How Montgomery County is dissing Baltimore on state historic tax credits

Baltimore City is one of the oldest major cities in the U.S. and as a (still) major port and onetime hotbed of manufacturing, it has both many old buildings and many large buildings. Large buildings and manufacturing complexes are perfect opportunities for what is called adaptive reuse. And it is adaptive reuse of old large buildings that is one of the only dependable and sustainable strategies for urban revitalization.

Particularly good resources on this subject are the books by Roberta Gratz, Cities Back from the Edge: New Life for Downtown and The Living City: How America's Cities Are Being Revitalized by Thinking Small in a Big Way and Changing Places: Rebuilding Community in the Age of Sprawl, co-authored by President of the National Trust for Historic Preservation, Richard Moe.

Because Baltimore City is one of the oldest major cities in the U.S. and because for more than 100 years it was the State of Maryland's major center for manufacturing, it has more old buildings and more large old buildings than any other jurisdiction in the State of Maryland.

So of course, Baltimore City will benefit "disproportionately" from the state historic tax credit program, simply on a basis of the inventory of possible projects.

According to this editorial from the Baltimore Sun, "Credits that work," I guess that doesn't sit too well with the Maryland House of Representatives chair of the Ways and Means Committee, Sheila Hixon, a representative from Montgomery County.

From the editorial:

What do you call an economic stimulus program that produces an $8.53 return on every dollar invested? A smashing success? The envy of the White House? The greatest idea government's had since the income tax refund? In Annapolis, they use quite a different title: Endangered. ...

Baltimore is not the only community to benefit from this economic revitalization engine - small towns from the Eastern Shore to Western Maryland have, too - but the city has clearly benefited the most. There are simply more opportunities to renovate historic (and undervalued) buildings in Baltimore than anywhere else in the state.

But even that fact works to Maryland's advantage. With some of the highest concentrations of poverty in the state, the city is also the ideal target for such investment. A report produced earlier this year by the Abell Foundation found that for every $1 million in tax credits, 72.5 jobs are created.

Yet over its 13-year history, the tax credit program has been treated like an unwanted stepchild by the state legislature. It's been capped and cut and tied up in red tape in order to reduce its cost and funnel more of the benefits to other jurisdictions. ...

Much of the opposition can be traced to one person, House Ways and Means Chairwoman Sheila E. Hixson, who hails from Montgomery County, a subdivision with far fewer historic rehabilitation projects than the city. Delegate Hixson might be convinced to extend the program beyond its 2010 expiration - but no doubt only in its current form. Gov. Martin O'Malley has sought to upgrade the program to add resources and reduce its waiting period (often of a year or more), but a measure to do so died late in the last legislative session.

Such a stand-off could stop the Baltimore economic renaissance in its tracks. As it is, a project like Tide Point could no longer qualify for the $17.7 million tax credit it actually received nearly a decade ago because the program has been scaled back so much. (It's down to a total of just $5 million for commercial projects during the current fiscal year).

Enough is enough. The state's budget crisis can't be used as an excuse not to renew the heritage tax credit program. The economic recession is proof of how much it's needed: Cutbacks to the program over the years have likely cost the city hundreds, if not thousands, of jobs.

Putting Baltimoreans back to work doesn't add to the state's long-term budget woes, it helps reduce them. More jobs not only means more people paying taxes, it results in fewer dollars needed in safety net programs.

If there's ever been a more successful economic development program undertaken in Maryland, we haven't seen it. That lawmakers would even consider abandoning a relatively modest tax credit that's spurred so much historic preservation and job-creation is stupefying even by State House standards.

This is one of the advantages that DC has in not being part of a state, it doesn't have to deal with the kind of horse trading, regional cheerleading, and other obstructions that come from intra-state competition. Although DC manages to mess things up in other ways, and intra-city competition and balancing spending amongst the eight wards of the city means that government funding gets wasted within in the city just as much as in other jurisdictions...

You'd think that it would be the policy of all the jurisdictions in Maryland to want Baltimore City to be economically healthy, rather than an economic drag on the rest of the state. (This comes from sprawl and the fact that the city is the place of residence for a significant plurality of the state's highest poverty households.)

I bet this is being held as a horse trade for the reduction of the income tax rate for millionaires, since Montgomery County has a plurality of the state's highest income households, and because it is alleged that the increase in the tax rate for the highest income households has led to some of those people moving out of state. (At present there is no data to show this is the case. It's all speculation.) See "Md. lost nearly 30% of millionaires last year" from the Sun.

Tide Point is one of the premier adaptive reuse projects in Baltimore, done by a company, Streuver Bros. Eccles & Rouse, that does spectacular work, but these days is in financial exigency, losing projects as a result of the real estate crash and the difficulty of landing new loans. Image by David Muse Photography.