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Posts Tagged ‘Infrastructure’

Good news for anyone who lives or works in South Baltimore: this coming Monday, June 4th, there will be two changes that will expand circulator service:

1.) The existing Purple Route will be extended about one quarter mile farther south to Fort Avenue. This long overdue connection will serve many of the smaller, local businesses that operate on and around Fort Avenue.

2.) The Banner Route begins service and, despite the contested path the Banner Route will take, there will only be about half a mile between the two routes that serve Fort avenue. Basically, no business on Fort Avenue will be more than one quarter of a mile from a Charm City Circulator Stop.

With the addition of the Banner Route and the extension of the purple route, the Circulator will actually begin to resemble its own small transit network.

The new Banner Route and the addition to the existing Purple Route figure to attract even more riders to Baltimore’s fledgling transit system. Even without any changes, ridership climbed again between March and April. In fact, as of April 18th, the Circulator celebrated its five millionth rider. The system notched its four millionth rider in mid-January. So, over the past three months, the Circulator has transported 1 million riders. Not too bad for a system paid for by a parking tax and some grant money.

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There has been a common theme in the news recently: invest now, save later. There are two huge issues before Maryland’s legislature. One involves raising the gas tax; the other involves raising billions of dollars for school improvements and construction in Baltimore City. The common thread is the need now and the payoff later.

The Gas Tax:

There is a lot of opposition to the gas tax but there is also a demonstrated need for it: just last year, Maryland passed New York as the state with the highest average commute time– almost 32 minutes. The gas tax would pay for much needed improvements to roads, bridges and mass transit. These projects would help to lower commute time and repair the State’s ailing infrastructure in other areas. The American Society of Civil Engineers (ASCE) reported that Maryland’s water systems (both drinking and wastewater) need $9.4 Billion in investment over the next 20 years. Water quality improvements are not just for the benefit of the Chesapeake Bay, they will ensure Marylanders’ access to safe drinking water.

The ASCE also reported that in Maryland:

  • 29% of bridges are structurally deficient
  • 44% of Major Roads are in mediocre or poor condition and
  • 55% of Major Urban Highways are congested

Traffic on I-83 - lane closures caused by high water - a sign of things to come without investment in stormwater management and transportation infrastructure

Rebuilding Maryland’s infrastructure should be a high priority even for those who will pay more at the pump. Those same Marylanders who are opposed to a gas tax hike are likely the ones will suffer most from increased commute times as a result of inaction. The Baltimore Sun recently exposed the dangers of  allowing the State’s infrastructure to fall apart and the threat of such degradation on an already fragile economy.

Education:

A bill before the Maryland General Assembly would help Baltimore City reach its goal of raising $2.8 billion to put toward improving the City’s schools, many of which lack basics such as heating and cooling systems. Many in Maryland are not in favor of the bill including the Executive Director of the Public School Construction Program, David Lever. Mr. Lever’s criticism is that, if passed, this bill would grant the City a larger amount of money than other jurisdictions which he insists is not “fair”. However, a quick look at the map below will show that Baltimore’s request isn’t about fairness, it’s about need.

A map showing the conditions of various Baltimore City Schools

The allocation of money to Baltimore City over other jurisdictions may not be “fair” from a statewide perspective but it is smart: if the State does not act now, the $2.8 billion will likely grow to 3, 4 or even 5 billion dollars.In other words, the State’s unwillingness to act now will cost taxpayers later. In fact, a recent op-ed in the Baltimore Sun suggests “that for every $1 invested in early childhood education, society saves as much as $16, offsetting the cost of remedial education, teen pregnancies, juvenile delinquency and incarceration.” That kind of return is one most investors can only dream of and hardly one the State can afford to pass up.

Though investment in our schools may be fiscally responsible, it isn’t about the money. Mayor Stephanie Rawlings-Blake, understands that and has proposed a $300 million bond to the Baltimore City Council which would be paid for by an increased bottle tax. Baltimore’s kids can’t wait; according to a report issued by Baltimore City Public Schools, students are being taught in schools built an average of 40 years ago, the highest average age of school buildings in the State. Meanwhile, the $32 million made available by the State to the City for school construction in 2012 is barely enough to make the repairs necessary to keep old schools operational. Baltimore’s public schools need a big investment now in order to turn them into great places to learn.

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A Brief Update:

Constellation Energy, Baltimore’s only remaining Fortune 500 Company is going to merge with Exelon, a Chicago-based energy company. The merger will likely eliminate around 600 jobs, most of them in Baltimore. Shortly after the  merger was made pubic, Exelon announced that it would be seeking new office space, abandoning its current home at 750 East Pratt Street.

Constellation Energy's current headquarters at 750 E Pratt Street

In this same statement, Exelon also affirmed its commitment to keep what was left of its Baltimore employee base in Baltimore. Several sites and proposals were considered but ultimately the soon-to-be energy giant chose Harbor Point, a 27 acre parcel just southeast of Downtown Baltimore.

Exelon’s decision to develop Harbor Point ruffled some feathers in the business community. Those upset contend that the construction of a new building will saturate a downtown office space market where vacancy rates are already high, surpassing 16% as of October, 2011.

