Opinion: Port Covington developer asked to cut deals to gain city aid

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Clarification: Language used in an earlier version of this column was not intended to accuse Baltimore City Council President Bernard “Jack” Young of any illegal activity when he proposed that Port Covington’s developer make deals with community groups in order to gain approval for the project’s Tax Increment Financing.   

By Michael Collins

For MarylandReporter.com

I-95 is the road in the middle of this rendering, with the Port Covington plans shown across the bottom. Rendering from Sagamore Development.

I-95 is the road in the middle of this rendering from left to right, with the Port Covington plans shown across the bottom. Rendering from Sagamore Development.

Rodney Dangerfield’s spirit could be felt at the Baltimore City Council meeting last week to discuss the Port Covington proposal.

In the movie, “Back to School,” Rodney Dangerfield played Thornton Melon, an uneducated but self-made millionaire who wants a college degree.  In a memorable exchange he got cross-wise with overly priggish professor of business, Phillip Barbay.

After Melon lists the payoffs and kickbacks required for politicians, unions, and special interests, Professor Barbay retorts, “Maybe bribes, kickbacks and Mafia payoffs are how YOU do business! But they are NOT part of the legitimate business world!”

Under Armour CEO, Kevin Plank, could have used Rodney Dangerfield’s advice, because the self-made billionaire is running into a world of forced deals as he tries to expand his business.

Plank is a Maryland native and founder of Under Armour who wants to expand his Baltimore-based company to the blighted industrial area of Port Covington, between the elevated I-95 and Baltimore Harbor.  He wants to redevelop the 260-acre site and relocate his headquarters there while expanding his work force from 2,000 to 10,000 people.  Plank also wants to create a campus setting for other businesses, shops and restaurants, housing, waterfront park areas, etc.

Standing in the way, however, is decrepit infrastructure.  Plank, through his real estate arm, Sagamore Development, wants Baltimore City to approve more than a half billion dollars in TIF Tax Incremental Funding, to pay for the infrastructure, to support his $5.5 billion redevelopment plan.

Told to cut deals

At a public hearing last week, Baltimore City Council President Bernard C. “Jack” Young told representatives of Sagamore Development to cut deals with local activists so they could move forward, according to published accounts of the meeting in The Sun and Baltimore Brew.

Sadly, it is part of the business world, or at least it is when Maryland’s politicians are involved.

When the football stadiums were being built in Maryland for the Ravens and Redskins in 1996, Prince George’s County Executive, Wayne Curry, famously quipped to former to Redskins owner, Jack Kent Cooke, “You’ve robbed a lot of trains, but I’m robbing this train, Jesse.”

The message was clear.  The money train was rolling through Prince Georges County and the politicians intended to take everything they could grab.  In Curry’s case, however, he was simply making sure that his cash-strapped county was not stuck with the bill.

But Baltimore is more brazen.

In 2005, then-Mayor Martin O’Malley, wanted to build a convention hotel with city bond money.  It was criticized as an attempt to lock-up union support prior to the Democratic Primary election for governor.

The City Council delayed the vote because it was opposed by 12 of 15 council members.  But O’Malley shrewdly added millions of dollars of “community” money, widely viewed as payoffs to local activists, to drop opposition.  The bond bill passed, O’Malley got pre-primary endorsements from key unions, and the city got a Hilton hotel next to Orioles Park that has lost more than $70 million to date.

Public funding for private projects

Two lessons can be gleaned from what columnist Barry Rascovar has called, “O’Malley’s Folly.”  One is that payoffs work, and the other is that the city should be wary of public funding for otherwise private projects.  Promises are not always kept.

For example, another O’Malley brainchild was the biotechnology center in the Middle East community of Baltimore.  Using $78 million in TIF funding, the City backed a plan by Johns Hopkins University to raze 750 blighted homes to make an 88-acre biotechnology hub.  Fifteen years later, however, only one biotech research lab has been built.  The state is funding a big park, and a luxury hotel is being built near Hopkins.

Caution is prudent

Caution on the Port Covington deal is fiscally prudent.  But the strong arming of Under Armour is especially appalling because it is being cast in overtly racial terms, which, in light of the Freddie Gray riots, comes across as racial extortion.

