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Franchot, who joined Gov. Martin O’Malley and Treasurer Nanc y Kopp onthe state’s Board of Public Workws in voting for the $1.4 billion State Centert redevelopment project Wednesday afternoon, said he does not know enougg about the project’s costs to the state or whetherf the project is even practical given the nationwidse credit crunch. “I believe the projecg has a lot of promise and is deserving of Franchot said in a telephoneinterview Wednesday. “I voted for it, but am going to continur to be vigilant about the fisca l exposure tothe state.
” The deal involvews the state leasing its midtown Baltimors office complex to a private development which would then redevelolp the property into a mix of shops and homes. The state would then leasee back a majority ofthe project’es 2 million square feet of office spacr for use by its various stat e agencies. But the terms of the deal have not been hammeredcout yet, as Franchot and the Board of Public Works voted Wednesdagy only on a master developmenyt agreement. With that agreement in the development team will now create designs for its planned buildings and come back to the statee for approval on morespecific designs, and lease terms.
The development which includes national housing deveoper Baron & Salazar, would borrow $888 million to financed its work, according to the Department of Legislative The state would issue another $338 million in State and federal tax credit programs would pick up anotherf $234 million in project with the remainder of the project’e costs being contributed directly by the developersw or other investors. Franchot said that scenario raises several including the ability for the state or the developerw to borrow money in the midst of the nationwidedcredit crunch.
He said he’s also concernef about the state’s abilitty to negotiate fair lease termes with the developers given they would both be heavily investefd in making sure the projectis “The problem is that the credit markets are bone Franchot said. “Obviously this is a long-termj project, but I’m not confident that the privatee sector will finance this in a way that the statw canafford it.
” In addition, Franchot said he isn’r sure why the state would make the project a priorit y above other pressing needs such as new college dormitoriesx or other state-funded construction
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