Council Wants Lower Threshold for Developer Tax Incentives

The City Council wants state lawmakers to change the law to allow smaller developments outside of designated urban renewal zones access to special tax incentives.

Payment in lieu of taxes, or PILOTs, allows the city to reduce real estate taxes on a project for a period of time, and accept a negotiated payment instead, making development in the city more attractive.  

These incentives have been criticized as a handout to developers to encourage building in all ready thriving parts of the city, such as Harbor East.

But on Thursday the council passed a resolution calling on state lawmakers to pass legislation allowing the city to grant the incentives to smaller neighborhood based projects.

Currently, to qualify for a payment in lieu of taxes, a project must be built in one of the city’s nine designated urban renewal zones, such as Camden Station, Harbor East and Market Center.

The projects also must meet certain financial requirements such as a private capital investment of $20 million for a hotel, a $10 million investment for a retail center and $5 million investment for a housing development, according to the Baltimore Development Corporations website.

The council's resolution is calling on state lawmakers to create a waiver process so the Board of Estimates can grant payment in lieu of taxes to projects that don't meet the current criteria under state law.

"This simple change to State law for deserving projects—ones that the City Council has approved through a resolution supporting the project—would allow Baltimore the flexibility it needs to support the most effective development projects city-wide, rather than just the largest," the resolution's sponsor Councilman Bill Henry wrote in an email to his colleagues. 

Councilwoman Mary Pat Clarke and Councilman Carl Stokes, who also represnt parts of North Baltimore, were cosponsors of the resolution.

Del. Shawn Z. Tarrant, District 40, said he thinks the city's delegation in Annapolis would be willing to consider creating legislation to make the changes sought by the City Council.

"I think that anytime you can do things on a smaller scale and help out individual neighborhoods we want to accomplish that," Tarrant said.

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