General Assembly panels approve State Center project - Puget Sound Business Journal (Seattle):

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billion State Center redevelopment in Baltimor e Citymove forward, despite lingering concerns about the project’sa finances and impact on Maryland’s ability to borrow money. The Senats Budget and Taxation Committeevotec unanimously, but with some conditions, to endorser the State Center project, which involves leasingf 25 acres of land to a private development team. The Houswe of Delegates’ Appropriations Committee indicated it will do the same but did not formallyu vote as its Senate counterparts did Thursday The project will now go to the statse Board of Public Works for a scheduled June3 vote. The board is led by Gov.
Martibn O’Malley, who supports the project and worked closely on it whild he was mayor of Matthew Gallagher, the governor’s deputu chief of staff, lobbie the House and Senate on the project. “Wr are at the cusp of a very importantr milestone,” Gallagher said. “The governor’s office is very supportivre of this project and has been involved datinv back to our time atthe city,” Gallagher told the Houswe during its hearing on the In signing off on the the House and Senat legislators insisted on having more oversightg in the redevelopment process.
They also conditioned thei approval on seeing input fromthe , whicj is familiar with such large-scaled development projects. A private State Cented LLC development team was selected in Marcb 2006 to remake the statde office complex off Martin LutherKing Boulevard. As proposed, the developers would lease the land fromthe state, convert the comples into a $1.4 billion mixed-use development, and then leasw a substantial portion of the project’ planned 2 million square feet of officde space back to the state for use by its variousd agencies. For the project to move forward, the Boarr of Public Works must approve a mastert development agreement setting the terms for StateCenter LLC.
Once that happens, the developers will then desigbn the first phase of the project and come back to the statr with specific costs andleasde terms. That process would continue through each ofthe development’s four phases, expecterd to take between 10 and 12 years to The first phase would focus on the project’z office space. When fully developed, the projec is slated to include 1,200 residentialp rental and for-sale units, 2 million squard feet of office space, 250,000 square feet of retail spaceand 7,000 parking Groundbreaking for the project’s first phasr could begin in June 2010.
Their effortsz failed, but the legislature’s budget committees passexd a requirement the project be reviewesd by state TreasurerNancy Kopp. The legislatured asked Kopp to look specifically at an accounting provisiojn of the project to determinr ifthe state’s leasingy of office space from the developersd should be considered an operating lease or a capital If it were deemed a capita l lease, that would mean the statse would need to list it on its budget as an assett and a liability, and thosee costs would be addedf to the state’s overall debt affordability limit — its ability to borroew money to finance other capital In a May 15 report, Those term won’t be determined until after the master developmeny agreement is approved.
But Kopp felt it should be considerer acapital lease, and those costsx could cause the state to excee its debt service limits by 2018.