Towson Row To Receive $43M Advance From Baltimore County

TOWSON, MD — The Baltimore County Council reportedly approved a financial incentive package for the developers of Towson Row. The construction project on Chesapeake Avenue has been dormant for months after those working on the site literally ran into a barrier (rock) and had to reconfigure the design.

The plan was to construct retail, residences, office space and a Whole Foods in the heart of downtown Towson. Once the plans had to be redone, the development stalled and Greenberg Gibbons signed on to help Caves Valley with the project, which spans 5 acres near York Road, Towsontown Boulevard, Washington Avenue and Chesapeake Avenue.

Baltimore County Executive Kevin Kamenetz proposed offering a $43 million advance to help get the project off the ground.

The proposal passed Monday night, with council members voting 4-3 to approve it; the Democrats on the council all supported the package, while the Republicans voted against it, according to The Baltimore Sun.

The county commissioned a study by the Sage Policy Group, which found the government would recoup its costs in 12 to 14 years. The project would create 5,500 permanent and construction jobs and $220 million in annual business activity, the study said.

“The results of this study clearly demonstrate Towson Row’s tremendous employment and economic impact, not only for downtown Towson, but for the entire Baltimore region,” Kamenetz said in a statement.

A news release from Baltimore County explained the proposal for the advance as follows:

Under long-established County law, the project is entitled to Commercial Revitalization tax credits for constructing in a designated revitalization district and High Performance Building tax credits. The developer is forgoing these tax credits and would receive the $26.5 million present value of the taxes as the project is constructed. The developer will continue to pay property taxes.

When the new downtown Towson hotel begins construction, the County would provide a $16.4 million grant equal to the hotel tax. These funds will be repaid to the County through the hotel occupancy tax.

The County will recoup its total project support in 12-14 years, as property and hotel taxes are collected. Once economic multipliers are factored in, the payback period is even shorter, according to the Sage Policy Group study.

The arrangement grants the developers a $43,016,785 advance to start construction by June 2018.

Lawmakers in Baltimore County were not so sure the project was a sure bet, and residents questioned whether it was the place of government to intervene in the market. More than 10 community members attended a work session last week with signs protesting what they said was "developer welfare," according to The Baltimore Sun.

Councilman David Marks, whose district includes Towson, asked at the Dec. 12 work session whether it was wise to bank on the success of the project, particularly the hotel, since hotel and property taxes would be essential for the county to recoup its investment.

He alluded to Baltimore City's investment in a hotel, which resulted in a financial loss to that jurisdiction. He was referencing the city-owned Baltimore Hilton, which the Baltimore Business Journal reports has lost more than $80 million since Baltimore financed it in 2008.

The Towson market "is starving for the hotel," said economist Anirban Basu, CEO of Sage Policy Group, commissioned by the county to conduct a study regarding the Towson Row proposal.

Basu said that Baltimore City was not a comparable market, since Towson was not saturated with hotels.

"In Baltimore County, where do people meet?" he said. "White Marsh, Pikesville....No guarantees here, but it seems to me quite likely that this hotel is a success,” Basu said at the work session.

Councilman Tom Quirk, whose district includes Catonsville, told The Baltimore Sun he was "confident" in the success of the project and predicts "Towson residents will be glad" once the project is no longer a "giant hole in the ground."

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Here is the proposal that was approved on Dec. 18:

Rendering courtesy of Greenberg Gibbons/Caves Valley Partners.