Tuesday, February 19, 2019

Fiscal realities are hitting home in Baltimore County

For decades Baltimore County grew by leaps and bounds while the City shrank. Finally the County surpassed the City in population. Today the County has about 200,000 more residents than the city, yet its overall General Fund is with just over $2billion only slightly larger than that of the City with $1.88 billion. Much of the County's growth came from the City drawing many of the City's educated and mobile people. But already some 30 years ago some voices warned that the "inner ring suburbs" would face a similar fate to that of the City. Now the time has come where revenue and expenses are on opposite trajectories. The new County Executive told me this morning: "I had no idea it was that bad". In his transition team press conference this morning he mentioned a $81 million shortfall for the coming fiscal year not counting additional money the school system needs. (See the transition team report here).
The graph of trouble: Sinking revenue and rising expenditures (screenshot)
Wide streets, SUVS, double garages and fake Colonials: White Marsh

The matter isn't all that surprising but the confluence of conditions is especially unfortunate now. Or as the County's Spending Affordability Committee report published by the County Council last Friday states:
Under ordinary circumstances, the County would curb its future spending commitments to align with such moderate revenue growth [...] For FY 2020 though, the challenges  [...] are not ordinary- they are extraordinary- because for far too long, the County has been under-investing in our public schools and in our other needs. Our facilities are literally and symbolically overflowing, as we can [...] see our aging drainage system failing [..] and our children filing in and out of the "learning cottage" trailers encircling our schools. 

When Dutch Ruppersberger was County Executive and David Fields was Planning Director an office of community conservation was created to pay attention to livability and to make sure that new development on green-fields wouldn't cannibalize the County's older suburbs.
Increasing debt (expressed in relation to assessed property
values (from SAC report FY 2020)
Alas, in spite of all the State's smart growth talk, outward growth continued at a rapid clip and Baltimore County, which as the only county in the State,  had enacted a real growth boundary, began running out of options for those who looked for affordability via the longer commute. Some call the entire post-war US suburban growth bonanza a Ponzi scheme in which Peter always robbed Paul.
We often forget that the American pattern of suburban development is an experiment, one that has never been tried anywhere before. We assume it is the natural order because it is what we see all around us. But our own history — let alone a tour of other parts of the world — reveals a different reality. Across cultures, over thousands of years, people have traditionally built places scaled to the individual. It is only in the last two generations that we have scaled places to the automobile.(Charles Marohn,Strong Towns)
It was only a matter of time until Baltimore County would face a fiscal reckoning not unlike the one the City has known for a long time. The writing has been on the wall for years: Most central Maryland counties outperformed Baltimore City and County when it came to household income, increases in property values, educational attainment, job growth and school performance. This are the very same metric which have put the City under pressure for decades and forced the shrinking of Maryland's largest incorporated city. With shrinking incomes, populations and property values came the steady rise of City taxes, until they were almost twice as high as those in the County. For a long time it was enough for the County to have low taxes and "not being the City".
Olszewki addressing his transition team

The County Executives down the line to Kevin Kamenetz held on to those trademark features by holding property tax rates stable, deferring major investments and by keeping affordable housing largely out of the County. Meanwhile schools aged, infrastructure crumbled and the federal department of housing (HUD) enacted a housing consent decree. An urban renaissance washed the well educated young people back into cities, bypassing the suburbs where their parents lived and which they knew all too well as the place where not much happens.  By 2030 more people over the age of 60 will live in Baltimore County than under the age of 18.
Historic Catonsville: Inner ring suburbs and failing infrastructure

Any local jurisdiction by law forced to balance its budget faces the question of how to pay for its operations, services and capital projects. In Maryland the main local revenue sources are the income tax and the property tax. That income system works as long as the population either grows or gets richer and as long as growth or rising property values swell property tax revenues. Slowing population growth, lower incomes and low property appreciation all spell trouble, especially when those trends coincide with the time where schools, roads and pipes need their first round of serious maintenance.

Personal income growth: Mostly lagging behind the State averages
State (blue) and Baltimore County (red)
Baltimore City responded with taxing its shrinking population higher and higher, what will Baltimore County do now it is its turn to face the piper?

Not that the County is yet shrinking, but thanks to diminished growth in the key categories, it is showing financial stress nevertheless. There is already a lot of public hand wringing whether it is finally time to raise taxes. "Are tax hikes on the table in Baltimore County"? asks the Baltimore SUN in bold letters. The SUN asked the question again this morning in Olszewski's press conference and the Executive once again stated that "everything is on the table" but that "taxes are the last option". The already noted  report by the County's Spending Affordability Committee (SAC) uses unusually frank language describing a County which prided itself for years for its fiscal stewardship.
Further, as the availability of General Fund infusions to the Capital Budget diminished, debt reliance escalated, the County's practice of forward -funding school construction projects became less feasible. In the County's 2018 budget message, the Council drew attention to these concerns and restated prior requests by both the Council and the Spending Affordability Committee for a long-term financial plan, but the Administration was non-responsive to all such requests. (SAC report)
One of the possibilities is to hike the County portion of the income tax which has been held at 2.83% while most more urbanized counties went beyond the 3% mark (the limit is at 3.2% per State law). Another is to charge developers impact fees (as many jurisdictions do) or at least bring back the stormwater fees which had been washed away under Hogan's misleading label as "rain tax". (Stormwater expenses now far exceed collected income).
Falling revenue from property taxes

Before going ballistic over the possible prospect of the County raising taxes or fees, it is worth considering that Baltimore County has remained in the bottom portion of combined local property tax rates compared to not only the City but also to high tax outposts such as Princess Anne in Somerset County, Bladensburg and new Carrollton in Prince George's, all at over $1.90 per $100 of assessed value. Not only are the rates comparably low, people in Baltimore County are also not particularly wealthy. The per capita taxable income of $29,480 ranks far below Montgomery County ($41,270), Howard ($39,221) and also below Talbot, Frederick, Queen Anne's and Calvert Counties. The poverty rate in the County doubled from 1990 to now.

