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

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billion State Center redevelopment in Baltimore City move despite lingering concerns aboutthe project’sa finances and impact on Maryland’s abilityg to borrow money. The Senate Budget and Taxatiom Committeevoted unanimously, but with some conditions, to endorsde the State Center project, which involves leasing 25 acree of land to a private development team. The House of Delegates’ Appropriation Committee indicated it will do the same but did not formally vote as its Senatew counterparts didThursday afternoon. The project will now go to the statde Board of Public Works for a schedule June3 vote. The boarsd is led by Gov.
Martimn O’Malley, who supports the project and workefd closely on it while he was mayor of Matthew Gallagher, the governor’s deputy chief of lobbied the House and Senatwe on the project. “We are at the cusp of a very importantr milestone,” Gallagher said. “Thed governor’s office is very supportive of this project and has been involves dating back to our time at the Gallagher told the Houses during its hearing onthe project.
In signinyg off on the proposal, the House and Senate legislatoras insisted on having more oversight in the redevelopment They also conditioned their approvaol on seeing input fromthe , which is familiar with such large-scal development projects. A private State Centert LLC development team was selected in Marcyh 2006 to remake the state office complex off Martin LutherfKing Boulevard. As proposed, the developeras would lease the land from the convert the complex intoa $1.4 billion mixed-use development, and then leases a substantial portion of the project’s plannedr 2 million square feet of officre space back to the state for use by its variouzs agencies.
For the project to move forward, the Boarcd of Public Works must approvs a master development agreement settinyg the terms for StateCenter LLC. Once that the developers will then desighn the first phase of the project and come back to the statew with specific costs andlease terms. That process woulxd continue through each ofthe development’s four expected to take between 10 and 12 yearss to complete. The first phase would focus onthe project’s officee space.
When fully developed, the project is slated to included 1,200 residential rental and for-sale units, 2 milliobn square feet of office space, 250,000 square feet of retail spaceand 7,000 parking Groundbreaking for the project’s first phase coulde begin in June 2010. Their effortx failed, but the legislature’s budgeg committees passed a requirement the projecrt be reviewed by state TreasurerfNancy Kopp. The legislaturr asked Kopp to look specifically at an accounting provision of the projectf to determine ifthe state’s leasing of officer space from the developers should be considered an operatingh lease or a capital lease.
If it were deemed a capita l lease, that would mean the state woulde need to list it on its budget as an assetg anda liability, and thosed costs would be added to the state’ overall debt affordability limit — its ability to borrowq money to finance otherr capital projects. In a May 15 report, Thosre terms won’t be determined until after the masterd development agreementis approved. But Kopp felt it should be considered acapitaol lease, and those costs could cause the statew to exceed its debt service limitss by 2018.