayers act as a straw man to allow Plank and his associates get cheaper financing should have raised another red flag.
Rethink Trickle Down
So what now?
Before the Board of Estimates approves another tranche of debt for any private real estate project in Baltimore, its three elected officials – Mayor Brandon Scott, Council President Nick Mosby and Comptroller Bill Henry – should publicly reassess the priorities and examine the processes that led to the debacle at Port Covington.
Why were they, as city councilmen, so easily swayed by Plank’s grandiose vision that they lost track of basic economics and common sense? (Scott and Mosby approved the 2016 TIF expenditure, while Henry abstained).
How was it that hundreds of citizens, with little access to the financial details, could point out the shaky assumptions and overlooked omissions of the proposal?
More fundamentally, will we remain mired in the same paradigm of trickle-down development that has deepened Baltimore’s social fissures and done little to stem its continuing decline in population?
Isn’t there a better path, one that builds a more equitable economy and a better quality of life throughout the city?
• Charly Carter and Barbara Samuels are Baltimore residents and activists who were part of the PORT 3 coalition opposed to the TIF. Carter can be reached at email@example.com.