Baltimore County revenues: Combined revenue still rising
(Blue=Property taxes, Green income tax)
Accordingly, County services don't rank in the top either. School funding, the new County Executive's main focus, is relatively low if expressed as per pupil funding. Baltimore County ranks far below Worcester (the leader of the pack), Baltimore City, and below Howard and Prince George's on rank 11 statewide in per pupil spending. Expressed as total expenditures on education of libraries the County even ranks below Baltimore City on rank 21 of 24. (these and many others rather not so well known facts about Maryland's counties can be found in this document published by the Department of Legislative Services.
Funding per student 

The current fiscal situation should be an opportunity for the County to re-position itself in the metro region. In a time of urban renaissance and young adults flocking back to the City because they rediscovered human interaction and the beauty of well designed public spaces and parks,  in a trend that favors experience over consumption and favors quality over quantity. Defining oneself as "not the city" is clearly no longer sufficient.

While there will always be people who prefer the quiet anonymity of a suburban home over the hustle and bustle of  a city, the trends go in the other direction. Baltimore County's most authentic communities such as Pikesville, Essex, Arbutus, Dundalk and Catonsville hold the promise to attract people who care for community character. But those communities are aging, suffer from failing infrastructures and schools in need of repair and haven't seen the amount of attention they need.  Its historic district rules are weak.  Gritty, creative and innovative reuse of old factories such as the American Can, Tide Point or Clipper Mill is still elusive in all of Baltimore County. The impressive reincarnation of the former Segram whiskey facility by British beer giant Guinness on a 62-acre campus Baltimore County is an interesting start, but it doesn't support local business and remains entirely isolated.

Only slowly, and without County goverment's doing, does the County offer the brewpubs, bakeries, bikeshops and events millennials like. The County yet has to designate an arts and entertainment district. The County's anchor institutions such as Towson University and UM at Baltimore County remain isolated and do little to revitalize their neighboring village and town centers. Transit is largely absent, Baltimore County is one of the few large Maryland counties which does not run its own transit system and relies entirely on MTA. Attempts of new urbanism or transit oriented development are woefully inadequate compared to what the Washington suburbs have done.
County revenues FY 2019

The newly elected County Executive Johnny Olszewski has started office with a lot of promise, energy and openness. His has rightly embraced regional collaboration and addressed most of the noted shortcomings in his campaign. He himself says that the problems of Central Maryland do not know jurisdictional boundaries, whether it is transportation, water, sewer, trash or bad air. The counties around Baltimore City won't succeed if they continue the bad politics of the past in which each competes against the other and all together against the City. It will take courage to favor investment over austerity, but that is exactly what the County needs to reverse the downward trajectory of its revenue and the upward course of expenses.

Klaus Philipsen, FAIA

The author was a member of the transition team on the committee for Sustainability, Infrastructure and Transportation.

Thursday, February 14, 2019

Understanding the CHAP decision on the Morton Street carriage houses

This is the second of two articles about the most recent meeting of the CHAP Commission.

Having tabled the decision about the Martick's building at 214 West Mulberry Street, the Commission went on to deliberate about the proposal by building owner Howard Chambers to tear down the backs of four carriage houses on Morton Street in Mount Vernon, preserve the fronts and build a six story "addition in the back across all building lots.
Montage of the denied project (Morris Ritchie Associates)

The staff recommendation was for CHAP to ask for a modification of the proposal to retain more than 15' of the front of the buildings and then revisit the matter. But the verdict of the Commission was harder than expected. Last year the Commission approved the demolition of historic buildings on nearby Eager Street to make way for a new highrise without keeping any part of those buildings.  Also a 2006 proposal for demolition of the same carriage houses had support from then Mayor Martin O'Malley, and then planning director Otis Rolley III on the grounds that new construction would enhance the tax-base and get more people on the streets of Mount Vernon.

Montage of the denied project (Morris Ritchie Associates) 
Indeed, CHAP  had seen the Morton Street carriage houses many times before, Commissioners and staff have changed but the applicant has stayed the same  since 2001. Some applications dealt with rehab proposals, one with full demolition but was eventually pulled, so was a proposal much like the one now which suggested to keep three fronts and tear one carriage house down for a new building. The concept received a pretty positive review in 2006 but no final vote. However, Chambers never followed through with those plans.
The west side  of Morton Street

The somewhat erratic history may not have helped, nor did the fact that the project was now submitted as an "addition" and not as "demolition", a point that created much debate and some uncertainty how to proceed. Changing course would have meant that the matter would have to start over in a two step process in which the first point of consideration would be if the buildings are significant in this local historic district. This is what Johns Hopkins of BalTimor’s Heritage  asked for in his testimony and this is what the applicant could have settled with. It would have kept the door open a bit longer.

The plaintive tone of Howard Chambers did little to sway the commission in his favor. "People I talk to say “do something with the parking lot [across from his proposed project] before you tear anything down, but I don't control that lot" he started his testimony, arguing a point the Commission would never make. He then argued economics and how hard it is to rent out those carriage houses (an economic hardship argument, while allowed under CHAP rules is centered around a demolition and not an addition, and finally complained that "nothing happens in Mount Vernon", a point that CHAP isn't responsible for, especially since they had just permitted the new apartment tower south of Eager Street, certainly a major project.
“I am tired of nothing happening in Mount Vernon. You see all the activity in Station North, Hampden, Remington. What is the problem with Mount Vernon? The problem is that Mount Vernon is resistant to change.” (Howard Chambers
It also didn't help that the architect, Chris Pfaeffle of Morris Ritchie Associates made a more philosophical than technical plea. In it rang not so subtly the suggestion that Baltimore is too provincial to understand how preservation is understood elsewhere as a dynamic continuum instead of "static and dead as in taxidermy". He described the proposed project as "a strategic work of design [where] you can walk into the cool old building to get to the cool new building above.” This is not the language preservationists find convincing.
First floor plan  (Morris Ritchie Associates)

For an argument to be tailored to CHAP's standards one would talk about what historic significance the backs have or don't have, or how the proposed "addition" really does not turn the remaining fronts into the tails of a big new dog.  Some explanation about how the main features of the carriage houses would be integrated and emphasized would have helped, too. Even better if they had convinced the Mt Vernon Improvement Association about the benefits of their project. ((They spoke against it). Alas, as it was, the team left the floor wide open for the Commissioners and the testimonials which were mostly negative.

