Harbor Point Project
The Harbor Point project is being developed as a mixed-use development on a 27-acre waterfront site in the City of Baltimore, Maryland. The site is the location of the former Allied Signal’s (now Honeywell International) chrome ore processing facility and is the last substantial stretch of undeveloped land along Baltimore’s Inner Harbor. As planned, the project includes 3,000,000 square feet of mixed-use development, including 1.6 million square feet of office, over 900,000 square feet of residential, 220,000 square feet of retail and 220,000 square feet of hotels/condos with 3,300 structured parking spaces and 9.5 acres of open spaces, plazas and parks. It is estimated that over one billion dollars will be invested towards the completion of the Harbor Point project.
From late 1840 to 1985, the site was occupied by what was to become known as the Allied Signal Baltimore Works facility, the world's largest processor of chrome ore. When Allied ceased operations in 1985, the community was left with a vacant site containing chromium-contaminated soil and groundwater that was leaching into the surrounding harbor. A Consent Decree among the U.S. Department of Justice, United States Environmental Protection Agency (EPA), Maryland Department of Environment (MED) and Allied Signal was put into place in 1989 that governed the cleanup and future redevelopment of the site. In 1999, a $110 million cleanup and containment effort, conducted by Allied Signal, was completed. The site was recognized by the EPA and MDE as a model for returning a Brownfield to productive use in 2003.
The Harbor Point Project will be delivered in three phases. Phase one includes the completed 277,000 square foot Thames Street Wharf office building, as well as the proposed 885,000 square foot Exelon Tower, inclusive of 39,000 of retail and 103 apartment units, and two parking garages totaling 1,060 spaces. Phase two is proposed to consist of 352 residential unit tower with 25,000 square feet of ground floor retail, and two office towers. The first office tower is proposed to be 245,000 square feet with 30,000 square feet of ground floor retail and the second office tower is proposed to be 238,000 square feet. Phase three is proposed to include a 222,000 square foot hotel and/or apartment project with 13,000 square feet of ground floor retail, a 527,000 square foot office tower with 16,000 square feet of ground floor retail, and a 307,000 square foot apartment tower with 10,000 square feet of ground floor retail. Construction of the final phase is expected to be complete in 2022.
In 2014, the Mayor and City Council of Baltimore, issued Special Obligation Bonds in the amount of $36,000,000 for purposes of financing the public infrastructure necessary for the first phase of development. Bonds were issued to finance public infrastructure, including, but not limited to, roads, stormwater, sanitary sewer, sidewalk, landscaping, street lighting, traffic signals, Central Avenue Bridge, Central Plaza, and improvements to the Living Classrooms Crossroads School Building. Security for the bonds include tax increment revenues and backup special tax revenues. Other sources of financing for the project include debt, equity, and Enterprise Zone Tax Credits. Bonds were issued to the developer at the rate of LIBOR plus 325 basis points and are to be drawn on as the public improvements being funded by the bonds are constructed. Once the first phase of development is constructed and generating tax increment revenue, providing a known amount of revenue acting as security for the bonds, the bonds will be converted to the market at an interest rate established by the capital markets. Additional bonds are anticipated to be issued for purposes of financing the necessary public infrastructure for the remaining phases of development with a total not-to-exceed amount, inclusive of the bonds issued, of $155,408,039.
Tax increment financing functioned as a redevelopment tool, facilitating the transformation of an existing Brownfield in a premier waterfront location. It also acted as a source of financing for extraordinary development costs caused by the necessary remediation of the site and the extension of infrastructure to the site.
Prior to the issuance of bonds, MuniCap, Inc. served as the financial consultant to the City, preparing the TIF plan of finance and feasibility analysis in conjunction with the developer. Once bonds were issued, MuniCap, Inc. transitioned into the role of administrator to the Harbor Point Development and Special Taxing Districts. As administrator, MuniCap, Inc. ensures compliance with best practices as determined by the Municipal Securities Rulemaking Board and Internal Revenue Service by preparing the required reports and documents.
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