The Failure of Baltimore's Taxpayer-Funded Building Bonanza

A case study in how not to revive a city.

|

"Harbor Point and Baltimore's Taxpayer-Funded Edifice Complex," produced by Todd Kranin.

The original release date for this documentary was January 8, 2014, and the original writeup is below:

In Baltimore, a small, toxic spit of land that juts out into the Patapsco River is the latest battleground between the free market and government subsidies.

For 20 years, Harbor Point, a 27-acre site of an abandoned chromium factory, has been a dream in the eyes of developers. It's the last big unbuilt site on the city's waterfront and arguably the most sought-after real estate in all of Maryland.

Yes, developers have lusted after the site, but they just didn't want to have pay the full cost of, well, developing it.

In a city as desperate for growth as Baltimore, they don't have to. Baltimore's political class has committed $400 million in public subsidies to a controversial plan that supporters claim will generate 6,000 jobs and build a complex of skyscrapers, residences, and public parks that will forever transform the character of the city.

City officials believe the $1.8 billion-dollar project will spark an economic turnaround. Mayor Stephanie Rawlings-Blake considers Harbor Point a "once-in-a-generation opportunity" to reverse the half-century-long exodus of residents and businesses that have hollowed out Baltimore. Rawlings-Blake and developer Michael Beatty have campaigned relentlessly for the plan, offering promises of urban renewal and jobs in a city with 10.3 percent unemployment.

Yet Baltimore's citizens aren't convinced. The public hearings and frequent street demonstrations outside City Hall have revealed a tale of two cities: sweetheart deals for the well-connected along the waterfront and decades of neglect for the majority of its blue collar residents. The subsidies are a major sticking point, as is the use of an Enterprise Zone for the benefit of wealthy residents. Tax increment financing, known as TIF, will exempt the developer from taxation for a decade. To many residents, Harbor Point is just the latest example of socializing risk and privatizing gain.

Why are the public coffers wide open to wealthy developers? That's the way business has always been done, in Baltimore and elsewhere. Just upriver from Harbor Point, the city's famed Inner Harbor is the result of similar top-down, heavily subsidized development. Decades ago, city politicians spent billions to sweep away Baltimore's crumbling industrial-age infrastructure, replacing it with office towers, popular chain restaurants, museums, and an aquarium, all of which attracts millions of tourists, year after year.

More than just creating a pleasure for daytrippers, the development of the Inner Harbor set a precedent for the nation, as other cities rushed to make their own versions of the scene. In Baltimore, developers lobby politicians for special deals. If they don't get what they want, they give themselves a tax cut by moving their business to the surrounding county, where property taxes are much lower than in Baltimore proper. It's a dynamic that's left large sections of the city abandoned, with only a few tax-exempt institutions such as Johns Hopkins University and the Catholic Church continuing to thrive.

Even the widely praised Inner Harbor has failed to stanch the flow of 300,000 residents who've left Baltimore since 1960. Instead of revitalizing the city's fortunes, the rise of the waterfront has paralleled the decline of basic city functions. Violent crime remains high, public schools underperform, and the cityscape is blighted by the presence of tens of thousands of vacant buildings.

Ironically, the Harbor Point project has overcorme every political obstacle in its way only to be put on hold pending an environmental review of hexavalent chromium in the soil. Despite that delay, developers and their friends in City Hall remain confident that the project will soon be moving forward and that it will both revive Baltimore's fortunes and the reputation of planners who push corporate welfare. It will likely take a decade before the project is up and running and the rest of us learn whether Harbor Point is just another tax-aided mega-project that fails to provide the economic stimulus its backers promise.

NEXT: Iran Reports All Sides Have Agreed to Nuclear Deal

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. OT: Stupid Facebook.

    [Commenter 1] reading the immortal life of henrietta lacks
    This book makes me feel guilty for being white

    [Commenter 2] I only heard the NPR article about it and it made me feel guilty for being half white.

    [Commenter 1] My history classes never gave the black community justice. I am disgusted at what has happened in this country to black people, and slavery is just the tip of the iceberg.

    Collective guilt FTL!

    1. You know who else had collective guilt?

    2. On the other hand it’s precisely that sort of concern-trolling pseudo self-flagellation that keeps the social justice types irrelevant outside of college campuses and tumblr.

      1. As you could have probably guessed, Commenter 1 was just hired at an international nonprofit. Perfect fit for the social justice mentality.

        1. Even better insulated from the public, then. There’s nothing like cultural insularity and the fa?ade of intellectualism to ensure the public remains ignorant or hostile to inane ideas.

