The $5.5 billion Port Covington project in Baltimore would be financed with $535 million of TIF bonds.

DALLAS – The Baltimore Board of Finance has given its initial approval to a waterfront development project that would be financed in part with $535 million of tax increment financing bonds.

Plans for the $5.5 billion Port Covington project, to be built over 20 years, would include an office campus for Baltimore-based athletic apparel company Under Armour as well as offices, stores, apartments, and parks.

Sagamore Development Co., the private investment firm of Under Armour chief executive officer Kevin Plank, controls 160 acres of the project and would serve as master developer.

The 30-year bonds would be sold through the Maryland Economic Development Corp. if the city council approves the 260-acre project in Baltimore Harbor this summer. The finance board will meet May 9 to review the council measure that would establish the TIF district and authorize the bonds.

The first $49 million tranche of the TIF bonds would be issued in spring 2017 if the city council approves the project.

Baltimore councilman Carl Stokes, who is a candidate for mayor and chairman of the committee that will consider the request, said the Port Covington proposal would be scrutinized closely by the city council.

"It's going to take a while," he said. "Obviously, it's huge. It may be the largest TIF in United States history. It certainly is among the top ones."

Baltimore currently has 14 TIF districts with outstanding debt totaling $147.2 million.

Stephen Krause, deputy director of the city's finance department, said the bonds probably would be issued through the state agency rather than by the city to keep Baltimore's debt under its statutory ceiling and avoid any potential threat to its credit rating.

"Going to a conduit issuer would remove the debt from the city's load," he told members of the finance board.

Bob Brennan, executive director of Maryland Economic Development, said the agency is ready to help with the project financing if the city asks for assistance.

The agency has legislative authority to sell bonds on behalf of cities and counties to help finance economic development projects, he said.

"If and when the city asks us to help them, we will present the requisition to our board," Brennan said. "I'm sure our board would help the city and Sagamore by undertaking this project."

The debt would be supported by increases in property values generated by the project. Sponsors estimate that the new construction would add $2.6 billion of assessed value to the city's property tax roll when the project is completed.

The TIF bond proceeds would be dedicated to roads, sewer lines, and parks within the former rail yard that has only a few streets, said Sagamore president Marc Well.

"The positive economic benefits from transforming Port Covington will be unprecedented and significant," he said.

The Maryland Transportation Authority submitted an application last week for a $76.3 million federal grant for new highway ramps and other surface infrastructure serving the Port Covington site through the Transportation Department's new Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies, or FASTLANE, program.

The FASTLANE application is dependent on the city council's approval for the project's TIF district, said authority spokesman John Sales. Without the council's approval, the grant request would be withdrawn, he said.

The FASTLANE grants are expected to be awarded in August.

Funding for the infrastructure work would include $33 million from the state, $43 million from TIF bond proceeds, and $5 million from the developers. Work could begin in 2018 with completion by 2022.

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