Subsidizing the Low Road: Economic ... - Good Jobs First

More documents

Recommendations

Info

4. The Economic Development Decision-Making Process in BaltimoreThe following is a description of the process for projects that originate with theBaltimore Development Corporation (BDC). There are other economic developmentcorporations in Baltimore (such as the East Baltimore Development Corporation), butthe BDC is the largest.The mayor's office, the Board of Estimates and the City Council all have influenceover the operations of the BDC and the funding of economic development projects.However, as described below, each of these entities has a different level of control overeconomic development. The mayor has the most control over the operations of theBDC and funding for development projects. The Board of Estimates plays a large rolein approving economic development projects, however, the Board is dominated by themayor. It is composed of the City Comptroller, the President of the City Council, themayor and two mayoral appointees. The City Council has the least amount of controlover the operations of the BDC or the funding of development projects. Its power liesmostly in blocking funding or modifying urban renewal plan amendments.Setting the Direction for the BDCThe Baltimore Development Corporation is a private non-profit agency that hasa contract with the city to initiate and manage economic development projects usinggovernment funds. The BDC receives direction on its priorities through the mayor'soffice, and coordinates with the Deputy Mayor for Economic Development and theDepartment of Housing and Community Development. 84 The mayor appoints the BDC'sBoard of Directors. The board then selects the president and chairperson, based onthe mayor's recommendations.Neither the City Council nor the Board of Estimates has any statutory influenceover the BDC's personnel. Furthermore, only the Board of Estimates has the ability toapprove, reject, or alter the contract with the BDC. 85The City Council's primary influence over the scope of the BDC's activities lies inapproving, altering or rejecting urban renewal plans and urban renewal amendments. 86Urban renewal plans define where the BDC can do development projects and setconditions on aspects of development such as requirements for public participation.Urban renewal plans have two public hearings: one with the Planning Commission andthe other with the City Council.For the most part, the City Council has accepted the BDC's proposed urbanrenewal plans. In some instances where there was controversy, the City Council alteredthe original plan as submitted by the BDC. For instance, the Market Center Urban22
Renewal Plan amendments in 1999 were altered after public debate before thePlanning Commission and City Council. 87 However, the City Council only made thesechanges to the urban renewal amendments with the agreement of the BDC and thePlanning Commission.Budget ProcessUnder the supervision of the mayor, the Finance Department drafts theoperating budget of the BDC, and the Planning Commission drafts the capital budgetfor economic development. The budget is then approved by the Board of Estimatesbefore it goes to the City Council. The City Council can then modify the budgets bycutting funds (it cannot add funds). Supplemental appropriations follow a similarprocedure.The City Council can influence the BDC by cutting the BDC's operating budget.It is possible for the City Council to use such a threat as leverage in negotiating withthe BDC. There is precedent for this: in FY1990, the City Council cut the Charles CenterInner Harbor Management Corporation's (CCIHM) budget in order to send the messagethat it was unhappy with the CCIHM's closed process. 88 However, the City Councilvotes only on the entire BDC budget, not on specific line items, so it cannot cut fundsfor particular projects.Project Specific FinancingGeneral Obligation and Revenue Bonds are used for large projects like tourist facilitiesand business parks. The mayor's office issues requests for these bonds to the Board ofEstimates. If the Board approves the request, it must next be approved by theBaltimore delegation to the Maryland General Assembly (this is pro forma; mostrequests are approved with little debate). 89 Next, the City Council has to authorizeGeneral Obligation bonds to go to a referendum and has to pass an ordinance to enacta revenue bond. The City Council rarely rejects bond requests. 90 The City Councildoesn't know which developers will get the contract to do the work funded throughthese bonds. The Board of Estimates approves these contracts based on therecommendations of the BDC.The BDC's board approves all loans and PILOT agreements before they are broughtbefore the Board of Estimates or the City Council. Before a subsidy package getsapproved by the BDC board, it is reviewed by BDC staff and an internal committee.The review includes an analysis of:• whether the project would be feasible without the subsidies;23
Page 1 and 2: Subsidizing the Low Road:Economic D
Page 3 and 4: Table of ContentsAcknowledgments…
Page 5 and 6: Executive SummaryAn analysis of Bal
Page 7 and 8: of packages. The BDC evaluates prop
Page 9: 1. Revitalizing Downtown: A History
Page 18 and 19: the agenda was the city's acquisiti
Page 20 and 21: Baltimore Management Corporation (E
Page 22 and 23: Table 3. Major BDC Projects Approve
Page 24: 3. How Baltimore Finances Economic
Page 27: While promoting development, TIF co
Page 32 and 33: • whether the project would provi
Page 34 and 35: The real question, however, in eval
Page 36 and 37: to alleviate poverty if job quality
Page 38 and 39: Committee. 130 The Committee focuse
Page 40 and 41: emained skeptical. George Williams,
Page 42 and 43: Effect on State Aid. The state dist
Page 44 and 45: 7. Case Study: Additional Payments
Page 46 and 47: 8. Case Study: The Orioles and Rave
Page 48 and 49: The Ravens RoostWhile the Orioles w
Page 50 and 51: Soon after Modell agreed to move hi
Page 52 and 53: 9. Case Study: East Baltimore Biote
Page 54 and 55: However, the city may well be overe
Page 56 and 57: will allow Johns Hopkins to expand
Page 58 and 59: 10. ConclusionBaltimore’s massive
Page 60 and 61: Wage standards could be pegged to t
Page 62 and 63: 34 Hula, 1990.35 Thomson, 2001.36 L
Page 64 and 65: 103 Levine, 1987a.104 Levine, 2000
Page 66 and 67: 167 Baltimore Development Corporati

Subsidizing the Low Road: Economic ... - Good Jobs First

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?