Commissioner Gibson made his point most forcefully: "This is in my view the wrong thing in the wrong place. Period." CHAP member Matthew Mosca described the row of carriage houses as a local treasure and opined that there's not another street like this in Baltimore, a point also made by  nearby resident  Paula Fernandez who was reminded of  the mews in her native England. Architect Steve Ziger, whose office is on Morton Street, testified as well, a daring move, given that he had forcefully argued for Eddies to come down for the Richter tower. But his point was very illustrative and directly to the point of the deliberation:
“Fifteen feet is less than half of the width of this room. “The setback turns the elevations into a parody and a joke [...] where is the cutoff between what is a demolition and what is a significant addition?” (Steve Ziger)
two of the carriage houses in question (SUN photo)
Historic preservation doesn't enjoy a very high esteem in public opinion, no matter that developers are sitting on an even lower rank.  Many misunderstandings about preservation exist; The misgivings often contradict each other: Some hold that preservation is elitist, clinging to white "high culture". Others complain about the opposite, namely that there is too much preservation even of mundane structures. Others see preservationists as unrealistic, nostalgic "building huggers" who don't understand economic realities. The star architect Rem Koolhaas also saw new development being jeopardized by too much preservation.  The reality is that Baltimore's CHAP Commissioners are not only experienced practitioners, quite sophisticated, and well versed in understanding the forces of development. If an argument is well crafted, neighbors testify in favor of a project and a case is made within the rules of CHAP, the Commissioners are quite willing to bend. Architect and chair of the Commission Tom Liebel made this point in a recent SUN article:
"Our goal is to be a positive force for preservation in the city and not be seen as obstructionist because we're getting dragged in at the tail end of the conversation when people find out too late what's going on. The goal is not to fossilize the city in amber but rather to make use of our great historic structures as a springboard into the future." (Tom Liebel, FAIA)
Applicants do better if they don't come in as adversaries but as partners who understand that CHAP does an important job. After all, Baltimore's biggest asset is a rich treasure trove of historic buildings, both, "high brow" and "low brow". Preservation has long become an element of the culture wars, of social identity and, importantly, of economic development. A national study shows that preservation areas in all cities perform far better than those where bulldozers reign unfettered.

The owners and developers of these two projects I described seemed to not fully get the all important context. But each case before the Commission could be another lesson for those projects yet to come.
Klaus Philipsen, FAIA

BBJ about the CHAP decision
Ed Gunts (Fishbowl) about the CHAP decision
2006 Chambers Plan Baltimore SUN

My blog has many articles about preservation as a tool including this:
What makes Baltimore special - its Architecture! The Case for Preservation

Wednesday, February 13, 2019

Martick's: Why preservation will help the new development

On a wet and cold February day what was going on catty corner from City Hall in the windowless Phoebe Stanton room on the 8th floor of the tired Benton Building provided another great lesson in the many ways historic preservation can be misunderstood. Still, even 56 years after Penn Station in New York was demolished, an event that is usually cited as the birthplace of American historic preservation.
Marticks after closure in 2008 with the adjacent garage still standing

The occasion was a meeting of the Baltimore City Commission for Historic Preservation (CHAP) and small historic structures threatened to be swallowed by development proposals for contemporary apartment buildings. First on the agenda was Martick's, a tiny two story building on Mulberry Street that has been boarded ever since Morris Martik left the stove of his Restaurant Francais cold in 2008 after a run of nearly four decades.

One can argue for the historic stature of this building on the ground of its architecture: The vaguely Federal style building dates back to somewhere between 1830 and 1850, making it one of a few Baltimore pre-Civil War buildings. Or one can argue historic relevance because it is dear to a whole generation of older Baltimoreans who frequented Martick's Tavern as artists or bohemians. Initially run by Morris' father since 1917 (he served jail time for selling booze during prohibition) or later later to enjoy French cuisine prepared upstairs by Morris who had learned to cook that way after he had, , locked the Tavern up to go to France, frustrated by the "artist alcoholics" as he apparently called the folks hanging out in his place for endless hours. Those more elaborate French dishes he cooked upon his return were still a revelation back in 1971 when he reopened the old abode on 214 West Mulberry Street in which he had been born in 1923 and in which he lived to his death in 2011. (More detail in Baltimore Heritage's blog).
Martick's as a tavern 

In January CHAP sided with both of those arguments for historic relevance and unanimously recognized the building as historically significant (it sits inside the Market Center National Register District), forcing the developer, who wants the building gone, to come back with a an application for demolition based on "financial hardship".
The locally significant Market Center Historic District represents Baltimore’s retail growth and development from ca. 1820 to 1945. The rowhouses, small commercial buildings, churches, schools, hotels, department stores, and chain stores record the evolution of the city over a 100-year period. The District also is significant for the variety of architectural styles and building types represented, and for the work of locally important architects within the district boundaries. (Market Center Historic DistrictInventory No.: B-1262, Date Listed: 2/4/2000)
The CHAP commission starts their deliberation off with a staff report. The recommendation: Table the decision since the financial report provided by the applicant, doesn't include potential cost breaks from grants and historic tax credits. In yesterdays session the developer, Chris Janian, president of Vituvius Development, presented various scenarios which more or less gobbled up the old structure and showed one with the building fully gone. Their conclusion: All cases, except the full demolition, present a financial hardship, because the developer can't recover the stated $1.1. million rehab cost with a reasonable return on investment (CHAP allows 8% as a threshold after 5 years). The developers admitted that their proposed six story apartment building wasn't designed yet and that the images were just "massing" sketches, but all images made whatever was left of 214 West Mulberry, look ridiculous, especially since the architect (Quinn Evans Architects) maintained that no windows could be placed in the west facade of the six story apartment block towering over the small old building.
The bar and dining area, brighter than it usually was  (SUN photo)

Then the commissioners asked a few questions. Commissioner Larry Gibson was especially interested in the Chinatown aspects of the development where it faces Park Avenue. (The developer assured that he likes Chinatown and promised to preserve the 5 buildings facing Park Avenue. Jim Rouse who had worked for Martick as a waiter from 1974-81 gave a colorful rapport of the life inside the shabby building in which the French food (specialty: bouillabaisse) was served in near total darkness. Naturally, he spoke in opposition of demolition. Councilman Eric Costello and Market Center Merchant Association Director Kristen Mitchell spoke for demolition, probably because the owner asked them to, at any rate, they didn't provide any particular reasons for their position other than convenience for the developer. Johns Hopkins of  Baltimore Heritage spoke succinctly for a delay in the vote since the materials had not been made sufficiently public.

So what are the misunderstandings? 

