Payback Time for Baltimore
Only ten years ago visitors to Baltimore Harbor were greeted by the grim sight of industrial desolation and run-down docks. But, following a decade of intensive regeneration not only is the area now aesthetically pleasing and thriving, more importantly for the city it is generating a great deal of business and tourism revenue.
That’s great news for the Baltimore City Development Corporation (BDC) as they expect businesses in the Inner and East Harbor areas to soon follow the lead of Marriott which became the first enterprise to start paying profit-sharing revenues in early January.
The Inner Harbor, which borders downtown Baltimore, and the Ravens and Orioles Stadia, is now a huge draw for sports fans, conference attendees and business travelers due to the amount of quality hotels and facilities in the area. Much of that phenomenal success is down to the vision of the BDC who agreed a series of innovative tax breaks to businesses ten years ago, designed to stimulate major developments and investment around the Harbour. By redeveloping the area the city hoped to build on the number of tourists and business travellers they could attract from nearby Washington D.C., only an hour’s drive away.
Under the agreements businesses were given favourable benefits, such as minimal annual property tax for an agreed number of years in return for a percentage of future profits. Under these agreements certain thresholds must be reached before the profit share pay-outs kick in. However, only six years after its construction the Marriott Waterfront became the first hotel in Baltimore to pay out to the City’s Development Corp. under the profit-sharing agreements. The first payment, for the fiscal year of 2006, was paid in early January 2008 and amounted to a healthy $820,000.
M.J. Brodie, president of the BDC, was pleased to receive the payment so soon. He said: “They’re doing much better than original estimates, which is great news for the city. The deal is now starting to produce fiscal returns, besides the returns already provided in jobs and all sorts of taxes.”
In addition to the hotels in the harbour area constructed using Development Corporation cash, the hugely popular Power Plant, which incorporates the nation’s first ESPN Zone and a Hard Rock Cafe amongst other attractions, is also a beneficiary. Residential developments such as Spinnaker Bay luxury apartments and commercial developments, including the under-construction headquarters of Legg Mason, has resulted in the establishment of an upscale residential and business area in the once run-down harbour environs.
Indeed, the Power Plant development looks set to be the next to start paying out profit sharing revenues. Under its agreement with the BDC a 10-year rent break expires this year, and it must now start to pay 22 per cent of operating profit, after certain allowable deductions, starting in the fiscal year 2008 with the payment due in 2009.
Paul McIndoe is an online, freelance journalist and keen hillwalker. He lives in Scotland with his two dogs.
Article Source: ArticlesBase.com - Payback Time for Baltimore