I, like many people concerned about downtown Hagerstown, am intrigued about the recent presentation by Sora Development to City Council. Sora suggested the city retain them to be Hagerstown’s master developer. The first step would be to engage a cross-section of stakeholders in creating a vision plan to guide redevelopment. Once the vision plan is adopted, Sora would develop priority projects. Since these priorities would reflect those of the city, they favor a model of collaboration referred to as private-public partnerships to increase the prospects for success.
Coincidentally, David Birtwistle of Balfour Beatty Construction Co. spoke on the topic of public-private partnerships to a Chamber of Commerce breakfast meeting just a few days earlier. Using the term “P3,” he defined public-private partnerships as a contractual agreement between a public entity and a private entity for the delivery of a service or project. While there are some disadvantages, P3s have a host of advantages for any local government that chooses to use these partnerships to solve development and infrastructure problems. One of the biggest advantages is that P3 can access a wider range of options for financing construction of a major project needed by the city.
However, P3s are not a cure-all. They are not free. No private entity will enter into such a partnership without a guaranteed return on investment. Government must pay in some way, usually by directing revenue to the partnership. Such revenue might include fees, rents, designating taxes generated in special taxing districts, assigning incremental real estate tax revenue generated by the appreciation of commercial property surrounding a project, or entering into a future set-price repurchase agreement.
Any contract of this kind is complex and must go into great detail so as to prevent there from being any surprises. Such a contract must lay out in detail the project scope, cost, revenue sources, responsibilities and accountabilities. It takes time to negotiate these issues to ensure that the long-term public interests are served. It takes even longer when negotiations take place in public work session, as seems to be the intent of the current city council. Transparency and public support is critical, but it does add to the time needed to complete a contract.
Even if the city council moves forward only with a vision plan-type process while simultaneously negotiating a master developer contract, nothing will be finalized until the fall. To complicate things, two major decisions facing our community, I fear, will not wait until the fall. These two major decisions are new office space for the Board of Education and construction of a new stadium.
A recent report on the physical condition of the BOE central office describes the poor conditions and financial consequences of remaining in the building. After years of neglect, it no longer can be ignored. The Board of Education is currently collecting information and evaluating options for new office space. The process is moving rapidly. The decision about new central office space might not wait until a vision plan is finished.
The second issue is the future of the stadium. The previous city council determined the downtown site was preferred because it would serve as a catalyst for revitalization. This decision has been endorsed by the Ripken Group, virtually every group with an interest in downtown, and is addressed in the Economic Development Strategic Plan that was released Saturday morning. The new city council seems to be uncertain about the proposal, instead considering a vision plan or similar process to either revise or confirm the proposal.
In the face of the city council’s uncertainty, Hagerstown Suns ownership declared that an answer on a new stadium needs to be provided by Opening Day 2013. Needless to say, the vision plan will not be complete by April 4.
The city council seems to have merged the idea of downtown revitalization and planning for reinvestment in the East End into one process. Engaging a master developer to focus on that part of the city that starts at the old hospital site, goes east and winds along Memorial Boulevard to City Park has tremendous potential. However, I am of the opinion that the BOE and stadium issues are so critical to the future of the entire city that they need to be addressed now.
Without immediate action, I fear the city will lose not only the BOE central offices, but also the Suns. The council can play a major part in keeping these two within the city. But, if the council doesn’t do something soon, then decisions might be made by the Suns or the BOE to leave the city. Once they are gone, what will we celebrate? The city will have a great vision plan, but will have lost two of the best catalysts to implement that vision.
David Hanlin is a Hagerstown resident. His email address is firstname.lastname@example.org.