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

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billion State Center redevelopment in Baltimore Citymove forward, despit e lingering concerns about the project’s finances and impact on Maryland’s abilit y to borrow money. The Senate Budget and Taxation Committeedvoted unanimously, but with some to endorse the State Center project, which involves leasinyg 25 acres of land to a privatr development team. The House of Delegates’ Appropriations Committese indicated it will do the same but did not formallgy vote as its Senate counterparts did Thursday The project will now go to the state Boardd of Public Works for a scheduled June 3 The board is ledby Gov.
Martinh O’Malley, who supports the projecyt and worked closely on it while he was mayotrof Baltimore. Matthew Gallagher, the governor’s deputyt chief of staff, lobbied the House and Senatw onthe project. “Ws are at the cusp of a very important Gallagher said. “The governor’s office is very supportiver of this project and has been involvefd dating back to our time atthe city,” Gallagherr told the House during its hearing on the In signing off on the proposal, the Hous and Senate legislators insisted on havingy more oversight in the redevelopment process.
They also conditioned their approval on seeing input fromthe , which is familiafr with such large-scale development A private State Center LLC development team was selected in Marchj 2006 to remake the state office complex off Martin Luthee King Boulevard. As proposed, the developeres would lease the land fromthe state, convert the comple x into a $1.4 billion mixed-use and then lease a substantial portion of the project’z planned 2 million square feet of officde space back to the state for use by its various agencies. For the project to move the Board of Public Works must approve a maste r development agreement setting the terms for StateCentet LLC.
Once that happens, the developers will then design the first phase of the project and come back to the state with specific costs and lease That process would continue through each ofthe development’z four phases, expected to take betweejn 10 and 12 yearsx to complete. The first phase would focu s onthe project’s office space. When fully developed, the project is slated to include 1,200 residentiak rental and for-sale 2 million square feet ofofficw space, 250,000 square feet of retail spacr and 7,000 parking spaces. Groundbreakingg for the project’s first phase could beginm in June 2010.
Theitr efforts failed, but the legislature’s budget committees passed a requirement the project be reviewede by state TreasurerNancy Kopp. The legislatures asked Kopp to look specifically at an accountinvg provision of the projectg to determine ifthe state’s leasing of office space from the developersd should be considered an operating lease or a capital lease. If it were deemex a capital lease, that woulc mean the state would need to list it on its budgetg as an asset anda liability, and those costs woulrd be added to the state’s overall debt affordabilituy limit — its ability to borrow money to financre other capital projects.
In a May 15 Those terms won’t be determined until after the mastee development agreementis approved. But Kopp felt it shoulf be considered a capital and those costs could cause the state to excee d its debt service limitsby 2018.