The first comes from the developer who had responded to a BDC request for proposals to develop almost the entire block, but the RFP excluded the Martick's building. The developer then purchased the derilict Martick's in Decemberfor $100,000. One would think, that buying a 170 year old building in a registered historic district should come with an understanding that preservation may be required. But Mr Janian had another goal. Later at the CHAP hearing, in the second case of a developer wanting to (partially)tear down historic buildings, the owner of  the Baby's on Fire record store suggested reasonably: "If you buy a historic building, don't count on demolition".
Morris Martick: Almost always grumpy (SUN photo)

Other misunderstandings came from the architect and the structural engineer. The latter emphasized the poor condition of the structure, not something one can hold against the historic building, rather against those who let it go after it closed in 2008. ("Demolition by neglect"). The architect made no effort of showing how the much larger new structure could be a good neighbor to the old relic. He could have shown a few convincing precedents from other cities where such in-congruent adjacencies have been done with success and respect. Lack of respect can kill a historic building, too.
live music at Martick's Tavern (SUN photo)

Then those who testified for demolition, because they are afraid the developer would run away from this very difficult block. A misunderstanding, too. True, the Market Center District can't afford to lose anyone who wants to invest there, especially in a very difficult block like this. But aside from presenting a very inflated cost of $1.1 million for the rehabilitation of less than 3000 sqft, the tiny building could hardly be a game changer in the $30 plus million deal, especially before all possible funding, use and support scenarios have been properly played out.

The biggest misunderstanding is that historic preservation is just a costly drag and impediment to new development. What matters much more than the added initial cost, is the value a preserved historic building adds to the development. Baltimore with its stagnant population and not exactly stellar reputation needs more than a sleek new apartment building to attract people to move here, especially right next to Mulberry Street with its three lanes of incessant traffic.
A unloved hovel in Bad Cannstatt, Germany (1975)

What could be a better accessory and branding tool than a building that is older than most anything in the suburbs? Better than a building with such a storied history of uses, attractive to any any age? Elsewhere they have to insert second hand antique beams and barn-doors to create the bit of "experience" and "authenticity" people are longing for. To look at the sad condition of the current structure and conclude that it should better go, proves nothing but a lack of creativity, imagination and inspiration. Fix the thing up and nobody will ever suggest again that it should have been torn down.
Cherished and reincarnated in Bad Cannstatt,
Germany (1985)

I have seen this before: A few years after Penn Station had been demolished, I fought to preserve a 15th century old religious "cloister" in Stuttgart and thus learned to understand the value of preservation. A small group of dedicated people saved the dumpy HVAC shop that was slated for demolition for a department store. Today, shiny department stores are long obsolete, but the fixed up "cloister", in its reincarnation as a wine bar, is the pride of the town.

Part 2 will deal with the Morton Street carriage houses.

Klaus Philipsen, FAIA

Ed Gunts about Martick's CHAP hearing in January
Business Journal article about Martick's

Monday, February 11, 2019

City Council's Clean Air Bill will have regional impacts

City Council Bill 18-0306, Clean Air Regulation will impose stricter emissions standards on commercial solid waste incinerators in Baltimore City. The bill is up for a final vote today. The stakes are high, not only for the BRESCO incinerator and its operator Wheelabrator, but for the entire region since the incinerator may have to shut down as early as 2021 if the new clean air standards go into effect. (This is the year when the current City contract with Wheelabrator expires). The battles lines are typical for environmental legislation: industry versus environmentalists, economic arguments against those that address social justice, equity and health and, of course, legal questions whether the City has the authority to legislate clean air standards.
BRESCO incinerator: Baltimore's largest point polluter

Wheelabrator floods the City with propaganda in the form of mailers and newspaper ads, Councilman Zeke Cohen alleges a violation of the Transparency in Lobbying Act. Late Friday, the Council got a document they had long requested: The Fiscal Analysis of Possible Impacts of
City Council Bill 18-0306. (The document can be found here). The impact analysis is limited, though, it is prepared by the Department of Public Works (DPW) and not by an independent agency and it does not include any specific recommendations about how the City can achieve further waste reduction. The "fiscal note is limited to assessing the impact of several BRESCO scenarios on the scope of our current waste stream and disposal means" DPW admits. Several scenarios were developed costing the city money for lost income from BRESCO (a loss totaling $9.8 million per year should it shut down), and lost tipping fees from commercial haulers at the City landfill who would have to find disposal outside the city. If the City would dispose all its solid waste in its own landfill, the cost would be about $12.8 million per year or $98.6 million over seven years. The landfill would reach capacity in 2024 instead of 2026, not assuming the planned capacity expansion expected to be completed by 2026 or later.
Protest against counting incineration  as a renewable energy

If the City would dispose its waste gradually outside the city limits via an additional transfer station (cost about $10 million) to be constructed, the annual cost is given with $15.8 million, a number with lots of uncertainty, since no negotiations have been had which landfills in the region would accept all the City's trash.
The municipal landfills in Baltimore County, Anne Arundel County, and Harford County are the nearest options for alternative disposal sites if BRESCO were to close. However, this would significantly impact the effective lifetime of those landfills so it is unknown whether those counties would be amenable to accepting large quantities of waste and at what cost. BRESCO is utilized by Baltimore County and a number of private haulers, so if it were to close, those entities would also need to find alternative disposal sites. Therefore, it is likely that landfills would increase their tipping fees in the face of high demand and low supply. (DPW analysis)
The Baltimore trash equation includes a number of variables:
  • The amount of trash that is produced (it could sink considerably due to waste avoidance legislation such as the styrofoam ban, a better recycling rate, more composting etc.)
  • the cost and construction of a trash transfer station should trash have to be hauled beyond the city limits
  • the expansion of the City's own Quarantine road landfill estimated to cost about $100, million
  • the actions of Baltimore County and commercial trash haulers who currently deliver waste at the BRESCO plant
  • the district heating customers and the Trident facility which use steam from the incinerator to heat downtown properties (they can also use natural gas supplied by BGE but at a different cost).
  • the cost of poor air quality caused by the incinerators which produce toxins such as mercury, dioxins, SO2 and NOx 
One of the less reported aspects of the incinerator is that it received in 2018 more solid waste from Baltimore County than from Baltimore City.  The split was 159,000 tons (City) and 215,000 tons (County), according to Mira Green, a Senior Budget Management Analyst at City of Baltimore. This makes the question of the incinerator a truly regional matter. No comment was available from the new Baltimore Executive Johnny Olszewski who has stressed regional collaboration and partnership with the City.
Destiny Watford, clean air activist

Commercial haulers who service businesses and larger rental and condo complexes in the City and the County deliver also solid waste to the BRESCO plant, creating tipping fees for the City.

