Monday, January 31, 2011 Volume 122 | Number 82 Online at TheDailyRecord.com TOO BIGTO ADREAMDERAILEDFAIL? The recession, lagging biotech investment and disengaged elected officials BETTING have taken a toll on the $1.8 billion project to transform part of East Baltimore A BILLION ON EAST BALTIMORE part one MAXIMILIAN FRANZ The progress proclaimed by this sign has been slow in coming to The New East Baltimore project. With plans for a massive biotech park stalled, project leaders are turning to new options to fill the vacant lots near Johns Hopkins Hospital, shown in the background. The sign and the site, shown here in a photograph taken last September, remain unchanged. Meanwhile, an African- Inc. The public share of that American community known amount is $212.6 million, BY MELODY SIMMONS and JOAN JACOBSON INSIDE TODAY as Middle East has been vir- more than a third of which is tually eliminated and its from loans that will take Community may lose name he nation’s largest urban redevelopment, more than 600 residents have three decades for the city to Residents call it Middle East, a projected $1.8 billion effort to trans- been relocated to make room pay off with diverted proper- but officials say the neighborhood needs to be form 88 acres of East Baltimore into a for the development known ty taxes. renamed and “rebranded.” world-class biotech park and idyllic as The New East Baltimore. But the dream of a 9A The Daily Record’s report urban community, lies derailed amid biotech park has been aban- Unchecked for years T on the findings of its investi- doned, putting the promise of Not since 2003 has an vacant lots, boarded houses and unfulfilled dreams gation, based on more than 50 thousands of new jobs in elected official raised a decade after it began. interviews and examination serious questions about limbo. Public and private sec- public financing of The The effort to give new life to a decaying communi- of dozens of city, state and tor leaders are scrambling New East Baltimore project. ty behind Johns Hopkins Hospital began with federal records, begins today. for a new focus for the proj- 12A unbridled optimism. Then-Mayor Martin O’Malley The five-day series is the first ect, saying it’s too big to fail. comprehensive public exami- “It has got to succeed,” and civic leaders promised that it would energize the nation of the project’s economy and create thousands of permanent jobs. said Shale D. Stiller, a Extra information online finances, leadership, account- Baltimore lawyer and civic Go to our website for a But a five-month investigation by The Daily Record ability and its record in narrated slideshow, video leader who is a member of interviews with East has found that the project, promoted as “America’s new achieving its original mission. several boards deeply invest- Baltimore residents, and model for urban development,” is lagging far behind its About $564 million has ed in the project. “If it does an interactive timeline and original timetable. The recession, disengaged elected already been committed to not succeed, it will be a big map of the area. Check back the project, which is spear- throughout the series for blot on Baltimore’s future.” additional online content. officials and unexpected difficulty attracting biotech headed by the nonprofit East firms have taken their toll. Baltimore Development See new east baltimore 9A Log on to our website TDR ONLINE TheDailyRecord.com AN EXCLUSIVE DAILY RECORD INVESTIGATION Apublication of Auction sales 8C Public notice 1C $220 per year For subscriptions Calendar 13A Real estate 18A call 1-800-451-9998 or INDEX Classifieds 14A Lawyer to lawyer 14B $2 per copy e-mail [email protected] Monday, January 31, 2011 The Daily Record 9A AN EXCLUSIVE DAILY RECORD INVESTIGATION New East Baltimore >> EBDI, a nonprofit, was formed to spearhead the project Continued from 1A Baltimore Development Corp., the It also would be a major setback East Baltimore Development Inc. city’s official development arm that is for two of the city’s most prestigious also a nonprofit. Founded Although the mayor approves the and powerful institutions, the Johns Created in 2002 as a nonprofit. Hopkins University and the philan- hiring of EBDI’s chief executive officer thropic Annie E. Casey Foundation, Objective as a matter of protocol, according to Charged with the development of the 88-acre site in former Mayor Sheila A. Dixon, the which have committed $85.5 million to Middle East and overseeing $564 million in financial the project. organization’s nonprofit status shields commitments of public and private funds to date for the it from much public scrutiny. It was Christopher Shea, EBDI’s CEO, nation’s largest urban redevelopment project. formed without approval of either the said he is not worried by the lack of Staff, salaries and budget biotech development and housing and City Council or the Board of In seven years, the nonprofit has grown to a staff of 71 with $5.1 million in salaries and a Estimates, and it does not have to is confident the proj- $50 million annual budget. ect will take shape adhere to city rules in areas such as Address hiring, competitive bidding and TOO successfully. 