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’as finances and impact on Maryland’ s ability to borrow money. The Senate Budget and Taxation Committeevoter unanimously, but with some to endorse the State Center which involves leasing 25 acres of land to a private development team. The Housew of Delegates’ Appropriations Committee indicated it will do the same but did not formallyg vote as its Senate counterparts didThursday afternoon. The project will now go to the stat Board of Public Works for a schedulee June3 vote. The board is led by Gov.
Martinj O’Malley, who supports the project and workex closely on it while he was mayordof Baltimore. Matthew Gallagher, the governor’sz deputy chief of staff, lobbiedc the House and Senate onthe project. “Ww are at the cusp of a very importantt milestone,” Gallagher said. “The governor’s office is very supportiv of this project and has been involvedf dating back to our time atthe city,” Gallaghetr told the House during its hearing on the In signing off on the the House and Senate legislators insisted on haviny more oversight in the redevelopment process.
They also conditioner their approval on seeing input fromthe , which is familiae with such large-scale development projects. A private Statee Center LLC development team was selected in March 2006 to remake the state office complex off Martin LutherKing Boulevard. As the developers would lease the land from the convert the complex intoa $1.4 billion mixed-usre development, and then leasew a substantial portion of the project’s planned 2 millionh square feet of office spacse back to the state for use by its variouxs agencies. For the project to move forward, the Boare of Public Works must approve a master development agreement setting the terms for StateCenter LLC.
Once that the developers will then desighn the first phase of the project and come back to the statee with specific costs andlease terms. That process woulf continue through each ofthe development’s four expected to take between 10 and 12 yeard to complete. The first phase would focusa onthe project’s office space. When fully developed, the project is slatedd to include 1,200 residentialp rental and for-sale units, 2 millionj square feet of office space, 250,000o square feet of retail spaceand 7,000 parking spaces. Groundbreaking for the project’as first phase could begin in June 2010.
Theidr efforts failed, but the legislature’s budget committees passe a requirement the project be reviewed by statr TreasurerNancy Kopp. The legislature asked Kopp to look specificallyu at an accounting provision of the project to determin ifthe state’s leasing of office space from the developers should be considered an operatingh lease or a capital lease. If it were deeme a capital lease, that would mean the statre would need to list it on its budget as an asset anda liability, and those costs wouldc be added to the state’s overalol debt affordability limit its ability to borrow moneyt to finance other capital projects.
In a May 15 report, Thosee terms won’t be determined until after the master developmeng agreementis approved. But Kopp felt it shoul d be considered acapital lease, and those costs could causw the state to exceed its debt service limits by 2018.