Also not much reported is the fact that only 51% of DPW collected waste goes to the incinerator, in spite of the City's dismal 15% recycling rate. There is no immediate explanation why currently a large portion of waste would be directly landfilled. 

Wheelabrator's arguments aim at the emissions from additional trucking and landfilling, notably diesel fumes (NOx) and methane and the fact that landfilling isn't a green method of waste disposal either. However, these additional emissions the clean air bill may cause, though bad for greenhouse gases, are not in the same league as the highly toxic emissions from the smokestack of the incinerator and from the ash disposed in the landfill. Proponents of the Clean Air bill count as costs of incineration the poor health outcomes from bad air, such as asthma. Such "external costs" are not part of the cost evaluation prepared by DPW.

The DPW study ends with this conclusion:

Currently, the majority of waste collected within Baltimore City is sent to BRESCO for disposal. If this facility were no longer an option, then the City would need to find an alternative waste disposal method due to the limited capacity available at the City-owned landfill. The landfill is currently projected to have capacity until 2026, but the closure of BRESCO will increase landfill usage by possibly 100% a year.
The City would lose approximately $10 million a year in payments from BRESCO and $4.5-5 million in tipping fee revenue. There would be necessary expenditures of at least $10 million for a new transfer station, operating expenses of approximately $2.2 million a year for the transfer station, increased operating costs at the landfill, and transportation and tipping fees to an outside landfill, which could range from $10-22 million depending on which landfill is willing and able to accept the waste and how much they would charge. 
Most City Council members have made up their mind and will vote for the bill. Mary Pat Clarke, a long serving Council member put it this way:
“We’ve been working up to this gradually in this entire term of office. We’ve got to do this, and this is one step that takes us a leap into the future we need to create.” (Clarke, Baltimore SUN)
The Baltimore metropolitan area has been a non attainment area under the Clean Air Act for decades.

 Klaus Philipsen, FAIA

This article is an adjunct to Friday's article about the same topic.

Friday, February 8, 2019

All about trash: Baltimore's Clean Air Act

Baltimore City drowns in trash. Trash is a perennial favorite topic in Baltimore with a general consensus that the city is especially trashy compared to others, one of several things that sets us unfavorably apart.
Slide used by Clean Air activist Destiny Watford at an Environmental
Summit this week in Annapolis 

But the latest round of trash debate elevates the matter to an all new level. To 1.2 million annual tons level of trash, to be exact, and that is only the official count!  At stake is where this trash should go.

About 700,000 tons of waste (2011) go to the incinerator Baltimoreans know as the BRESCO plant, conveniently located at I-95 and The Baltimore Washington Parkway, right next to Baltimore's casino and Greyhound bus station. The plant is featuring a big smokestack that says "Baltimore",  a gateway symbol of sorts. Zero waste and anti incinerator activist Destiny Watford calls it the "worst idea of a welcome sign".

The plant was built in 1984 and started operation in 1985. It burns trash from the City and the County collected by the municipalities or by commercial haulers. The plant can burn maximally 2,250 tones of waste a day, that is about 200 trash trucks which can hold anywhere between 8 and 12 tons of trash, depending on their size (Much of Baltimore's fleet has smaller trucks which fit through the narrow alleys where can's typically are picked up.)
Trash is everywhere, not just in the collection trucks

The plant turns trash into steam by burning the refuse at around 2,250 degrees Fahrenheit. What remains is about 10% of the volume in the form of ash, about 200,000 tons if the plant would work at capacity. The ash is deposited on 153 acres of City land at the Quarantine Road landfill. (The landfill itself is 126 acres large) which began operation concurrent with the incinerator. The capacity is slightly less than 10 million tons of waste, the estimates about when that capacity would be reached were adjusted a few times to account for the density of ash which makess up the bulk of the landfill material. The benefits of the incinerator -landfill combo are three:
  • It all happens within the reach and domain of Baltimore's own Department of Public Works and 
  • The incinerator creates up to half a million pounds of steam per hour used to produce maximally 60 MW of electric energy 
  • The incinerator creates  district heat for downtown Baltimore circulated and operated by Trigen.  (all data from the City's mandatory10 Year Solid Waste Management Plan)
The problems are threefold as well:
  • The incinerator is the single largest point source polluter in the City, responsible for an estimated 1/3 of all City air pollution including extreme toxins such as dioxin and mercury.
  • the incinerator plant is technologically obsolete but there is no replacement in sight
  • the landfill is almost at capacity and is expected to fill by 2026 
The waste incineration concept also plays out at the Curtis Bay Energy operated nationally largest medical waste incinerator which is permitted for 62,000 tons of medical waste a year, but usually  accepts less than half of that.
Metal scrap recycling: Not without environmental challenges
(Photo: Timothy Wheeler, 2017)

The Mayor, Baltimore City Council and DPW have no solutions in hand for the triple challenge, even though the clock is ticking loudly given the relatively close end of usable life for the incinerator and the landfill. There is the mandatory 10 year waste management plan, but it doesn't provide a clear path forward.

Many believe that incineration of trash should be a thing of the past. This is what Josh Tulkin, State Director of the Maryland Sierra Club told me:
The Sierra Club believes that Maryland shoots commit to a rapid transition away from fossil fuels (coal, oil, and gas) and other carbon intensive sources of energy, and towards clean renewable energy. This starts with setting strong goals and aligning incentives to work towards these goals. The state of Maryland should not be incentivizing trash incineration. Everyone knows the saying "reduce, reuse, recycle" but we often skip the first two steps. Communities that have been most successful in waste reduction focus on all three elements (Tulkin).   
The matter came to a head this week when Council passed the second reader of the Clean Air Act this week and voted  to drastically increase the clean air requirements for incinerators, specifically by limiting the limits for mercury, sulfur dioxide, dioxins and nitrogen-oxides. The 2021 deadline for compliance had been removed in this round of the bill. The legislation will be up for another reader.
Living on a dump: Supertramp Album cover.

The Council also adopted a Resolution to remove the incentives the incinerator receives for "renewable energy" by eliminating trash incineration as an accepted renewable energy source. The resolution is tracking a similar bill in the State legislature.

The Clean Air Baltimore campaign and the proponents of the bill argue that Baltimore is not only in non-compliance with the federal Clean Air Act but has some of the worst air in the nation.

