Donald Fry -- Public-Private Partnerships: Maryland’s Technology Weapons

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Editor's Note: This is one in a series of articles in Corridor Inc.'s "Economic Impact" issue, which was published this month. Click here to sign up to receive a complimentary copy of the entire print issue.

By Donald C. Fry

As fiscally-challenged governments seek ways to attract private financing for needed capital improvements, elected leaders in Maryland and elsewhere are increasingly turning to public-private partnerships.

Since the 1980s, governments have entered into dozens of public-private partnerships for a wide variety of purposes ranging from transportation infrastructure to economic development. For the right to manage a road and to keep the tolls, a company might pay government a fee – often a large lump sum of cash up front, which the government can use to fund other infrastructure needs.

Maryland is currently engaged in a public-private partnership that will bring about a substantial upgrade at the Port of Baltimore’s Seagirt facility. Through the partnership, which was established in November 2009, Ports America is leasing and operating Seagirt for 50 years.

Ports America will invest more than $500 million to build a 50-foot deep berth at Seagirt, install new container cranes, and make other improvements to serve the new super ships. It also paid the state $140 million in cash to fund highway, bridge and tunnel projects around the port. Ports America will retain Seagirt’s revenue during the lease and make fixed annual payments to the state totaling as much as $1 billion over the life of the lease. The partnership is expected to generate $15.7 million a year in state and local tax revenue.

The new, improved Seagirt will generate an estimated 2,700 permanent port-related jobs and 3,000 construction jobs to build the berth and to make highway improvements. That’s 5,700 jobs that would not have been possible without this public-private partnership.

The Greater Baltimore Committee is championing a different kind of public-private partnership in proposing the development of a new 18,500-seat arena, connected to an expanded convention center and a 500-room hotel in Baltimore.

Under the concept, private investors would build and own a new $500 million arena and hotel that would be connected to a $400 million expansion to the Baltimore Convention Center, proposed to be funded by the state and city.

The partnership would produce $900 million worth of capital facilities – 56 percent of which would be financed by the private sector. The project would resolve two pressing capital needs – to replace the nearly 50-year-old First Mariner Arena and more than double the size of the Convention Center, making it exponentially more competitive and significantly increasing visitor travel to Baltimore, boosting the economy and creating new jobs and revenue for the state and city in the process.

This proposed public-private project would create an integrated, highly flexible convention center and attached sports arena that would catapult Baltimore into a leading competitive position in major convention and event markets. Once it is completed, Baltimore could compete for more than 300 new convention events that the current Convention Center can’t accommodate, as well as major NCAA sports events and other entertainment events that now bypass the Baltimore region.

Not only that, the new arena, hotel and expanded convention center would also serve as a catalyst for fresh development in the Inner Harbor area.

Successful public-private partnerships create a “win-win-win” for government, private partners, and taxpayers. In Central Maryland, the Seagirt and arena-convention center partnerships are two examples of well-conceived projects that will benefit all parties and improve the region’s business climate and quality of life.

As state and local governments seek ways to finance major capital projects and to remain competitive in the post-recession economy, expect to see more leveraging of private-sector resources to meet the capital needs of government.

Donald C. Fry is president and CEO of the Greater Baltimore Committee.
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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.