In sealing the latest development deal, the Baltimore City Council required that the firm also set aside millions for a community benefit fund. This requirement may set the standard in the City for tax increment financing (TIF) deals to come.
As reported in The Baltimore Sun:
“This is going to set the standard and the bar for TIFs to come,” City Council President Bernard C. “Jack” Young said. “Anybody that’s coming for a TIF is going to have to give something to the community. It’s going to have to be substantial. They’re asking for a lot of TIF money, they’re going to have to give us a lot for our communities.”
In recent years, tax increment financing deals have become the preferred vehicle for city development subsidies. Eleven such deals have been approved since 2003, requiring the city to float millions in bonds to pay for a development’s infrastructure needs. The city then uses the increased taxes from the development to pay off the debt, instead of committing that money to pay for other city services, such as schools or police.
Stokes said he agreed to move the subsidy forward only after the developer and surrounding communities signed a community benefits agreement. The agreement establishes a community fund of more than $1 million that would grow each year with contributions from the university and Wexford. The money is intended to help address parking problems, the development of Hollins Market and job creation, among other community concerns. Stokes said the fund will ultimately grow to about $4 million.
For more information read the full article in The Baltimore Sun.