BALTIMORE — Maryland Gov. Larry Hogan (R) unveiled legislative initiatives Thursday aimed at encouraging private investment to revitalize some the state’s most depressed communities.
During a news conference, Hogan promised to take advantage of “opportunity zones” or areas designated by the U.S. Treasury Department where investors can qualify for capital gains tax breaks.
In addition to the federal program, the governor also proposed spending $56.5 million in state money for job-training programs and tax incentives to “supercharge our opportunity zone revitalization” and transform those parts of Maryland that have struggled economically.
“Our plan is to make Maryland’s 149 opportunity zones the most competitive ones in America,” Hogan said while standing in front of the Walbrook Mill construction site, an opportunity zone project that will convert an old lumber mill in West Baltimore into a residential and commercial hub near Coppin State University.
About a quarter of Maryland’s opportunity zones, which were created by the Trump administration’s 2017 tax overhaul law, lie in Baltimore. More than two dozen exist in Prince George’s County and dozens more are scattered across the Maryland panhandle and Eastern Shore.
The business-friendly governor will need to convince a General Assembly with a Democratic supermajority to approve his plans to use millions in taxpayer dollars to entice businesses to not just build projects but train workers, create affordable housing and spread opportunity to neighborhoods usually bypassed by developers.
This latest proposal builds on Hogan’s campaign promises to improve the state’s business climate — plans that so far have fallen short of the governor’s stated goals, according to Democrats. Experts say Maryland’s recent economic growth has been slow compared with its regional neighbors.
Although unemployment is down and the state has been adding jobs, Maryland’s competitiveness has come into question after a failed bid for Amazon.com’s second headquarters project, part of which is headed for Northern Virginia, and after news that General Motors will shutter a plant in Baltimore County. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
With the legislative session beginning next week, Hogan plans to introduce bills to offer a 10-year tax credit to businesses in opportunity zones while also exempting them from state property taxes and business fees.
The administration also plans to set aside $3 million for a competitive grant program for businesses in opportunity zones to train workers. He will also ask the legislature for $16 million to create a technology infrastructure fund to be overseen by an independent governing board. This group will develop a long-term plan to bring life science and cybersecurity firms to the state.
Hogan also signed an executive order tapping Lt. Gov. Boyd K. Rutherford (R) to head a task force that will coordinate with local governments over how to use state and federal tax incentives, grants and other tools to stoke investment in neighborhoods that need it.
The federal government’s opportunity zone program will “take depreciated assets and bring them back to life again. . . . We have projects dialed up right now,” said Kenneth Holt, the state’s secretary of housing and community development, ticking off a list of revitalization projects in Frostburg, Cambridge, Indian Head and the Pimlico Race Course in Baltimore.
Holt’s department developed what he said is the first-of-a-kind virtual meeting place and public website to help potential investors identify eligible communities and learn about the incentives available to businesses located in opportunity zones.
Since 2001, Glenn Smith has lived in the Coppin Heights neighborhood. He has worked closely with his neighbors on a master plan that they completed in 2013 that would develop the neighborhood without displacing longtime residents.
Wary of gentrification, the community development group knew what it wanted but could not attract the capital to implement its vision.
The $20 million Walbrook Mill project in their opportunity zone could be the linchpin that will bring years of planning to fruition, he said.
“We’ve been trying for years to transform this area,” said Smith, 69. “But with this investment we can finally bring in a mix of residents and amenities that will spur economic development all along North Avenue.”