Sex and the City’s Subsidies in Baltimore

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Critics of urban economic development often complain that municipal officials are too cozy with developers – giving away the subsidy candy store for projects in burgeoning urban real estate markets. Now Baltimore Mayor Sheila Dixon is at the center of a controversy in which, it appears, she was literally in bed with one particular developer.

Dixon recently acknowledged that while City Council president she had a “personal” relationship with Ronald H. Lipscomb, a prominent Baltimore developer. This relationship, lasting from late 2003 to early 2004, is now fodder for a state investigation into city spending practices.

Even though Baltimore code (Art. 8 Sec. 6-27) bans public officials from accepting gifts “…from any person that the public servant knows…has a financial interest that might be substantially and materially affected …by the performance or nonperformance of the public servant’s official duties,” Dixon allegedly accepted lavish gifts (including fur coats and pricy airline tickets) from Lipscomb. But state prosecutors are finding that it’s Lipscomb who may have benefited the most from the relationship.

Dixon has acknowledged that, as Council president, she “twisted some arms” to facilitate a subsidy deal for a development spearheaded by Lipscomb’s Doracon Contracting and Struever Bros. Eccles & Rouse. In 2003, the city gave the Frankford Estates residential development almost $6 million in tax increment financing, an $800,000 grant, and land worth $237,000. It also waived $47,600 in building permit fees.

But that’s not all: During Dixon’s tenure as president, the Baltimore City Council also approved a 15-year “payment in lieu of taxes” subsidy worth roughly $7.2 million for The Zenith, a downtown apartment tower for which Doracon served as a contractor, and a 20-year tax break worth $13.6 million for a joint venture between Lipscomb and two other developers for a residential development called Spinnaker Bay.

State investigations into city spending practices have been ongoing since a March 2006 Baltimore Sun series questioned Dixon’s role in approving city contracts with Union Technologies, which was employing her sister at the time. Union Technologies’ owner has since pled guilty to tax evasion charges and agreed to cooperate with further investigations.

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