The United Workers (UW) step back from a recent battle over one of the largest Baltimore City give-aways to a private developer, and critique the deal in a Baltimore Sun Op-Ed, using human rights principles. The city subsidy, a $108 million bond financed by Tax Increment Financing (TIF), will be used to build a 23 story tower in the downtown waterfront area that will house Exelon's headquarters and Morgan Stanely. UW's Fair Development campaign, which includes UNITEHERE Local 7 as well as community and faith groups, forced the secretive Baltimore Development Corporation (BDC) to reveal that the bond did nothing more than increase the rate of profit on the project from 9% to 14%. Despite the public outcry, the Baltimore City Council approved the give-away on September 9, 2013. The UW's op-ed was published four days later.
Harbor Point and 'fair development'
Baltimore's backward priorities are on display with the approval of tax incentives for waterfront development
By Michael Fox and Rachel Kutler
5:04 p.m. EDT, September 12, 2013
The City Council's approval of tax increment financing for the Harbor Point development on Monday night is yet another example of our city's failing development trends — funneling public resources toward private developments while our communities are in need of housing, livable incomes, fire stations, rec centers and schools. In the past year alone, the city has privatized or closed two fire stations and 20 recreation centers. In a blatant display of the city's skewed priorities, in February, the city refused to house the 14 individuals sleeping under the Jones Falls Expressway, while nearly 40,000 homes remain vacant. Children are losing safe places to play, homes are boarded up, families are on the streets, and residents are in need of good jobs. Instead of resolving these problems, city leaders are giving a massive handout to big developers. This model has failed. We need something new.
For several years, the United Workers has been fighting for "fair development," a policy in which community needs are valued over private gain. Development should promote good jobs for city workers and meet all residents' needs. It should be transparent, accountable, and ensure that citizens have full access to participation. That is fair development — a way to ensure that everyone benefits, not just wealthy developers and powerful companies. How does the Harbor Point TIF deal hold up to these principles? Here's what we found. You be the judge.
•Transparency: The decisions for the Harbor Point TIF were largely made behind closed doors with little to no input from the community. In fact, the city's Board of Finance was found guilty of violating transparency laws by keeping a key meeting on May 20 closed to the public. Little information was provided to the community about the negative impacts of the foregone property taxes on the city's general fund until the discussion was raised in relation to school system funding at an August 7 hearing.
•Participation: The general public was left out of the decision-making from the very beginning. By the evening of July 17, when residents were first permitted to publicly testify on the project, Mayor Stephanie Rawlings-Blake had already presented her endorsement of the TIF to the Board of Estimates. City Council president Bernard C. "Jack" Young explained that prior to that night's hearing he already had enough votes for passage. Groups near the proposed development, such as the Perkins Homes Residents' Association and the Fells Point Residents' Association, vocalized their opposition or concerns about the project, only to be overlooked by decision-makers.
•Equity: Is this deal prioritizing those most in need? There has been a lot of talk about jobs (probably to soften the blow of doling out the second largest TIF in Baltimore history). Unfortunately, the permanent jobs that will be created by the Harbor Point development will likely be typical of employment throughout the Inner Harbor area: low-wage, temporary and unstable. According to our Spring 2011 Fair Development Report, "Hidden in Plain Sight," wages at the Inner Harbor were some of the lowest in the city — averaging less than $9 per hour — and very few jobs provided health benefits. UNITE HERE Local 7 proposed an amendment to ensure a labor peace deal for the proposed hotel for Harbor Point, but it failed to get enough City Council support.
•Universality (this is the not-so-radical idea that development should benefit everyone): Over the last 50 years most of the city's development agenda has focused on the downtown and waterfront area. This has prompted glowing reports of city rebirth, however it has completely ignored both the area's working conditions and our neighborhoods. While Harbor Point may get pristine waterfront views and office towers, communities from Highlandtown to Brooklyn contend with decades of austerity and cuts to recreation centers, fire stations and other public goods. Harbor Point is more of the same. The anger over the Harbor Point deal is rooted in this growing polarity between the "two Baltimores."
•Accountability: The Harbor Point TIF deal contains no provisions for reporting on the key claims of its backers. Unfortunately this is typical of the closed-door culture of the Baltimore Development Corporation and the mayor's office. The Fair Development Campaign proposed an amendment to the TIF legislation that would mandate the city Finance Department to submit an annual report accounting for any gains or losses in the tax base, losses or gains in businesses, the affects on housing in the area (such as displacement), and job quality. Other than Councilman Carl Stokes, not a single council member publicly supported this amendment.
We have seen successes in Baltimore — companies that begin to adopt fair development principles while also meeting their bottom lines. The Sheraton hotel recently agreed to a new collective bargaining contract, ensuring increased workers' rights, benefits and wages. The upcoming Horseshoe Casino has pledged to hire locally and is in final negotiations with several unions over a fair process to organize. How about public financing for rehabilitation of vacant housing? Imagine how that would increase homeowner equity and focus much needed attention toward resolving the huge housing problem in Baltimore. Rather than bend our democratic processes to ensure developers get more than 9 percent profit, rehabbing vacant housing could mean literally thousands of homeowners would increase their wealth, renters would have more options, and the homeless would have a place to call home. It is time for a new principled approach to development.
Development should lift all boats. But it can only do that if the city puts people first. Instead of handouts to wealthy developers, let's imagine what $107 million could do for our communities.
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