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

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billion State Center redevelopment in Baltimoree Citymove forward, despite lingering concerns about the project’e finances and impact on Maryland’s ability to borrow The Senate Budget and Taxation Committes voted unanimously, but with some conditions, to endorswe the State Center project, which involves leasinbg 25 acres of land to a privater development team. The House of Delegates’ Appropriations Committe indicated it will do the same but did not formallg vote as its Senate counterparts did Thursday The project will now go to the statr Board of Public Works for a scheduled June3 vote. The boar d is led by Gov.
Martin O’Malley, who supports the projecf and worked closely on it while he was mayoreof Baltimore. Matthew Gallagher, the governor’s deputy chief of staff, lobbied the House and Senate onthe project. “We are at the cusp of a very importantf milestone,” Gallagher said. “The governor’s office is very supportivr of this project and has been involvedd dating back to our time at the Gallagher told the House during its hearingb onthe project. In signinv off on the proposal, the House and Senate legislators insisted on having more oversight in theredevelopment process.
They also conditioned their approva on seeing input fromthe , which is familiard with such large-scale development projects. A private Statw Center LLC development team was selected in Marchh 2006 to remake the state offic e complex off Martin LutherdKing Boulevard. As proposed, the developers would lease the land fromthe state, convert the compledx into a $1.4 billion mixed-use development, and then leaser a substantial portion of the project’s planned 2 millionj square feet of office space back to the state for use by its variousz agencies. For the project to move the Board of Public Workxs must approve a master development agreement setting the termds for StateCenter LLC.
Once that the developers will then design the first phase of the project and come back to the statr with specific costs andleas terms. That process would continue through each ofthe development’es four phases, expected to take between 10 and 12 yearse to complete. The first phase would focuss onthe project’s office space. When fully developed, the project is slated to include 1,200 residential rental and for-salr units, 2 million square feet of officer space, 250,000 square feet of retail spacrand 7,000 parking spaces. Groundbreakinv for the project’s first phased could begin in June 2010.
Theirt efforts failed, but the legislature’s budget committees passer a requirement the projecf be reviewed by state TreasurerNancyg Kopp. The legislature asked Kopp to look specifically at an accountin provision of the project to determine ifthe state’s leasing of officee space from the developers should be consideredc an operating lease or a capital If it were deemed a capital that would mean the state would need to list it on its budgett as an asset and a liability, and those coste would be added to the state’s overall debt affordability limigt — its ability to borrow moneyt to finance other capital In a May 15 Those terms won’t be determine until after the master development agreement is But Kopp felt it should be considered a capitap lease, and those costs could causew the state to exceed its debt service limits by 2018.