BALTIMORE – Harborplace’s owners are bankrupt. The opera company is closed. Foreclosure filings are up, as is unemployment. Unsold cargo is stacked at the ports. The Orioles have had to roll out their own stimulus plan. Trash will be collected less often, swimming pools will close, and in the city’s parks, the grass will grow a quarter-inch longer.
This is Baltimore in recession.
The past few fiscal years have been good ones, said Edward J. Gallagher, city finance director. “We’re a poor city, in terms of our wealth,” but due to a strong economy and booming housing market — which spun off more tax revenue — “we’ve had a reasonable level of resources.” Now, Gallagher said, “the good time is over with.”
“We’ve never seen anything like these times,” said Richard Burnham, who owns a printing shop in Charles Village. “You always see fluctuations in business, but never to this degree.”
Our Daily Bread, a charity providing hot meals to Baltimore’s hungry, has been host to a greater number of guests lately, including more families.
“We’re serving different types of people,” said Aaron Kennedy, the organization’s volunteer coordinator. “Suddenly there’s a very acute need.”
As the city completes work on the fiscal 2010 budget, its services and jobs will have to be cut, Gallagher said. He’s been reluctant to tap into the city’s rainy-day fund, which was established “in ’05 and ’06, when revenues were flowing like crazy.” Gallagher sees the fund as a last resort, to be used only if the city’s budget can’t cover spending by the end of the fiscal year.
Some on the City Council have a different view of what constitutes a rainy day.
“We have a thunderstorm,” said Councilman Bernard “Jack” Young (District 12) in February, at the beginning of the city’s budget process. “We have a volcano!”
The recession is only the latest challenge for the working-class city, which has already survived the decline in shipyards, the rise of the drug trade and its tough-as-nails portrayal on HBO’s “The Wire.” Fifteen percent of Baltimore’s families were already living below the poverty level, and more than one-third of households were earning less than $25,000 a year, according to 2007 census bureau data.
The recession’s impact can be felt all over the city and at many economic levels.
— Baltimore’s unemployment rate was 5.4 percent in December 2007. By December 2008, it had jumped to 8.3 percent. The rate reached 10.1 percent in March and is likely to increase, according to the Department of Finance.
— Residential foreclosure filings rose 8.6 percent from 3,854 in 2007 to 4,187 in 2008, according to the Baltimore Neighborhood Indicators Alliance. The city’s housing department predicts the weakening job market will push foreclosure rates even higher in 2009, when hundreds of adjustble-rate mortgages will reset, leaving many homeowners unable to meet higher monthly payments.
— Home sales have dropped 60 percent since 2005, and the struggling real estate market threatens city revenue. Transfer and Recordation Tax revenues, which the city receives from real estate sales, have fallen from $116 million in fiscal 2006 to an estimated $48 million in fiscal 2009.
— The Orioles launched the Birdland Stimulus Package to make a trip to the ballpark easier on a famiy’s budget. “The Birdland Stimulus Package serves to establish additional budget-friendly opportunities so that everyone can enjoy a day at the ballpark,” said Greg Bader, the team’s director of communications, in a press release.
The package includes reduced ticket prices for kids and students and free tickets on birthdays. Baseball fans with birthdays in the off-season can get vouchers for a ticket for a game in September.
— Cuts in city services include closing libraries on Sundays, shutting down three swimming pools and closing two remaining child-care centers run by the parks department.
— The city’s housing department will close one of its six Community Action Centers, which provide housing and health counseling, employment assistance and immunizations.
And trash will be picked up only once a week, though recycling will be collected more often. To save labor costs, grass in the city’s parks will grow a quarter of an inch longer before crews will mow.
— St. Ambrose Housing Aid Center in Charles Village has seen the number of people seeking foreclosure prevention assistance double in the past year. The center’s executive director expects this number to double again in 2009.
— For the laborers working at the Port of Baltimore, work hours are down by 25 percent compared to the same time last year, which equals a 25 percent pay cut. On any given day, 30 men could be forced to take the day off for lack of work.
