A Great Day for Maryland Taxpayers
It was a great day for Taxpayers today, thanks to the Maryland Board of Public Works:
The Board of Public Works voted unanimously Wednesday to cancel lease agreements at the $1.5 billion State Center project. Gov. Larry Hogan vowed the action would clear the way for major redevelopment in midtown Baltimore.
Hogan, backed by Comptroller Peter Franchot and Treasurer Nancy K. Kopp, in effect pulled the plug on the project as envisioned under Gov. Martin O’Malley. Hogan said the plan as it stood made “absolutely no sense” but promised to work with city officials to find a new way forward.
“Our administration is absolutely committed to the redevelopment of the State Center project,” he said. The project first received board approval about seven years ago but has been stalled by court challenges, debt concerns and the change of gubernatorial administrations.
Trending: Kirwan’s Dreamworld
Don’t just take my word that it’s a great thing to see this project go away. Just take a look at some of the things that people have said about this project over the course of the last nine years:
“I still think the State is paying too much for this project with no guarantees that profit sharing will be realized. Furthermore, when this thing gets going and construction costs and interests rates get recalibrated there is no assurance that financing won’t be considered a capital lease and be counted against debt affordability.”
–Patti Konrad, Director Debt Management State Treasurer’s Office
WBFF Fox 45 News February 6, 2013.
“As noted above, at this time there is not enough information to definitively determine whether the anticipated occupancy leases are capital or operating. However, based on internal discussions and consultations with experts, the Treasurer’s assessment is that the prudent approach at this time is to assume that the State Center occupancy leases are, or will be, capital leases and that they will impact debt affordability.
–State Treasurer Nancy Kopp
State Treasurer Nancy Kopp: A Report to the Maryland General Assembly, May 15, 2009.
…it is apparent that the project would fall within the definitions of a capital lease.
–Department of Legislative Services
Department of Legislative Services State Center–Transit Oriented Development Briefing, February 2009.
Accounting guidelines suggest that it is likely a capital lease. DLS estimates that the additional lease cost of State Center would cause the State to exceed its debt limitation criteria that debt service not exceed 8% of State revenues.
–Department of Legislative Services
Department of Legislative Services 2015 Session Capital Budget Overview
“I don’t see how this isn’t a capital lease. And I don’t see how – I mean if you go this direction, haven’t you amazingly invented a way for us to dramatically reduce our capital expenditures, by simply calling the duck a chicken, and us, and us saying to the rating agencies, ‘tada, we really don’t have any debt.’”
–Senator Richard Madaleno to O’Malley administration officials
State Center Hearing Budget and Tax Committee, December 9, 2014
You’ll remember that Red Maryland has covered the boondoggle at State Center ever since the contract was put into place back in 2009. State Center was a corrupt Martin O’Malley deal that was approved improperly, blessed by Democrats in the General Assembly, that was mired in lawsuits,and violated procurement laws. It was a symbol of Democratic corporate cronyism at its worst and was a key point in exposing the sordid relationship between the O’Malley Administration and KO Public Affairs, the people behind Center Maryland.
That the Board of Public Works unanimously cancelled the lease agreements at State Center is a full repudiation of the climate of corruption and cronyism that was rampant under Martin O’Malley and is a rejection of the banana republic influence peddling that flourishes when Democrats control the Governor’s mansion.
Where the State Center project goes from here is anybody’s guess. Realistically, it would be in the best interest of everybody for the state to sell the land and let it be redeveloped privately. But regardless of what happens from here, we can be confident that the taxpayers are going to get a much better deal with Governor Hogan leading the way than we ever would have under any Democrat. The cancellation of State Center is a reminder that the corporatist kleptocracy of the Maryland Democratic Party is over.