A map showing the location of Harbor Point in relation to the Inner Harbor and Downtown Baltimore. Courtesy of the Baltimore Sun

A Question of Perspective:

Others worried that moving hundreds of employees farther from the traditional downtown core, centered at Pratt and Light Streets, would further destabilize and decentralize the business district. The trend of development toward Baltimore’s eastern waterfront has been happening for quite some time now. Exelon’s decision should have come as no surprise. Over the past five years, Harbor East has made itself into a destination in its own right, attracting high-end shops and restaurants and a clientele to match. The question is: why are downtown business leaders more upset by the location of a new office building than they are by the jobs that will be lost as a result of the merger? Why can’t what’s good for Harbor East be good for Baltimore’s downtown too? If we just moved the imaginary line between “Downtown” and Harbor East from President Street to Caroline Street, there might be less animosity and more cooperation in the business community.

A map of Downtown Baltimore with the Downtown Partnership's coverage area outlined in green and Harbor East shown in light blue at the bottom right

Changing with the Times:

As cities grow, so must their cores, either out or up. It’s a fact of urban development. The cities, districts and buildings that grow most are able to adapt to changing market conditions and make themselves more desirable to people and businesses. An excellent example can be found right here in Baltimore. In 2009, when Legg Mason left their headquarters at 100 Light Street, the owners of the building took the opportunity to redesign the plaza surrounding the building and renovate the interior. That investment helped attract Transamerica which now leases about 140,00 square feet, or 10 floors, and has its name on the tower at 100 Light Street.

The redesigned plaza in front of 100 Light Street

Baltimore’s traditional downtown hasn’t had many buildings follow the example set by 100 Light Street. The results of this lack of investment can be seen in the eastward trend of development in the past several years. Below is a series of aerial photos which illustrates this trend.

An aerial view of Harbor East in 1994

An aerial view of Harbor East in 2002

An aerial view of Harbor East in 2009, with all of the buildings either under construction or completed.

Show me the Money:

Harbor Point is in a Maryland Enterprise Zone. State approved enterprise zones are designed to bring development to areas that otherwise would not attract it. As a result, the benefits associated with building in an enterprise zone are pretty generous: the business owner is entitled to an eighty percent tax break for the first five years with the rate diminishing by ten percent in each successive year for five more years. The result is an estimated $64.5 Million in savings for Exelon due to the state enterprise zone. Tack that onto the $155 Million in Tax Increment Financing (TIF)  the City has to spend to get Harbor Point ready for development, build open space and add roads to the site. That’s quite a bill. Indeed, the amount of money being spent to develop a parcel that should sell itself has many Baltimoreans up in arms, and rightfully so. It’s hard to believe that no one saw this coming. When development trends showed that Harbor East and Harbor Point were becoming desirable locations for development, why didn’t anyone remove these areas from the list of state approved enterprise zones? This particular lapse in oversight is a costly one.

Raise Your Hand if You’re Surprised:

Given what development trends in Baltimore have looked like over the past ten years and the amount Exelon stands to save on taxes, it really shouldn’t come as any surprise that Exelon selected Harbor Point. Even without the development trends and the tax-related savings, Harbor Point is still an amazing site. It’s surrounded on three sides by water and it sits between Fells Point and Harbor Point two of Baltimore’s most desirable locations. The site is also a whopping 27 acres, allowing Exelon’s imagination to run wild. Some criticize how Exelon selected its site, charging they sought features one would expect in a suburban location including ample parking spaces and open space. These criticisms shouldn’t hold much water as they are features every good developer wants.

The fact of the matter is, Exelon got a great deal on a great site. City and State government reacted too slowly to real estate trends to take advantage of Harbor Point as a source of tax revenue. The real question is, has our government learned from this mistake? The State and especially the City cannot afford to make such huge concessions to developers.

Something to Look Forward to:

A large part of Baltimore’s transformation has been taking industrial sites and making them into developable land for retail and office space. Until 1985, Harbor Point was the site of Allied Chemical’s chromium factory.

A view of Harbor Point when Allied Chemical still had a factory on the site.

In 1999, the Environmental Protection Agency completed a cleanup of the site which resulted in a “cap” being placed over the top of the site, preventing rain water from leaching chromium into the harbor.

What Harbor Point looks like today, as seen from the top of the Legg Mason building in Harbor East

When completed, the site is expected to include about 1 Million square feet of office space, 150,00 sq. ft. of retail, 600 residences, 250 hotel rooms and 3,000 parking spaces. Exelon’s building is expected to earn a LEED Platinum rating, the highest available award for green building. The site will also include 11 acres of open space.

An artist's rendering of the proposed development at Harbor Point, courtesy of Harbor Point Development

The site plan for Harbor Point, including the waterfront promenade and a lacrosse field

Despite the lost tax revenue, in the long run this project should be good for the City. As Harbor Point is the last developable waterfront property, investment should shift back North and West toward the City’s core, which will strengthen as a result. Short term benefits include thousands more people coming “downtown” every day to work, eat and, hopefully, live.

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