To clean up the air, the Council set emission standards which match the strictest standards for sulfur dioxide (SO2, 18 ppm/VD) and mercury (15 micrograms/cbm) in effect in North America in 2020, match North America’s strictest standards for dioxins (2.6 nanograms/cbm) and nitrogen oxides (NOx, 45ppm/VD) by 2022 and match the NOx standard met by the newest incinerator in the U.S., in West Palm Beach, Florida. This is also the same standard as the Maryland Department of the Environment required for the Wheelabrator facility once proposed in Frederick, MD which was defeated by local opposition in 2014. The mercury, dioxin and SO2 standards match those of the newest trash incinerator in Canada at the Durham-York Energy Center in Ontario. (per Clean Air website). The emission limits appear to be significantly lower than those allowed by EPA, especially for NOx and mercury. The value for dioxins/furans given in the City bill may be incorrect since it appears to be about six times that on the EPA table pg 129).
Zero Waste graphic by "Waste Management"

The clean air activists describe "Zero Waste" policies as the alternative to incineration and landfilling. A Zero Waste policy has been adopted by many cities, including by the New York City Boroughs which closed the Freshkills landfill to create a park. In the meantime, though, the Boroughs ship waste on barges to North Carolina at a cost of $300 million per year, hardly a sustainable practice. A study for Baltimore estimated the immediate cost of closing the incinerator for Baltimore to be $136 million over four years. (SUN).
The best option is for Baltimore to adopt a Zero Waste plan, as City
Council called for in Council Bill 17-0022R, the Zero Waste resolution adopted on June 5th, 2017. Such a plan would have the city end the use of incineration and eventually divert at least 90% of its waste from landfill, by maximizing source reduction, reuse, recycling and composting. This would stretch the life of the
landfill out tremendously. (Clean Air website)
Not surprisingly, Wheelabrator, the current operator of the BRESCO plant sees the matter differently. "As advocates of environmentally and fiscally responsible approaches to waste management, we disagree with the City Council's decision to advance this legislation without regard for its environmental or economic consequences," Jim Connolly, vice president of environmental health and safety for Wheelabrator stated. On its own campaign website ("get the facts, Baltimore"), the company stresses its environmental contributions:
By using local, post-recycled waste as fuel to create a local energy ecosystem, the facility diverts waste from landfills and lowers greenhouse gases by recycling metals, offsetting the use of fossil fuels and reducing methane gas emissions from landfills. Wheelabrator [...] provide[s] as much as 52 net megawatts of clean, renewable baseload energy for sale to the local utility after meeting its own power demands. That is enough electricity to power 38,000 Maryland homes. Wheelabrator Baltimore delivers “green steam” to the downtown district energy system operated by Veolia North America— which serves more than 255 businesses including M&T Bank Stadium.
National recycling rates hover around 30%, Baltimore is at about half of that. single stream recycling has been widely adopted in the US and has led to China closing its borders to US recycling shipments due to unacceptable contamination. After China dropped out of the recycling loop, even places with much more stringent recycling practices, such as Germany, had to find out that far more than half of their recycled waste still winds up in incinerators, landfills or foreign storage, dimming any hopes to drive waste production anywhere near zero.
BRESCO plant Baltimore: 700,000 tons of trash going up in smoke
(SUN photo)

Climate change, the growing dangers from plastic in our environment, and the continued health challenges from bad air in metropolitan areas force a drastic new course of action, unless one wants to ignore those ticking time bombs jeopardizing the future of our children.

Still, well intended bills won't do the trick, unless there is a clear path towards how the desirable outcomes can realistically be achieved. The adopted Baltimore City styrofoam ban now being considered statewide as part of this years legislative agenda in Annapolis is a good start, but much more has to happen on the waste reduction side before emissions on the waste management side can be effectively driven down.

Klaus Philipsen, FAIA

Additional information added Monday 2/11/19:

Mira Green, Senior Budget Management Analyst at City of Baltimore clarified via Facebook: In 2011 BRESCO received 415,000 tons of trash from the City and 285,000 tons from the County, both numbers include trash collected from households and commercial trash. Last year the City of Baltimore was billed for 159,000 tons of household trash collected by DPW, the County for 215,000 tons. This low City number suggests that the total City solid waste volume was potentially lower than in 2011 and that a substantial amount of waste comes from commercial haulers. It is also worth noting, that more waste came from the County than the City. The decision about the future of incineration, therefore, has truly regional consequences.

Wheelabrator has ramped up its propaganda against the Baltimore Clean Air Act in light of the final Council vote on Tuesday 2/12/19. Councilman Zeke Cohen alleges that the We can B'more  campaign started by the incinerator operator violates the Transparency in Lobby Act. (Video). He clarifies that the Incinerator wouldn't have to close down immediately upon passage of the bill but in 2021.

Baltimore SUN about Wheelabrator

Previous clean air and trash related articles on this blog:

Baltimore's air requires action

Monday, February 4, 2019

What is going on with Port Covington?

There were days when Marylanders could imagine Kevin Plank next to Steve Jobs, Mark Zuckerberg or Elon Musk. At least those who root for strong leaders and believe that economic development is tied to big business. Plank managed to grow his company in a nearly exponential way for twenty years and create a brand loyalty matching that for Apple, at least locally. In various articles on this blog it was discussed if Plank was a Baltimore Medici (Do Cities Need Sugar Daddies?) or if he could even solve the affordable housing crisis.
Local brand pride: "Protect this House" (Photo: Philipsen)

The winds have changed and with it the opinions about those heroes of innovation, disruption and refreshed capitalism. "Pride comes before the fall" is a German proverb that I grew up with and heard many times. A puritan Calvinistic dogma of not getting too uppity, because after the rise would, inevitably, come the fall. But isn't the American risk taking can-do attitude a lot more attractive than Old World admonitions not to stick your head up too far?

