Baltimore Mayor Pugh’s plan for $55 million investment fund meets City Council resistance

Baltimore City Council President Bernard C. "Jack" Young, center, and Councilman John Bullock, center right, introduced legislation to create a dedicated funding stream for the Affordable Housing Trust Fund created in a 2016 ballot initiative. (Kenneth K. Lam / Baltimore Sun)

Baltimore Mayor Catherine Pugh’s proposal to raise $55 million by leasing publicly owned garages and then use the money to create a neighborhood investment fund is meeting resistance from City Council members who demanded more details as they continue to scrutinize the budget this week.

The mayor wants to use the $55 million as seed money for what she is calling the Neighborhood Impact Investment Fund, which would be run by a board that would attract additional money to be invested in some of the city’s most distressed communities.

But during a budget hearing Wednesday, a majority of the council expressed frustration that the administration had not shared details about how the fund would operate: Council members were not clear on which neighborhoods would receive investments, which projects the fund would finance and who would be accountable for investment decisions.

Council President Bernard C. Jack Young said his biggest concern was who would be appointed to the board of the nonprofit entity that is being proposed to manage the fund.

“The board is going to determine whether communities that need this shot in the arm are really going to get it,” Young said.

Colin Tarbert, an aide to Pugh, represented the mayor at what was initially scheduled to be a 30-minute hearing. But the session ran for over an hour, requiring Tarbert to come back later to try to answer more questions.

“The goal here is to really create a new era of funding for neighborhoods,” Tarbert said.

The fund is based on similar efforts in other cities, he added.

Pugh representatives said Wednesday that the city’s spending board, which the mayor controls, is scheduled to approve the $55 million deal to lease three garages next month. The funds could then be placed under the control of a new nonprofit entity by the end of July, subject to a loan agreement that officials say would set terms about how the money could be spent.

Tarbert said the nonprofit’s board would initially be made up of civic leaders and would include some city officials. Investors in the fund — such as banks or large charitable foundations — could also demand representation on the board, Tarbert said.

The money would be invested in housing and commercial projects in areas deemed to be distressed by the federal government, but Tarbert did not provide specifics.

Councilman Ryan Dorsey said he had not been briefed on the proposal ahead of the hearing but had come to understand that his colleagues didn’t think the mayor’s team had a plan.

“I know that you think you should come up with a plan after we give you the go-ahead but that’s not how things work in the real world,” Dorsey said. “I can’t go to a bank and ask for a mortgage for my home and tell them I’ll work out a repayment plan with them later.”

Councilman Brandon Scott questioned the administration’s haste and asked whether the council could have a greater say in the creation of the fund — all that’s required in the current proposal is for the council to sign off on the initial $55 million.

Scott said it looked as though the council was being asked to give the fund “carte blanche” to do as it pleases with the money.

“That’s tough for me to stomach,” he said.

Councilwoman Mary Pat Clarke said the composition of the board would be critical. And without guarantees of transparency she said the project could look to the public like something that “began with their money and ended in a mystery room where people they don’t know decided how to spend it.”

Gregory Tucker, an adviser to Pugh, said it was important for the fund to be separated from city government.

“Independent investors want to rely on independent decision making and sound investment propositions — not political considerations,” Tucker wrote in an email.

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