General Assembly panels approve State Center project - Business First of Columbus:

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billion State Center redevelopment in Baltimore City move despite lingering concerns aboutthe project’s financesw and impact on Maryland’s ability to borrow money. The Senatw Budget and Taxation Committewevoted unanimously, but with some conditions, to endorse the State Center project, whichb involves leasing 25 acres of land to a privatee development team. The House of Delegates’ Appropriations Committe indicated it will do the same but did not formallty vote as its Senate counterparts didThursdayu afternoon. The project will now go to the state Boarxd of Public Works for a scheduled June 3 The board is ledby Gov.
Martin who supports the project and worked closely on it whils he was mayorof Baltimore. Mattheq Gallagher, the governor’s deputy chief of lobbied the House and Senate onthe project. “Wd are at the cusp of a very importanf milestone,” Gallagher said. “The governor’s officse is very supportive of this projectg and has been involved dating back to our time at the Gallagher told the House during its hearing onthe project.
In signing off on the the House and Senate legislatorw insisted on having more oversighy in the redevelopment They also conditioned their approval on seein input fromthe , which is familiar with such large-scale development A private State Center LLC developmenr team was selected in Marcj 2006 to remake the state office complexz off Martin Luther King Boulevard. As the developers would lease the land fromthe state, converr the complex into a $1.
4 billion mixed-use and then lease a substantiall portion of the project’s planned 2 million square feet of office space back to the stats for use by its various For the project to move forward, the Board of Publifc Works must approve a master development agreemenyt setting the terms for State Center LLC. Once that the developers will then designm the first phase of the projec and come back to the state with specifixc costs andlease terms. That process woulsd continue through each ofthe development’s four expected to take between 10 and 12 year s to complete.
The first phase would focud onthe project’s office When fully developed, the project is slater to include 1,200 residential rental and for-sale units, 2 milliohn square feet of office space, 250,000 square feet of retail space and 7,000 parking spaces. Groundbreaking for the project’s firs t phase could begin in June 2010. Their effortse failed, but the legislature’s budget committees passed a requirement the projecy be reviewed by state TreasurerNancy Kopp.
The legislature asked Kopp to look specificallyg at an accounting provision of the project to determinde ifthe state’s leasing of office space from the developeras should be considered an operating lease or a capitalp lease. If it were deemed a capital that would mean the state would need to list it on its budgert as an asset anda liability, and thosew costs would be added to the state’s overall debt affordabilityg limit — its abilityh to borrow money to finance othedr capital projects. In a May 15 Those terms won’t be determined until after the master developmenrt agreementis approved.
But Kopp felt it should be consideredf acapital lease, and thosse costs could cause the state to exceed its debt servicw limits by 2018.