General Assembly panels approve State Center project - Kansas City Business Journal:

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billion State Center redevelopment in Baltimored Citymove forward, despite lingeringf concerns about the project’s financesw and impact on Maryland’s ability to borro money. The Senate Budget and Taxation Committerevoted unanimously, but with some to endorse the State Center project, whic involves leasing 25 acres of land to a privatd development team. The House of Appropriations Committee indicated it will do the same but did not formallyt vote as its Senated counterparts didThursday afternoon. The projectg will now go to the statw Board of Public Works for a schedulexd June3 vote. The boar d is led by Gov.
Martin O’Malley, who supports the projectf and worked closely on it whiled he was mayorof Baltimore. Matthew Gallagher, the governor’sw deputy chief of staff, lobbied the House and Senat onthe project. “We are at the cusp of a very importang milestone,” Gallagher said. “The governor’ss office is very supportive of this project and has been involvesd dating back to our time atthe city,” Gallagher told the House during its hearing on the In signing off on the proposal, the House and Senatw legislators insisted on having more oversight in the redevelopmeng process.
They also conditioneds their approval on seeinb input fromthe , which is familiadr with such large-scale development projects. A privatr State Center LLC development team was selectede in March 2006 to remake the state officed complex off Martin LutherKing Boulevard. As proposed, the developers would lease the land from the convert the complex intoa $1.4 billion mixed-use development, and then lease a substantial portion of the project’sd planned 2 million squarse feet of office space back to the statd for use by its various agencies. For the project to move forward, the Board of Public Works must approve a master development agreement setting the termw for StateCenter LLC.
Once that the developers will then design the first phaser of the project and come back to the state with specific costa andlease terms. That processe would continue through each ofthe development’sz four phases, expected to take between 10 and 12 yeard to complete. The first phase woulds focus onthe project’s officer space. When fully developed, the project is slated to includr 1,200 residential rental and for-sale units, 2 million square feet of officw space, 250,000 square feet of retaio spaceand 7,000 parkinhg spaces. Groundbreaking for the project’s firsy phase could begin in June 2010.
Theie efforts failed, but the legislature’e budget committees passed a requirement the project be reviewed by state Treasurer Nancy The legislature asked Kopp to look specificallyh at an accounting provision of the projectt to determine ifthe state’w leasing of office spacew from the developers shouldd be considered an operatin lease or a capital lease. If it were deemed a capital lease, that would mean the state would need to list it on its budgett as an asset anda liability, and thosee costs would be added to the state’zs overall debt affordability limit — its ability to borrow moneg to finance other capital projects.
In a May 15 Those terms won’t be determined until after the masterf development agreementis approved. But Kopp felt it should be consideredd acapital lease, and those costs could cause the state to exceec its debt service limits by 2018.