WASHINGTON – The Baltimore City Council on Monday approved a $660 million bond deal backed by property tax revenues to transform the Port Covington neighborhood, making it the largest tax increment financing district in the city's history.
The council voted 12-1 on the bond financing for the $6.9 billion project, which will create a new global headquarters for Baltimore-based sports apparel company Under Armour as well as residential, retail and green space on the 260-acre industrial area.
The project is owned by Sagamore Development Company, a Baltimore-based real estate firm founded by Under Armour CEO Kevin Plank and developer Marc Weller.
In a statement released Monday, Weller thanked Baltimore Mayor Stephanie Rawlings-Blake, City Council President Jack Young and community leaders for making the project a reality.
"We are excited to get started creating tens of thousands of jobs, generating long-term positive economic impact for Baltimore city and building this transformational, inclusive redevelopment together," Weller said.
The deal includes three bills approved by the city council, one of which includes the $660 million bond deal that now must be signed by Rawlings-Blake to take effect.
The bonds are expected to be issued by Baltimore's finance department in four to five phases over the next 12 years. Construction is expected to take place in phases over 25 years.
According to plans, the first tranche of TIF bonds would be issued in June 2017 for $62 million, followed by a second tranche of $208.3 million in 2018. A third tranche of $169.7 million would be issued in 2023, and a fourth tranche of $218.7 million would be issued in 2028.
The project, anchored by a new 50-acre, 3.9 million-square-foot headquarters for Under Armour, would be partly financed by $535 million of increased property tax revenue to be collected within a tax increment finance district. Those funds would go toward infrastructure construction, but no TIF revenues would go toward the Under Armour headquarters.
Remaining public funding includes $349.5 million in state money as well as $224.2 in federal financing. Sagamore would provide roughly $327.8 million, according to plans.
Proponents have estimated the development will generate more than $5.4 billion in economic activity and 25,000 jobs as well as $250 million in annual state and local government revenues.
The project has had its share of controversy and opposition, most notably from community groups that called for local hiring mandates as well as the availability of affordable housing. One of those concerns was quelled when the project plans were amended to include a 30% local hiring mandate.
The TIF application was approved earlier this month by the City Council's Taxation, Finance and Economic Development Committee. It was also approved in March by the Baltimore Development Corporation, the private nonprofit that grants TIFs for the city.
According to the TIF application, the project would also include 1.5 million square feet of retail and entertainment space, more than 7,500 rental and for-sale residential units, 500,000 square feet of industrial manufacturing space, 200 hotel rooms, 1.5 million square feet of office space, and 41 acres of public parks and waterfront.
