Urban Renewal

Harbor Point and Baltimore's Taxpayer-Funded Edifice Complex

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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.