Baltimore, MD (PRWEB) April 28, 2014
Mayor Stephanie Rawlings-Blake has gone on record saying that she plans to implement “bigger” property tax breaks for the major industrial zones of southeast Baltimore. Rawlings-Blake and her administration want to create a new “focus area” that must first be approved by the state for the targeted tax credits, an area that is already part of the city’s 14,000-acre Enterprise Zone (http://articles.baltimoresun.com/2014-02-27/business/bs-bz-focus-zone-20140227_1_southeast-baltimore-percent-property-tax-credit-breaks).
The City of Baltimore is widely expected to apply to the state for approval for the new focus area, a proposal which has broad support from the council. Undoubtedly, the new incentives have played a role in Amazon’s proposal to build a second warehouse alongside its already approved 1 million square-foot warehouse. The site of its recently announced second building will be on the new proposed “focus area,” and if the city applies in time, Amazon’s second property will be eligible for the tax credits.
Enterprise Zones are designated areas where the state would like to see more investment and economic growth. With 30 such zones registered in the state, businesses within these zones are eligible for special tax credits for a variety of reasons, such as hiring a certain demographic of worker to infrastructure improvement.
“It is also worthy of speculation as to how much this move is intended to bring more shipping-related industry to the city, given the Port of Baltimore expansion and the recently announced second Amazon distribution center, slated to open at the end of 2014,” observes Andrew Bareham of KatzAbosch in response to the announcement. The new focus area is also directed at two operations scheduled to close in the same area, the Sun Products plant and Mars distribution center.
In an interview with the Baltimore Sun, Rawlings-Blake expressed the rationale behind the focus on industrial sites, explaining that many industrial sites "continue to remain underdeveloped and underutilized."
Under the current tax credit program, businesses which are located in an enterprise zone are eligible for “a general income tax credit and a larger income tax credit for hiring economically disadvantaged employees.” The program awards tenants, among other things, a tax credit to be phased out over a ten year period, going from 80% in the first five years to 30% in the final year.