Baltimore City – Economic Development Project in Downtown RISE District – Payment in Lieu of Taxes
SB0756 authorizes a targeted property tax exemption, or partial exemption, for certain economic development projects in downtown Baltimore City’s RISE District if the project owner and the Baltimore City Board of Estimates enter into a payment in lieu of taxes (PILOT) agreement. The bill defines eligible projects as newly constructed or rehabilitated commercial or multifamily residential developments that include a hotel, office building, retail facility, multifamily residential facility, or mixed-use facility containing one or more of those uses.
To qualify, the project must be located within the specified Downtown RISE District precincts, the owner must demonstrate to the Board of Estimates that the city or its designated agency conducted an economic analysis showing the financial necessity of the exemption, and the owner must apply, obtain building permits, and satisfy or waive financing conditions by June 30, 2036. The bill also requires annual reporting to the Baltimore City Council president and the General Assembly on projects receiving PILOT agreements, including the economic analysis, jobs created, taxes generated, and other economic benefits. The act takes effect immediately as an emergency measure, while the new section is set to remain in force for 10 years unless extended by future legislation; existing PILOT agreements entered into under the section remain valid for their full term.
The bill adds a new section to the Tax-Property Article, creating a Baltimore City-specific property tax incentive for qualifying development projects in the Downtown RISE District. It gives the Board of Estimates authority to negotiate PILOT agreements that reduce or replace ordinary real property taxes for eligible projects, subject to economic justification and reporting requirements. The measure affects Baltimore City property tax administration, developers, lenders, and owners of commercial, hotel, retail, office, multifamily, and mixed-use projects in the designated area.
The bill appears to have been broadly supported and noncontroversial in the legislature, passing both chambers with overwhelming margins and no recorded opposition in the Senate vote. The strong vote totals suggest general agreement that the measure is a targeted economic development tool for downtown Baltimore City. The emergency designation and immediate enactment also indicate a sense of urgency around enabling development in the RISE District.
The main policy issue is the use of property tax exemptions and PILOT agreements to subsidize private development, which can raise concerns about foregone tax revenue and the need to prove public benefit. The bill addresses that concern by requiring an economic analysis and a determination of financial necessity before an agreement can be approved, and by mandating annual reporting on jobs, tax generation, and other benefits. Any contention would likely center on whether the incentive is sufficiently targeted and justified for the Downtown RISE District, rather than on the bill’s mechanics or scope.