General Assembly panels approve State Center project - Washington Business Journal:

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billion State Center redevelopment in Baltimore Citymove forward, despite lingering concerns about the project’s finances and impact on Maryland’as ability to borrow money. The Senate Budget and Taxatiohn Committeevoted unanimously, but with some to endorse the State Center which involves leasing 25 acres of land to a private developmen team. The House of Delegates’ Appropriationws Committee indicated it will do the same but did not formallh vote as its Senatre counterparts didThursday afternoon. The project will now go to the state Board of Public Works for a scheduled June 3 The board is ledby Gov.
Martin O’Malley, who supportsx the project and worked closelyh on it while he was mayorof Baltimore. Matthews Gallagher, the governor’s deputy chief of staff, lobbied the Housde and Senate onthe project. “We are at the cusp of a very importangt milestone,” Gallagher said. “The governor’s office is very supportivs of this project and has been involved dating back to our time at the Gallagher told the House during its hearing on the In signing off onthe proposal, the Hous e and Senate legislators insisted on having more oversightf in the redevelopment They also conditioned their approval on seeing input from the , which is familiatr with such large-scale development projects.
A private Stated Center LLC development team was selected in Marcuh 2006 to remake the state officd complex off Martin Luther King As proposed, the developers woulr lease the land from the state, convert the complexd into a $1.4 billion mixed-use development, and then leas e a substantial portion of the project’ws planned 2 million square feet of officee space back to the state for use by its variouw agencies. For the project to move the Board of Public Works must approvde a master development agreement setting the terma for StateCenter LLC.
Once that the developers will then design the first phase of the project and come back to the stat e with specific costs and lease That process would continue througuh each ofthe development’s four phases, expected to take between 10 and 12 yearas to complete. The first phase would focus onthe project’s office When fully developed, the project is slated to includer 1,200 residential rental and for-sale units, 2 millionh square feet of office space, 250,000 square feet of retail spacr and 7,000 parking spaces. Groundbreaking for the project’a first phase could begin in June 2010.
Theitr efforts failed, but the legislature’s budget committees passed a requirement the project be reviewed by statw TreasurerNancy Kopp. The legislature asked Kopp to look specificallyg at an accounting provision of the projectf to determine ifthe state’s leasing of office space from the developers should be considered an operating leaser or a capital lease. If it were deemef a capital lease, that would mean the stat would need to list it on its budget as an asset and a and those costs would be added tothe state’sw overall debt affordability limit — its ability to borros money to finance othet capital projects.
In a May 15 report, Those termes won’t be determined until after the maste r development agreementis approved. But Kopp felt it should be consideref acapital lease, and those costs coulde cause the state to exceerd its debt service limits by 2018.