It’s been five years since Under Armor’s Kevin Plank dangled the Port Covington Project in front of Baltimore and city leaders.
Now it feels like we’ve been fished, and we’re not talking about fishing mustache fish with rod and reel. We mean the modern term “cat fishing” – the act of luring someone into a relationship for personal gain with the help of a fictional online person.
Port Covington was hailed as “Dubai on the Patapsco” after Plank revealed that he was inspired to undertake the massive development on the waterfront after a trip to this sparkling city of skyscrapers, improbably rising in the desert on the Persian Gulf.
Plank’s team, Sagamore Development, promised not only high-end living for the “creative class,” but tens of thousands of jobs for a struggling city. Newspaper, television and social media ads showed the project as part of an epic heroic revival of the city.
Skeptics feared the project would resemble the real Dubai, an affluent enclave served by poorly compensated workers who have come in from crumbling neighborhoods.
Baltimoreans from all walks of life came together on a model of democratic engagement to weigh the merits of his plan.
It was about a $ 660 million (TIF) tax increase financing package – an investment of nearly $ 1 billion for taxpayers with interest – that Plank wanted to use to transform the developed land he had acquired.
Fast forward to today.
Reduced circumstances
Little of the plan that was originally sold to the city guides remains.
The promised “glittering city within a city” is currently being prepared with the first tranche of $ 148 million for a group of uninspired medium-sized buildings near Plank’s Sagamore Spirit distillery.
Under Armour’s meteoric rise also proved too good to be true.
At a time when Plank was selling his vision of a five-fold increase in Under Armor jobs, his company was manipulating sales to mislead investors, according to the Securities and Exchange Commission, which fined UA $ 9 million.
Last month, the sportswear maker announced that it was reducing its headcount from 1,900 to 1,000 in connection with the move of its Tide Point offices to Port Covington.
In other words, there will be no new jobs on any future UA campus, and so far no other company has signed a lease for the first phase of the Port Covington office space.
Additionally, Sagamore is no longer the developer. Plank, whose credibility and personal wealth once underpinned the entire project, is now just a minor investor in what is known as a joint venture, Baltimore Urban Revitalization LLC.
His promise to buy the TIF bonds when needed is long forgotten, like much else, as Under Armor’s fortunes have changed. Even the feasibility of the Community Benefits Agreement and its other promises to the predominantly black communities near the site are questionable.
The protesters turned down a TIF grant that they said would benefit Under Armor CEO Kevin Plank, but not most Baltimoreans. (Fern Shen)
Unanswered questions
Many of us saw this coming. In the summer of 2016, hundreds of Baltimore residents and activists packed the War Memorial auditorium for a series of “working sessions” convened by then Councilor Carl Stokes, chairman of the City Council’s Economic Development Committee.
Residents had done their homework and asked difficult questions about feasibility and legal compliance.
• They asked why the city is rushing to pursue the TIF without thorough due diligence.
• You asked whether job and sales forecasts are based only on best-case scenarios.
• They wondered about unintended consequences, such as whether the city’s borrowing capacity and government funding for education would be affected.
• You noticed that there was no market study showing demand for luxury apartments or for new office space in the millions when commercial occupancy was so low in downtown Baltimore?
However, questions mainly focused on how long suffering communities in South Baltimore and across the city would benefit from public investment in what was increasingly viewed as a “playground for the rich”.
For example, why did only a third of the planned jobs in Port Covington go to city dwellers? Why had Plank been exempted from the city’s Inclusive Housing Act?
Details such as the “archaeological pier” proposed by the development team and the “world-class kayak launch” only confirmed their suspicions.
Residents questioned the assumption that even if things went as promised, real benefits from Port Covington would flow to the neighborhoods where they lived. Desiring to be both helpful and critical, they presented alternative versions of just development.
Red flags
To the extent that city officials answered these questions at all, they had few answers.
Chairman Stokes’ working sessions eventually resulted in the negotiation of a welfare agreement in which Plank and Sagamore pledged to raise $ 10 million for the six South Baltimore parishes across the middle branch, and based on modest changes in an earlier Memorandum of Understanding agreed (letter of intent) with the city.
In September 2016, when city council voted to approve the TIF for $ 660 million, city officials pledged to conduct a full “due diligence” on the project’s financial feasibility prior to issuing the first tranche of bonds. Of course that never happened.
Opinions still differ as to whether taxpayers will be at stake if the project fails. In the original proposal, Planks Sagamore Development had pledged to buy all bonds issued by the city itself.
This seemed to allay the concerns of the Baltimore Development Corporation (BDC), but in hindsight the fact that Baltimore taxpayers are acting as front men to provide cheaper funding for Plank and its employees should have raised another red flag.
Seconds after Carl Stokes told reporters he was a supporter of the Port Covington TIF, he clasped the developer’s attorney, Jon Laria. (Fern Shen)
Rethink trickle down
So what now?
Before the Board of Estimates approves another tranche of debt for a private real estate project in Baltimore, its three elected officials – Mayor Brandon Scott, Council Chairman Nick Mosby, and Comptroller Bill Henry – should publicly reassess the priorities and review the processes involved in the project have led to debacles in Port Covington.
Why, as councilors, were they so easily influenced by Plank’s grandiose vision that they lost track of basic economics and common sense? (Scott and Mosby approved the 2016 TIF editions, while Henry abstained).
How did it come about that hundreds of citizens with little access to the financial details were able to point out the shaky assumptions and overlooked omissions in the proposal?
Are we basically going to get stuck in the same trickle-down paradigm that deepened Baltimore’s social rifts and did little to contain ongoing population decline?
What better way to create a fairer economy and a better quality of life across the city?
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• Charly Carter and Barbara Samuels are residents and activists of Baltimore who were part of the PORT 3 coalition that opposed the TIF. Carter can be reached at [email protected].