“We used to be economy proof,” said Steve Lukiewski, a labor coordinator for the International Longshoreman’s Association Local 953. “When the dollar was down we imported more. When it was up, we exported more. Now imports and exports are down everywhere.”
The Baltic Dry Index, a number that measures the price to move materials by sea, reached a record high in May 2008. By December, it had dropped to its lowest point since 1986, a reflection of the decreased demand for cargo vessels as the worldwide recession means companies are selling fewer goods.
— Baltimore-based nonprofits are struggling with decreased donations and reduced endowments, finding themselves unable to assist the increased number of clients knocking on their doors.
— The United Way of Central Maryland faced a $4 million shortfall at the end of its fall 2008 fundraising campaign, and the organization is anticipating a 10 percent drop in donations in 2009.
“The demand for their services is going up, up, up, and the resources they have to draw on are going down, down, down,” Mark Furst, the central Maryland chapter’s chief operating officer, told the Baltimore Sun in January.
— Bon Secours Hospital, which serves low-income residents of West Baltimore, has been losing money for several years. The hospital recently received $5 million from the state to stay open another year and develop a new financial strategy.
— Every member of the Baltimore Symphony Orchestra volunteered to give back $1 million worth of salary increases and benefits to help the organization survive the recession. The musicians have also challenged supporters to raise an additional $2 million.
— Harborplace & The Gallery, the shopping center and tourist draw that was once the focal point of downtown Baltimore’s economic revitalization, has now become a sign of the city’s economic woes. More than a dozen empty storefronts are disguised with posters and memorabilia celebrating Baltimore sports, culture and history.
After nearly 30 years of business, Harborplace was put up for sale in December. And in April, General Growth Properties, the Chicago-based firm that owns the retail complex and several others in the region, filed for Chapter 11 bankruptcy protection.
— In December, the Baltimore Opera Company cancelled the remainder of its 2008-2009 season due to decreased ticket sales and contributions. In March, the 58-year-old company, once a staple of the city’s cultural and artistic community, entered Chapter 7 liquidation. Its assets are now for sale.
— The Hippodrome has cut next year’s subscription season from seven shows to six to keep subscription-ticket prices down.
Amid the citywide cutbacks and closings are a few signs of hope. A new Charles Village restaurant is not only getting its footing in the ailing economy — it is becoming a gathering place in the community.
The neighborhood of Locust Point has worked to become more self-reliant by distancing itself from the city’s budget and relying more on grants and fund-raising.
The police department even said crime has gone down during the recession, contrary to what conventional wisdom would suggest.
“People expect robberies to go up,” said department spokesman Officer Troy Harris. “But violent crime and property damage have gone down.” In the first week of May, violent crime was down 11 percent from the same time in 2008, gun crime was down 15 percent, and total crime was down 10 percent, the department reported.
By early May, Councilmember Young had found some grounds for optimism. “The addition of the [federal] stimulus money is helping to jump start some projects that have stalled,” Young said in an email. “And it has created some job growth.”
And Baltimore may be in better shape than some cities because of smart planning, according to Scott Peterson, a spokesman for the mayor’s office.
“Baltimore saw the writing on the wall in December 2007 and implemented a hiring freeze.” This freeze has helped make sure that many of the city jobs being eliminated are already vacant, keeping the actual number of layoffs small, Peterson said.
In a city with high property taxes, and a large population that lives paycheck to paycheck, “we have forces stacked against us,” Peterson said. “We’re still feeling the recession…but we haven’t asked for furloughs, we haven’t made cuts to the police, we’ve made very little cuts to the fire department.”
Some of the city’s cultural institutions are streamlining their operations as they look forward. “We are actually in a good place,” said Mindy Riesenberg of the Walters Art Museum. “We know it’s going to be a tough road and we’re going to tighten up our belts, but we should come out just fine.”
CNS-Urban Affairs writers Catherine Krikstan, Karen Anderson, Tina Irgang, David Johnson and Jon Sham contributed to this report.