STEPHANIE RAWLINGS-BLAKE MAYOR SEIZING THE MOMENTUM, BUILDING A BRIGHTER FUTURE: Jobs. Investment. Growth. A Comprehensive Economic Development Strategy for Baltimore December2014 2014 1 (This page intentionally left blank) FINAL DRAFT Letter from Mayor Stephanie Rawlings-Blake The City of Baltimore has a great story to share. With a thriving port, world-class leadership in higher education and health care and a vibrant mixture of arts, culture, history and waterfront, the City of Baltimore has long served as an economic engine for the State of Maryland. Even during challenging economic times nationally, our city has forged ahead, thanks to our remarkable entrepreneurial resiliency, from start-up technology companies to stalwart businesses that have called Baltimore home for more than a century. Baltimore has a proud past and a bright future. This report – Baltimore’s Comprehensive Economic Development Strategy – offers a blueprint for us to continue to grow, to leverage our momentum and highly educated work force to create new economic activity that will benefit our entire city. It will guide our economic development for the next five years as a “living” document. If we truly believe that our best days of economic activity lie ahead, then we must constantly be willing to adapt this plan to ensure that Baltimore is doing all that we can to promote business activity. More than 300,000 people rely on Baltimore as their job center. Whether they are city residents or commuters from our surrounding suburbs, they understand Baltimore’s economic potential and contribute to it every day. While we embrace our historic industrial base, we are also working to cultivate the next generation of entrepreneurs and researchers who will develop new insights into technology, healthcare and advanced manufacturing. We serve as the home for some of the nation’s leading investment firms, who provide management, advice and service on billions of dollars in assets. We recognize that many of our greatest opportunities come through working with our existing businesses to stay and grow in Baltimore. We also want those with new ideas and businesses elsewhere to appreciate Baltimore’s potential and join our growth. Like all cities, we face our challenges, and we have committed to facing them honestly and directly. Our economic growth strategy cannot succeed without a sincere commitment to inclusion, support for small business and the development of career training pathways for our residents in need of jobs. I thank our civic, business and educational leaders who lend their resources and expertise to support our efforts to grow Baltimore, including developing this report. They are consistently answering our call to make our city a better place to work, live and play. Whether you are a lifelong resident or someone considering an economic opportunity in Baltimore City, I invite you to read this report and talk to our economic development professionals about how we can help your business succeed and grow. STEPHANIE RAWLINGS-BLAKE MAYOR 3 Table of Contents Preface: Baltimore’s Turning Point …. 7 Conditions and Market Analysis …. 11 Key Economic Drivers …. 15 Challenges and Progress …. 23 Baltimore’s Key Industry Sectors …. 29 Financial and Professional Services …. 29 Health and Bioscience Technology …. 30 Arts, Culture and Tourism …. 31 Information and Creative Services …. 32 Logistics …. 33 Advanced Manufacturing …. 34 Strategic Recommendations …. 37 Key Strategies …. 38 Conclusion …. 49 Appendices …. 51 About the Report …. 54 5 BALTIMORE HAS REACHED AN IMPORTANT MOMENT IN ITS HISTORY. 6 Preface: Baltimore’s Turning Point Maritime powerhouse. Manufacturing hub. Defense Baltimore has reached an important moment in its industry mainstay. All of those describe Baltimore’s history. Its population loss has ended and the city is economy at different times in its three-century history. now gaining residents. The real story is that crime is For decades, Baltimore was among America’s largest on the decline and graduation rates are increasing cities and one of its most commercially important and new commercial and residential developments centers. Industrial giants such as Bethlehem Steel are occurring throughout the City. and Western Electric employed tens of thousands and drove the regional economy. With a major Anchor institutions in higher education and healthcare port, railroad access, a nearby airport and well- are thriving and fueling the growth of a vibrant “eds developed highways, Baltimore was perfectly and meds” economy. Nationally known and growing positioned as an industrial center, able to ship goods firms such as Under Armour, Emergent BioSolutions, to a third of the United States population overnight. Legg Mason, T. Rowe Price and M&T Bank are attracting well-educated, young professionals to jobs Over time and buffeted by global influences, the and city living. Major investments are being made in industrial economy declined dramatically, and public schools not seen for decades and widespread Baltimore began relying less on manufacturing and neighborhood redevelopment is moving forward industry and more on service, health and knowledge- with new innovative public-private partnerships. based sectors. Well-paying manufacturing and industrial jobs that were open to workers with less Mayor Stephanie Rawlings-Blake has articulated a education disappeared, leading to a rise in poverty vision for keeping the momentum and set a goal of and social challenges. City residents left Baltimore attracting 10,000 new families this decade, which for the surrounding suburbs in a wave that lasted would represent a major accomplishment. She has more than half a century; in all, the city lost more focused on reducing the tax burden, improving city than 328,000 residents from its peak population services, strengthening the schools and fostering new of more than 950,000. Like many American cities, economic development. The mayor’s administration Baltimore’s tax base suffered, making it difficult to has also taken steps to embrace and expand the pay for municipal services. entrepreneurial spirit in Baltimore and support the creation and growth of small businesses. City leaders responded to the challenges with a concerted urban renewal strategy that led to the That vision includes celebrating Baltimore’s successes development of the Inner Harbor area, Charles and maximizing their potential. At the same time, the Center and attractions such as the National mayor is committed to creating regional, national Aquarium, which helped make Baltimore a nationally and even global collaborations to bring new recognized tourist destination. Incentives helped business to Baltimore. That means taking the message lead to urban homesteading and revitalization of to businesses about the enormous opportunities and communities. Development spread from the Inner advantages that the city offers. Harbor in all directions around the waterfront and continues today to remake the city. This report builds on the mayor’s vision and is a strategic plan to guide the city’s economic development efforts for the next several years. 7 This study was built on extensive national and local This report is organized as follows: research and informed by insights from a wide variety • A Current Conditions and Market Analysis of community, business and government leaders. In section outlines key information about the the first step, an independent consultant compiled economy, with a comparison to Baltimore’s a market assessment that analyzed national, state, selected benchmark cities. regional and local data and evaluated Baltimore’s • The Key Economic Drivers section identifies the business climate and assets. Benchmark cities – city’s most important economic development Philadelphia, Oakland and Boston – with similar assets and ongoing trends. demographics and assets were identified and used • The Challenges and Progress section takes to make baseline comparisons. stock of issues that hinder the city’s economic development and highlights efforts to address Second, information on Baltimore’s assets, and mitigate those issues. challenges and opportunities was collected. One- • The section on Baltimore’s Key Industry Sectors on-one and group interviews were conducted identifies six economic clusters that will fuel the with more than 200 local leaders in the business, city’s growth. nonprofit and government sectors, and five • The Strategic Recommendations build on the community meetings were held to gather input from preceding sections and lay out next steps for small-business owners and community residents. the city’s economic development. And more than 1,100 people offered their views using an online survey geared toward Baltimore residents and business owners. With that information, we developed recommendations for expanding Baltimore’s economy. This study focuses on the drivers of economic development and the opportunities the city enjoys. Clearly, Baltimore’s economic future will be affected by a range of factors, including issues related to poverty, crime, public health, education, housing and transportation. This study acknowledges those challenges, but it does not propose solutions or approaches to mitigate them. Instead, it focuses on strategies that will sustain and create new growth opportunities for the city’s businesses, stimulate entrepreneurship and create jobs and career paths for Baltimoreans. 8 BUSINESS CHOOSING BALTIMORE TO LOCATE, GROW AND THRIVE AMAZON PIXELLIGENT TECHNOLOGIES Baltimore has