An activist from Communities United, clad in a tee shirt emblazoned with a “Black Power” fist said, “We believe Sagamore’s proposal will build a white, wealthy enclave that leaves most of Baltimore out.”  Representatives of the NAACP Legal Defense and Education Fund, the ACLU of Maryland, and the Public Justice Center assisted her.

These are some of the actors with whom Council President Young says Kevin Plank should cut deals.  It is one thing for government officials to use their positions to get the best deal for the government.  It is another thing altogether for public officials to require deals with favored parties as the price of conducting official business.

Michael Collins can be reached at michaelcollins.capital@gmail.com.

  • Todd Reynolds

    What garbage. So, assuring that the public school system doesn’t lose at least $300 million in state funding is apparently a shakedown. Really, what evidence do you have to make an accusation like this? What specifically in the demands of coalition is a “shakedown”?

  • Jamie Kendrick

    Michael, I am not going to disagree that the politics of Port Covington have become, shall we say a bit unseemly. That said, there is nothing at all preventing under armor from expanding at Port Covington. In fact, none of the proposed tax increment finance would go towards under armour itself. Under Armour now owns all of the land it needs to build a fantastic headquarters. The infrastructure at Port Covington is far from your description as “decrepit.” In fact, most of the infrastructure was built in the early 90s and good generally support the UA headquarters itself. The TIF is about supporting a speculative real estate deal for the area surrounding the under armour headquarters. That Kevin plank and sagamore are willing to take on such a project is great for Baltimore as will be headquarters expansion, but the size and use of the TIF is inappropriate in many ways. For example, are you aware that more than one third of all of the TIF bond proceeds will be used to create parks and recreation areas. That’s not basic infrastructure. The TIF could well be well less than half its size and still accomplish the core needs of the area…and Baltimore could see a return on its investment in 10 – 15 years rather than 20 – 25.

    Let’s do this deal, but let’s not mortgage Baltimore’s hard-won fiscal health in the process.

  • charlie hayward

    “honest graft” is inherent to these deals, whether New York City, Boston, Chicago, etc. TIF money, especially, is red meat to connected insiders who will say anything and cut almost any quid pro quo to get a piece of the action.

  • Leslie Kain

    Kevin Plank has tried to sell the Port Covington project on the basis of its being good for Baltimore. But Jack Young and Communities United are correct in concluding that the development will only benefit White Baltimore. Plank could make good on his purported vision of benefiting all of Baltimore if he were to include funds to: [a] Train & hire current low/no income Baltimoreans for jobs in the Covington businesses, [b] Establish a top-notch charter school in Covington, and [c] Establish a free shuttle bus service running from West & East Baltimore to Covington (to transport employees & schoolkids). Without those or similar initiatives, Port Covington is nothing but a business deal to enrich Kevin Plank; the tax revenues to indirectly benefit Baltimore may or may not accrue many years in the future, given the incentives that are being provided by the city.

  • Diogenes

    This OpEd is arguing for government malfeasance.

    Sagamore is asking for the city to support a TIF of over $500 million. There is nothing unseemly about having to negotiate with the city about job creation, affordable housing and insuring a school funding formula is in place that holds the city harmless. In fact the concept that the city would approve a TIF of this size without negotiating the conditions is absurd. It would be governmental malfeasance to do otherwise.

    BTW- the negotiations are not with the ACLU, Public Justice Center, BUILD and such. Those are only organizations speaking up in our democratic process in favor of a better Community Benefits Agreement than already exists. The ultimate negotiation is with City Council and the Mayor who have the deciding power on whether or not to issue a TIF. It would be irresponsible for them not to negotiate the best possible set of community benefits agreements.

  • DriverRob

    It seems the people of Baltimore believe that Under Armour will expand its headquarters and workforce inside the city and that it cannot go elsewhere. Under Armour can go anywhere it likes and leave the city even more destitute and desperate for tax revenue. Baltimore’s city council and mayor need to decide if they wish to emulate Detroit and drive away all it’s job creators or change their attitudes to foster a brighter future for the city. Negotiations are indeed needed, but cannot be successful without a change of attitude by those representing the city. I believe Kevin Plank will do everything he can to make this part of the city a jewel that will pay a huge amount of new taxes to the city and create thousands of new good paying jobs. It seems the city would want to help him do that instead of trying to hold him up for “donations”.