  2. California conservative businessman supports raising minimum wage

    Ron Unz, a Silicon Valley multimillionaire, wants state voters to endorse the wage jump that he predicts would nourish the economy and lift low-paid workers from dependency on food stamps and other assistance bankrolled by taxpayers.

    Unz, 52, is a former publisher of The American Conservative magazine with a history of against-the-grain political activism that includes pushing a 1998 ballot proposal that dismantled California’s bilingual education system, an idea he later championed in Colorado and other states.
    […]
    Unz…posits that the increase ? at $12-an-hour, up from the current $8 ? would lift millions of Californians out of poverty, drive up income and sales tax revenue and save taxpayers billions of dollars, since those workers would no longer qualify for many welfare benefits.

    He dismisses the notion that countless jobs would evaporate, noting that most of the state’s lower-wage jobs are in agriculture and the service sector, which can’t be easily automated or transported elsewhere. He believes higher wages would make the jobs more attractive to U.S. residents, curtailing a lure for illegal immigration.

    So he’s basically ‘American’: a racist, xenophobic asshole that wants to protect our jobs and our ‘heritage’ from dirty brown people.

    1. And those jobs will most likely disappear, if not now, then relatively quickly, because of this artificial increase. Then there will be even more people on food stamps.

    2. wants state voters to endorse the wage jump that he predicts would nourish the economy and lift low-paid workers from dependency on food stamps and other assistance bankrolled by taxpayers

      OK, buddy, let’s do it. But I want you to sign a contract saying that if your plan fails–for any reason, no excuses, big guy–you will give 90% of your money to charity. I mean, you want to bet everyone else’s money; why not put your money where your mouth is? Oh wait, now you’re not so sure? That’s what I thought.

      1. Pfft, charity? The money goes to restituting the business owners whose companies he drove into the ground by insisting their #1 expense should jump by 1/3.

    3. And of course what this moron hasn’t taken into account is that minimum wage increases will make hiring illegals even more attractive, since they’re unlikely to complain to the labor department.

    1. But the officers, did they get home safely?

      1. Defendants Carpenter, Hughes and Beggs were fired and eventually convicted of crimes for their involvement in Juarez’s death, according to the complaint.

        Apparently not all of them got away clean. Bizarro world.

    2. I’d rather be left by police at Taco Bell having to solve a zip tie puzzle while drunk than booked for a DUI. You would too.

      1. ^ This is fucking stupid. If a guy is drunk enough to not be capable of driving a car, it clearly puts him in serious danger to be left alone with his hands tied in a parking lot in the middle of the night.

        He could have been robbed very easily. As it stands, the drunk guy wandered into the street and was killed.

      2. ^ This is fucking stupid. If a guy is drunk enough to not be capable of driving a car, it clearly puts him in serious danger to be left alone with his hands tied in a parking lot in the middle of the night.

        He could have been robbed very easily. As it stands, the drunk guy wandered into the street and was killed.

        1. Actually, Irish, unless you’re so drunk you can’t even function (which may have been the case here), as someone who has been arrested several times for various things, I would rather be left at Taco Bell having to solve a zip tie puzzle while drunk than booked for a DUI.

          It’s the difference between finding a way to call a friend or a cab and get home as opposed to being arrested and having your car impounded, being booked, thrown in a cage, eventually brought before a judge, released on some bail/fine, having to go through the DUI process which may include the costs of a lawyer and eventual fines, plus losing your license for months and probably having to attend some kind of DUI class that of course costs more money. And also having that on your record.

          Of course, if someone is so drunk they can’t function, then this changes. But too drunk to drive a car is technically 0.08. Even if you’re well over that, it doesn’t remotely mean you’re too drunk to function.

          1. If he was too drunk to function, he was putting other drivers’ lives in danger and his life is forfeit AFAIC.

  3. It’s the last big unbuilt site on the city’s waterfront and arguably the most sought-after real estate in all of Maryland.

    Yes, developers have lusted after the site, but they just didn’t want to have pay the full cost of, well, developing it.

    Well, of course not. Where’s the graft in that?

    1. Arguably, the state and city have a vested interest in the cleanup of the toxins. But beyond that, they should exempt themselves from participation in the costs.

  4. More from Your Tax Dollars at Work

    http://www.buzzfeed.com/bennyj…..-senate-gi

    1. The $165 Senate watch looks like something I haggled down to $3 on the streets of Shanghai.

  5. “City officials believe the $1.8 billion-dollar project will spark an economic turnaround”

    That is because they don’t know what caused the decline in the first place.

    1. Just like all of the other huge, government-sponsored projects that were going to spark an economic turnaround.

  6. Or they could just lower property taxes by $400B to try to get businesses to move back into Baltimore…

Please to post comments

Comments are closed.