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

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billion State Center redevelopment in Baltimore Citymove forward, despited lingering concerns about the project’s financea and impact on Maryland’s ability to borrow money. The Senatr Budget and Taxation Committeeevoted unanimously, but with some to endorse the Statre Center project, which involvesx leasing 25 acres of land to a private developmen team. The House of Delegates’ Appropriations Committewe indicated it will do the same but did not formallyy vote as its Senate counterpartzs didThursday afternoon. The project will now go to the state Boarde of Public Works for a schedulex June3 vote. The board is led by Gov.
Martin who supports the project and workerd closely on it while he was mayor of Baltimore. Matthew Gallagher, the governor’s deputy chieft of staff, lobbied the House and Senate onthe project. “We are at the cusp of a very importang milestone,” Gallagher said. “The governor’s office is very supportivew of this project and has been involved dating back to our time at the Gallagher told the House during its hearing on the In signing off on the the House and Senate legislators insisted on having more oversightt in theredevelopment process.
They also conditioned theirr approval on seeing input fromthe , whic is familiar with such large-scale development projects. A private State Centefr LLC development team was selected in Marchn 2006 to remake the state officw complex off Martin LutherKing Boulevard. As the developers would lease the land from the convert the complex intoa $1.4 billionh mixed-use development, and then lease a substantial portion of the project’s planned 2 million squarwe feet of office space back to the state for use by its variouz agencies. For the project to move the Board of Public Works must approvwe a master development agreement setting the term s for StateCenter LLC.
Once that the developers will then design the firsft phase of the project and come back to the statwe with specific costs and lease That process would continue through each ofthe development’as four phases, expected to take betweemn 10 and 12 years to complete. The firsty phase would focus onthe project’s office When fully developed, the project is slated to include 1,200 residential rental and for-sale 2 million square feet of office space, 250,000 square feet of retailk space and 7,000 parking spaces. Groundbreaking for the project’e first phase could begin in June 2010.
Their efforts failed, but the legislature’s budger committees passed a requirement the project be reviewed by state TreasurerNancy Kopp. The legislatur e asked Kopp to look specificallyt at an accounting provision of the projecf to determine ifthe state’s leasing of office space from the developers should be considereds an operating lease or a capitakl lease. If it were deemed a capitakl lease, that would mean the statre would need to list it on its budget as an asse anda liability, and those costs would be addeds to the state’s overall debt affordabilitty limit — its abilit y to borrow money to financre other capital projects.
In a May 15 Those terms won’t be determined until after the master developmengt agreementis approved. But Kopp felt it should be considereds acapital lease, and those costs could causw the state to exceed its debt serviced limits by 2018.