Still, all the heroes of the innovation industry now have egg in the face, from Zuckerberg to Musk, and, of course, also Plank.  Gone are the days of spending money on anything along the way, from horse racing to whiskey distilleries, from fish houses to luxury hotels, and from a maker space to water taxis, and a 30,000 sqft home in Baltimore County. Not to mention a new corporate headquarters surrounded by a $5 billion new town designed to make Nike look old. The  LinkedIn page of the CEO of Plank Industries, Tom Geddes, still exudes that optimism:
Plank at the height of his reputation
Plank Industries is a privately-held investment company with diversified holdings that include commercial real estate, hospitality, food and beverage, venture capital and thoroughbred horse racing. The company is based in Baltimore, MD, and serves as the family office of Kevin A. Plank, the founder, Chairman, and CEO of Under Armour, Inc. Key investment holdings include Sagamore Spirit and a major equity stake in the Port Covington redevelopment in South Baltimore. 
Geddes still sounded giddy in 2017 when Curbed quoted him as saying: 
“We haven’t done this in a transactional way; we consider this development fundamentally important to the city. What the team has put together is so significant, by the time it’s done, it won’t be thought of as the Under Armour project in the same way it’s thought of today.” Tom Geddes
Plank contrite: Responding to shareholders (SUN photo)
But later the same year Plank  told the Wall Street Journal."2017 sucked".
To assure his shareholders he had to tone it down and emphasize that his focus is on the company and not his private investments.

Now in 2019 it has become much quieter around the transformative Port Covington development; the "we build it together" commercials have long disappeared from the airwaves. It has become also quiet around the brand and its leader who in earlier days had issued inspirational pamphlets such as the Under Armour "bible" ("Protect This House - The Under Armour Code of Conduct") and had inspirational slogans printed on any available office wall.  Gone are the interviews with media from around the world.
The four pillars of greatness:
Make Great Product. Tell a Great Story. Provide Great Service. Build a Great Team. (UA Code of Conduct booklet)
At times of adversity, some of the hype and hyperbole which American media like to spin around corporate heroes can turn into assaults on their character in the way of the WIRED article about Elon Musk this month titled "Dr Elon and Mr. Hyde".
Under Armour auditorium in former
Sam's Club (Photo: Philipsen)

Proverbs and the media turn-around would be entertaining enough, were it not for the fact that communities and employees depend on the success of the disruptive companies and their celebrity leaders. The City of Baltimore hitched its wagon firmly behind the Plank horse. How much so is illustrated by the numerous events for which the Mayor and the City Council had appeared at Sagamore Development. It was also exemplified by the City doubling down on Port Covington for the failed bid for Amazon HQ2.

Port Covington was presumably the ready made bed into which Amazon could simply drop and rake in the entitlements and the big tax increment financing (TIF) benefitsWisdom on the street is that Amazon didn't select Port Covington and Baltimore because of crime, poor schools and insufficient public transport. But the reason was likely much simpler. Amazon's Bezos never wanted to rescue a struggling city, never intended to be economic development and always wanted to go where everybody else would also go. Without the glamour factor Kevin Plank brought to Port Covington while his brand was shiny, the spot looks rather sad.

In Smalltimore it is very difficult to get hard facts. Many real estate deals happen on a level of high secrecy which even the Baltimore Development Corporation BDC or well connected commercial real estate players can't quite penetrate. Which pieces of real estate are "on the market" and why? Is the Westport land sold or are Plank Industries looking for a $50 million equity partner? Who has signed leases for what in phase 1? Those who know don't want to reveal anything about the big players, especially not Under Armour and Goldman Sachs, the saviors that were supposed to lift this city out of its pessimism and inferiority complexes. Even if now under headwinds, they can still hurt you if you don't toe the line.

Who builds Port Covington? (WYPR photo)
In spite of that,  a few facts are well known:
  • No bonds have been issued for any part of Port Covington even though we are far beyond the construction begin anticipated in the TIF application (phase 1 in 2017).
  • Instead of expansion and a new campus UA is in the news for layoffs and contraction.
  • The private 35,000 sf Plank mansion to be constructed in Greenspring Valley has been put on hold
  • No new grant application was filed for the planned light rail extension into Port Covington.
  • Plank Industries which had invested in the Foundery maker space, taken a financial stake, and brought it into its own City Garage let the organisation "run out of runway before it was airborne" (Foundery CEO Jason Hardebeck to Baltimore Fishbowl)
  • The voice of Port Covington is no longer Kevin Plank or Tom Geddes but Marc Weller
The much touted community benefits agreement for the surrounding six communities called SB7 (Port Covington counts itself as one of the communities making it seven) would be a good bellwether. If the Port Covington project would be in trouble, the communities would likely feel the effects. The chair of the SB7 board, Michael Middleton who is also the executive director of the Cherry Hill CDC told me that the communities wondered about the future themselves. Inquiring about it,  they were told last year that whatever difficulties Under Armour may have, that there will be no effect on the community benefits agreement. Middleton says that so far "they have lived up to the agreement". He cited as examples the $50,000 grants that were dispersed to each community in two chunks in 2017 and 2018, the completion of a SB7 Strategic Plan and the ongoing technical assistance they keep getting including trips to a Purpose-Built Communities conference in Atlanta paid by Weller Development and the subsequent designation of Cherry Hill as a Purpose Built community two weeks ago.

Early this year, Weller Development is expected to fund a "Lego room" for early childhood support in the completed 21st century ES/Middle school in Cherry Hill. "Trust is so important", Hamilton says, explaining how Weller Development contact Alicia Wilson, Senior Vice President of Impact Investments, continues to play a key role in this trust. (She was just featured in Forbes). He continued "we [the six communities] have come together, we are now working together on all aspects of community life...this would never have happened without Port Covington".
That big investors, on which the City had pinned a lot of hope, fall on hard times is nothing new in Baltimore. Nor is it new that the details of the fall receive much less media attention than the rise. There was little specific info to be had when Bill Struever fell from his local hero status in the Great Recession when his, until then successfully expanding development and construction company Struever Brothers, Eccles and Rouse, went under. Or when developer Pat Turner fell from the lofty heights that brought Baltimore the first million dollar plus penthouse in Silo Point and later Baltimore's first big Middle Branch dream: Westport, envisioned as a new waterfront development with 2,000 residences, a 65-story skyscraper, offices, a stadium, a beach, a kayak launch area and running paths. Then, in a blink it was gone in foreclosure. (Plank Industries picked the cleared land up shortly thereafter). Struever and Turner have been staging a come-back lately, proof that scrutiny during the downfall can be risky, especially when fate of the City is so woven into their business. But no developer had ever been engaged in a community benefits agreement of the size of Sagamore's SB7.
Port Covington history as a coal transfer yard 

Little information is percolating outside the nearly impenetrable information management of  Sagamore/Weller Development: The Foundery closing its location in City Garage and planning to move back to Fells Point could be an indicator for bigger change at City Garage, but it is hard to verify this.

