This Week's Baltimore Deal Sheet
The Baltimore City Comptroller’s office has recommended substantial changes to how the city negotiates Payment In Lieu of Taxes agreements that would spare nonprofits from paying more than $97M in property taxes annually.
The recommendations include the city insisting on the ability to adjust payments for inflation annually, track and publish nonprofit PILOT payments and allow for adjustments when an organization acquires or relinquishes a property.
“Non-profits provide critical resources to our residents. They also are a huge burden on the general fund. We need to change the way we approach this problem,” Comptroller Bill Henry said in a statement.
Baltimore is home to 20% of Maryland's nonprofits. Those nonprofits, such as Johns Hopkins University and Johns Hopkins Medical System, are among the city’s largest property owners.
That concentration of nonprofit landowners significantly reduces the city’s property tax revenues, its most significant funding source. Meanwhile, to offset some of those losses, the city charges residential and commercial property owners the highest property tax rate in Maryland.
In 2016, the city negotiated its latest 10-year PILOT deal with its 14 largest nonprofits.That pact has resulted in Baltimore collecting a combined $6M annually while those organizations use an estimated $47.6M in city services yearly.
According to the comptroller's office, if those institutions paid their full property taxes, they would pay more than $103.8M annually.
SALES
New Jersey-based real estate investment group Faropoint has purchased 2915 Wilmarco Ave. in Baltimore, a single-story 62K SF warehouse, for $6.9M. The firm focuses on last-mile industrial properties, and the Wilmarco Avenue property provides more than 3 acres of land, a building with 16-foot clear ceiling heights, eight dock doors and two drive-in doors. Patrick Smith and Chris Boland at MacKenzie Commercial Real Estate Services LLC represented the buyer. Jonathan Carpenter and Graham Savage of Cushman & Wakefield represented the seller, 2915 Wilmarco Avenue LLC.
DEVELOPMENT
Baltimore Mayor Brandon Scott touted his administration's commitment to inclusive developments on Tuesday during his State of the City address, which occurred before the Key Bridge collapse early Wednesday morning.
Scott trumpeted actions, such as investing $12M in the long-stalled Uplands development, to prove his commitment to equitable investment. The mayor also said the city’s downtown is at a crossroads and called for public investment in the city’s traditional central business district.
“Too often in Baltimore’s history, there has been a division between Downtown and the rest of our neighborhoods,” Scott said. “But we know that one cannot thrive without the other. That’s why we are investing in both.”
Scott also reiterated his support for MCB Real Estate’s controversial plans to redevelop Baltimore’s Inner Harbor. In his prepared remarks, Scott called MCB Real Estate’s co-founder, P. David Bramble, “my West Baltimore brother.”
“[Bramble’s] work with Harborplace will breathe new life into our downtown. After languishing in receivership for years, Dave and his team stepped up to finally make a change,” Scott said.
THIS AND THAT
David Rubenstein officially took over as the owner of the Baltimore Orioles on Wednesday and told The Baltimore Sun, “The Orioles will be there as long as there’s Major League Baseball.” Rubenstein, co-founder of investment firm The Carlyle Group, doesn’t plan to invoke an opt-out clause in the lease extension at Oriole Park in Camden Yards, the Sun reported.
Instead, Rubenstein, who along with his fellow investors paid $1.7B for the team, said he intends to negotiate a development rights agreement with the city and commit the team to the entire 30-year lease. Before Rubenstein purchased the team, the O’s signed a new lease for the park after its previous 30-year contract expired at the end of last year. The new deal included a club option to terminate the lease extension after 15 years.
