Baltimore Sun: City Council Proposes Tax Relief to Suffering Millionaire Developer, Investment Bankers Click HERE to Bring Up Full Post

Baltimore Sun, June 2, 2007:

A leading Baltimore developer would receive more than $33 million in city tax breaks to build a landmark headquarters for Legg Mason at an exclusive waterfront address, officials close to the proposed deal confirmed yesterday.

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As (developer) Paterakis developed Harbor East over the past decade, he benefited from tax breaks on nearly every phase of the project. The development transformed what was once an industrial no man's land to one of Baltimore's trendiest areas, with a Whole Foods market, expensive boutiques and exclusive apartments and condos.

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Legg Mason announced in February that it planned to leave its signature skyscraper at 100 Light St., the tallest building in the city, for the new Harbor East digs. Legg expects to move nearly all of its Baltimore-area employees to the new building by 2009, creating a significant vacancy in its former home in downtown's core.

Okay, for out-of-state readers, a geography lesson.

Legg Mason has employees in two buildings: the Legg Mason tower at 100 Light Street and elsewhere in Baltimore. At one point, and I believe (but not been able to verify) now, Legg had 500-odd employees in an office complex about the Gallery at Harborplace, a former property of the Rouse company generally credited with turning the Inner Harbor from a fetid dump into a thriving tourist destination.

Legg had a lease in the Gallery building with Rouse until 1998. I cannot find whether they are still there, and if so in what capacity. You would think in 2007 with Google that you could type in an address and find out whether one of the world's leading financial services companies was still leasing space there for 500 employees. But I cannot confirm that. In any event, the Legg Mason Tower at 100 Light Street and the Gallery at Harborplace at 200 Pratt are across the street from one another.

I lack the patience to mess with Google's API for maps today, but here is a link to the relevant neighborhood. The two building currently (I believe) used by Legg are about a block and a half, maybe two blocks from Baltimore's Metro and 4-5 blocks from the hapless light rail. The move would be over to the discussed new, tax-subsidized/exempted building on Aliceanna Street which faces the harbor on the extreme SE corner of the Harbor. The neighborhood around the office complex is Little Italy - a great neighborhood though with limited parking. No currently built public transit other than buses comes within 6 blocks of this location. It is, however, arguably more convenient to the mouth of the north-south Jones Falls Expressway, and future transit improvements will likely include Harbor East, Fells Point and Little Italy with the proposed East-West Red Line.

Baltimore City has the highest property taxes in the state by a factor of more than 2. DLA Piper Rudnick, formerly the largest law firm in downtown Baltimore, moved out to semi-suburban Mount Washington on the County side of the City-County line that bisects that neighborhood. Downtown City aggravations including taxes were so severe that Piper decided to move most of its operations into a leafy enclave far removed from every other law firm, every courthouse, every law library and every provider of law firm support services to get away, moving about 200 yards north of the City-County line. Baltimore's legal community lives (as opposed to works) disproportionately north and northwest of the City, so cutting the commute out may have been a big factor as well in the decision. (Interestingly, the senior partner at Piper Paul Tiburzi, Esq., represents Legg.)

It's hard for me to be sympathetic to the idea of giving a massive tax break to a large corporation to move 12 blocks around the harbor when every middle-class homeowner gets no such break. It's literally regressive taxation: the poorer you are, the more you pay, and if you are very rich and have "juice" in the City Council, you come closer to taxing them than the other way around, it appears.