Is the fact that no tranche of the $600 million plus TIF has been bonded a sign that Weller's phase 1 development in Port Covington announced last fall is in trouble or further delayed?

In September 2018 Weller staged a media event showing renderings (here). This was followed  by a coup on October 18, when Weller announced a new twist for Port Covington: "Cyber Town USA". The Mayor and the Governor showed up when Weller Development revealed to have"nabbed" three tenants for a first phase of development on the mostly barren Port Covington lands:
Fulton-based cyber incubator DataTribe and Silicon Valley-born cyber investment firm AllegisCyber have both committed to moving to the South Baltimore project as it begins to take shape. They hope to help establish Baltimore as a global destination for technology and cybersecurity companies — "Cyber Town USA." (BBJ)
Under Armour headquarters rendering (2016 Screenshot)
The move came just in time to quell doubts that anything at all would happen on the massive land holdings of Plank Industries. Since then it has been quiet, too quiet. The fact that no money has been drawn to build roads and utilities nurtures doubts again. How firm are those commitments to lease in the Rye Street Market project? The project covers only a fraction of the overall area, but is still quite big: A mixed use complex with loft-style offices adding up to 162,000 square feet, plus a 13,000-square-foot outdoor market and food hall and 50,000 square feet of retail/restaurant space, plus a fitness center, all nestling around the already existing Sagamore waterfront distillery.  The time for build-out was given as late 2020 or early 2021. It seemed not impossible, even without UA as a direct player. Marc Weller can still work with the Goldman Sachs funds of $233 million said to be available for Port Covington.

For the project to become reality in the promised time-frame, design and construction on infrastructure would have to start very soon. Some of the proposed "Chapter One" development uses existing streets,could it mean that no TIF money would be needed? Is a groundbreaking imminent as soon as the ground thaws?
Rendering of phase 1 development "Chapter One" (website)
Goldman Sachs' investment promise came in 2017 when being in the orbit of Under Armour was still guaranteeing some pixie dust. The same isn't necessarily true today. So the October announcement pivoted away from Under Armour and its future headquarter to cyber security as the new driver. Each speaker at the announcement offered more hyperbole than the other:
“This will be the corporate headquarters of cyber innovation in the United States,” Bob Ackerman, AllegisCyber founder).
“The impact they will have cannot be overstated, some of these highly respected businesses are leaving Silicon Valley, which is thought to be the nation’s tech capital, in order to become part of something new and exciting. … With these companies on board, Port Covington is on course to become the first-of-its-kind cyber ecosystem.” Marc Weller, president and founding partner of Weller Development, as quoted in the SUN)
“Maryland has the largest cybersecurity employee population in the United States. We have the oil, the cyber-oil.” Mike Janke, co-founder of DataTribe
“Today, we are setting the tone for the great future of Port Covington, more innovative, pioneering companies for Baltimore, which will help to further establish Maryland as a national leader in technology and as the cyber capital of America.” (Governor Hogan)
The Foundery in UA garb at City Garage 
As usual, the proposed development was cast as nothing less than a "national model".

The 2018 idea of turning Port Covington into a world cyber hub is reminiscent of Bill Struever's turn of the century dreams of a "Digital Harbor" for which Tide Point was supposed to be the North Star. There is a lot of irony in how reality unfolded:

The dot.com bubble burst and Struever's Tide Point, of course, eventually became Under Armour headquarters. The shift from digital to apparel is still a great Baltimore success story and an example of a good use for an old factory, but it certainly wasn't planned that way.  What could be next?

With UA's lay-offs and contractions, the sprawling former Proctor and Gamble campus seems no longer as crammed. A much bigger new headquarters at Port Covington seems off the table for the foreseeable future. In other words, the question is, can the new town of Port Covington succeed without its flagship, Under Armour, as the trail blazer?  Can anybody market 13 million square feet of office, residential, retail and maker space with 40 acres of public parks on the waterfront without UA's new campus as the magnet? Especially in a time when it is more than likely that the red hot real estate market will contract? Can "cyber" once again be an engine that yields unforeseen results?
$5billion, 13 million square feet: Is there any need? 

This question should give Baltimore leaders sleepless nights, even though, so far, little public money has left City coffers for Port Covington. "The City is protective of it’s money – no bonds have been issued and the project will be well scrutinized", Kimberly Clark, Executive Vice President at BDC told me upon request. As it stands, nobody likes to scratch the already fading dream of the big economic engine named Port Covington. City leeaders believe in the professional integrity of development team and that the latest cyber dream is based on hard commitments.
Slogans at Under Armour's Sams Club
building (phto: Philipsen)

Nay-sayers and pessimists are numerous in Baltimore. Not everyone has bought into the notion that Port Covington could save Baltimore or even the surrounding communities. Not even after the record community benefits agreement had been signed. Cynics have poked fun of the Port Covington plans all along, never believing that Baltimore could pull off such a thing. Many people who lived most of their lives here love their city, but also harbor a deeply rooted skepticism around what is possible in Baltimore. The continued sub-par performance of Baltimore compared to most peer cities seems to prove them right.

There was something very inspiring about the fact that with Kevin Plank (and before him Bill Struever Pat Turner and others who didn't grow up here) there was someone who trusted the capacity of Baltimore and its people so much, that hundreds of millions of investment seemed fine. It was inspiring to see plans that were ambitious and stretched the envelope, using the best available practices and accommodating the common good with trails, open spaces, parks and even a new transit line. But except for a few bike paths and waterfront trails, the distillery and City Garage, all remains just an aspiration to date. Even if the cyber companies will actually come, how can the promised high standards of design and development be assured?

The notion that exceptional things can be done in Baltimore should persist. But deep down everyone knows, what this city really needs, is less physical and must focus on people instead. Investments of all kinds are needed als in in communities further away from the water. Better health, more security, better education, more equity, more access.

The SB 7 agreement ties physical and human development together. Cities are not zero sum games and a growing tax base is especially needed in Baltimore. Glitz and investment in communities is not necessarily mutually exclusive. That is why the communities surrounding Port Covington still hope for success.

Klaus Philipsen, FAIA
the article has been updated and corrected in various places

Westport sells for $6 million (Baltimore SUN Jan 28, 2015)
Kevin Plank's Sagamore amasses more land, this time in Westport (Baltimore SUN, July 10, 2015)