1731 E. Chase St. As evidence, he salaries. Master developer The Daily Record’s investigation cited construction of Forest City-New East Baltimore Partnership BIG housing for Hopkins found that The New East Baltimore’s TO graduate students Major contributing organizations public funding is so complex and poor- Johns Hopkins University ly scrutinized that local elected offi- underway now and Annie E. Casey Foundation plans for a new state Goldseker Foundation cials, some of whom serve on EBDI’s FAIL? lab and a state-of-the- Harry and Jeanette Weinberg Foundation board, said they had little grasp of the art public school. Abell Foundation $108.5 million in city funds committed BETTING Part of the effort CEO to the project at a time of tax increas- ABILLIONON may be “way behind in Christopher Shea es, and furloughs and pay cuts for fire- EAST BALTIMORE some line in the sand Board of directors fighters, police and other city workers. part one [drawn] in 2002, but Diane Bell-McKoy,President and chief executive officer,Associated Black Charities Dixon told The Daily Record that not behind now in my Anthony Brown, Lieutenant governor she did not know the city sold $78 mil- priorities to successfully resettle the Ronald J. Daniels, Johns Hopkins University president lion in bonds to support the project Anthony W. Deering, Rouse Co. Foundation and Exeter Capital chairman community,” Shea said. Judge Ellen M. Heller, Trustee, Harry and Jeanette Weinberg Foundation when she was mayor. Earl Linehan, President, Woodbrook Capital Those bonds, known as TIFs, for Little public oversight Patrick McCarthy, Annie E. Casey Foundation president Tax Increment Financing, represent David Nichols, M.D., Johns Hopkins Medicine the project’s least obvious long-term Dubbed The New East Baltimore Kaliope Parthemos, Baltimore deputy mayor for economic and by EBDI, the project is the city’s most neighborhood development costs to taxpayers. ambitious redevelopment effort since Nia Redmond, community representative Sold to investors in 2008 and 2009, Charles Center-Inner Harbor in the James S. Riepe,Senior advisor and retired vice chairman,T.Rowe Price Group the bonds financed the purchase and 1960s and ’70s. It is larger than Harbor Maurice D. Walker, community representative and managing partner, Birch Advisors demolition of houses and relocation of Robert L. Young III, Brown Capital Management occupants. Repayment, which began East by 18 acres. Thurman Zollicoffer Jr., Whiteford Taylor & Preston LLP Overseeing this massive undertak- in 2008, is supposed to come largely ing is EBDI, a nonprofit created in Ex-officio members from diverted property taxes collected Paul T. Graziano, Baltimore housing commissioner 2002 by the city, Johns Hopkins and Carl Stokes, City Council on the developed land that would oth- community leaders. Warren Branch, City Council erwise go into the city’s general fund. EBDI was intended to assure the Chairman By 2039 the city will have trans- project’s progress and continuity Douglas W. Nelson, former CEO of Annie E. Casey Foundation ferred $199 million in property taxes through changing mayoral administra- to repay the bonds with interest, tions, according to Paul Brophy, for- according to debt service projections mer president and co-CEO of the vate corporation, according to Martin oversight. Its board of directors, which provided to The Daily Record by the Enterprise Foundation and an early L. Millspaugh, its CEO from 1965 to reads like a Who’s Who in Baltimore city’s finance department. consultant on the project. 1985. power circles, has presided over heavy Also, the city will have to repay a Similarly, Charles Center-Inner EBDI has operated much like a pri- spending on consultants and staff Harbor was developed through a pri- vate corporation with little public salaries that far exceed those of See new east baltimore 10A Renaming Middle East hits a sour note BY JOAN JACOBSON C. “Jack” Young, who grew up in the and MELODY SIMMONS area and was Stokes’ predecessor in What’s in a name? the 12th District council seat. That’s a loaded question if you “I don’t like it. Why change it? It’s ask people from Middle East, a com- not anything we have had an ongo- munity north of Johns Hopkins ing conversation about,” said Hospital that is subject to an 88- Donald Gresham, one of the most acre overhaul. vocal opponents to the project. Now the community may be get- Gresham chose not to leave Middle ting a new name.