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This tax credit proposal could lead to more incubators in Baltimore

Baltimore-based legislators Bill Ferguson and Brooke Lierman want to make a “small but important amendment” to the One Maryland Tax Credit.

Emerging Technology Centers President Deb Tillett. The incubator launched in 1999 with public support. (Photo by Flickr user Maryland GovPics, used under a Creative Commons license)

Just because startup incubators don’t employ dozens of people directly, that doesn’t mean they shouldn’t be eligible for the same economic development tax credit other spaces get.
That’s the argument two Baltimore-based state lawmakers are making with a pair of bills that were heard in Annapolis during the current legislative session.
The bills were filed by Sen. Bill Ferguson in the Senate and Del. Brooke Lierman in the House. They look to make a “small but important amendment” — as Lierman put it — to the One Maryland Tax Credit.
As currently written, the credit can provide up to $5 million to companies that are building a project. The project must create at least 25 full-time jobs. That leaves out incubators, since the jobs created are provided by companies within incubators, rather than the incubators themselves.
“HB810 adds a line … that in the alternative, a company may qualify if it is a business incubator that creates at least 25 jobs at the facility,” Lierman told the House Ways and Means committee on March 13.
At that hearing and a separate Senate Budget and Taxation Committee session on Feb. 25, representatives from Johns Hopkins University and the University of Maryland testified in favor of the bill. Lierman specifically mentioned Betamore as an example of a successful incubator in Baltimore City.
Jane Shaab, executive director of the UM BioPark in West Baltimore, said the law will help the university develop a new building. The new space will be 225,000 square feet, and include an incubator, Shaab said.
Incubators and accelerator programs are a proven way of nurturing a startup ecosystem. But private companies typically don’t want to be sole investors in incubators because of the cheap rent they charge and other overhead costs that prevent the companies from recouping construction costs, said Andy Frank, special adviser for economic development to Johns Hopkins University President Ronald Daniels.
As a vice president for the Baltimore Development Corp., Frank previously worked on getting the two Emerging Technology Centers incubators up and running.
“Without government. partnership, without these incentives, these two successful centers would not have been built,” he said.
Comcast lobbyist Sean Looney was also on hand at the Assembly hearing to voice support. He noted that the telecom giant is currently supporting Maryland incubators with “cash and in-kind support.”
The panels did not immediately vote on the bills. The fate of many bills will be decided by the General Assembly’s “crossover day” — when each body tells the other what measures they intend to pass. This year’s crossover day is March 23.

Companies: Maryland General Assembly / Emerging Technology Centers (ETC Baltimore) / University of Maryland BioPark / Bio-Rad Laboratories / Betamore / Comcast
People: Bill Ferguson

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