- Emmanuel Mehr
B&O to Inner Harbor: Building Baltimore through Public-Private Partnerships — Part One
BHW 55: February 17, 2024
In February 1827 and January 1955, Baltimorean business leaders gathered to express grave concern about the city’s economic future. Both meetings resulted in immense public-private partnerships (PPPs). These projects greatly contributed to Baltimore’s economy while perpetuating structural inequities. The 1827 meeting was held at the home of prominent Baltimorean banker George Brown. [2] Calling themselves the “Sundry Citizens of Baltimore,” attendees worried their city was falling behind its regional competitors in the quest to develop trade with “the Western states.” [3] After considering the merits of canals and other forms of transportation infrastructure, they ruled a westward railroad from Baltimore was the best option to ensure future prosperity. [4] They submitted a railroad charter proposal to the Maryland legislature, which passed easily that same month. [5] The Baltimore & Ohio (B&O) Railroad was created, with shared ownership between private interests, the City of Baltimore, and the State of Maryland. It was the first public-private corporation in the history of the United States. [6] The 1955 meeting, on the other hand, was likely held in a downtown Baltimore corporate office. Its attendees were also local business leaders concerned about their city’s economic position relative to other urban centers. White Baltimoreans were migrating to the suburbs in surging numbers, causing these businesspeople to worry about the city’s future. They formed the Greater Baltimore Committee (GBC) to revitalize the downtown core. Its first significant project was the Charles Center shopping complex, which paved the way for the GBC’s greatest endeavor: redevelopment of the Inner Harbor. [7] Like the B&O, the Charles Center and Inner Harbor developments relied on PPPs. In all these cases, PPP projects displaced and disinvested in Baltimoreans. Business leaders and politicians prioritized urban renewal agendas over the interests of the Baltimorean people. These histories show how public-private development can perpetuate inequities through disinvestment in local communities.
In 1827, Baltimore’s “Sundry Citizens” understood that their proposed railroad project would require an unprecedented mobilization of capital. It was clear that the railroad would require the pooling of public and private economic resources. The citizens asserted that investments in the B&O needed “to be made by the United States, by States, Corporations or Individuals.” [8] As historian Mary P. Ryan emphasizes, the sheer capital required for such a railroad “could not be acquired through personal networks of credit or conveyed by exclusive state monopolies.” [9] A PPP was thus deemed necessary and justified. Both the Baltimore City Council and the Maryland legislature voted to purchase substantial stock in the B&O, committing taxpayer dollars to its success. Individual Baltimoreans also purchased stock in the company. The B&O subscription books opened on March 20, 1827. Baltimore’s American & Commercial Daily Advertiser reported: “The books will be kept open for the ensuing nine days, in order that all who feel disposed may have an equal opportunity of subscribing to the stock.” [10] Demand was so great that the books remained open for twelve days. 41,788 shares sold in Baltimore City alone, amounting to $4,178,000 in 1827 dollars. [11]
In contrast to the “Sundry Citizens,” the founding members of the GBC included substantial public capital in their original proposals. The GBC’s Planning Council was formed in June 1956 and quickly agreed on the Charles Center project as their first priority. The estimated cost was $127,170,000. As the Sun reported, “Of this amount, 86.5 per cent would be privately financed. The remainder, $17,205,000, would be paid for by the city.” [12] The GBC did not intend to use any federal funds for the project. However, modifications to federal legislation in 1960 opened new funding opportunities that the GBE welcomed. While Charles Center combined private capital with city and federal funds, it remained predominantly privately funded. This contrasts with its Inner Harbor successor, which relied heavily on public funds. [13] Economic historian Katherine C. Lyall points out that, “The Inner Harbor project reversed the financial ratios of Charles Center, with 88 percent of the total investment coming from the public sector.” [14] Charles Center’s heavy private funding aligned with the GBE’s early vision. The organization was created as a Baltimorean version of Pittsburgh’s influential Allegheny Conference on Community Development. Crucial to this Pittsburgh model was the attendance of senior executives at its meetings. By ensuring attendance by representatives with unilateral executive authority, the Pittsburgh group efficiently finalized commitments and agreements. The GBC used a similar model. It was founded as an action-oriented group of chief executive officers representing the largest businesses in Baltimore. [15] Their companies relied on Baltimore’s economic vitality, so they took a direct interest in revitalizing the city’s downtown. Unlike the B&O and the Inner Harbor, Charles Center was not framed as advancing the direct interests of the Baltimorean people.
It is important to not let the framing of the B&O as a public good and in Baltimorean community interest detract from how the project exacerbated the city’s structural inequities. Historian David Schley articulates this exclusionary dynamic well, writing: “Only with mutual understanding between Baltimore’s mercantile elite, the city and state governments, and the urban citizenry would Baltimore complete its railroad . . . The citizenry in this construction did not represent Baltimore’s populace as it existed but rather a white male artisan and industrial class.” [16] In this way, the B&O vision reflected the demographics of its creators, the wealthy male Baltimoreans who gathered at Brown’s estate in February 1827. While working-class Baltimoreans provided much of the physical labor to construct the railroad and its infrastructure, it was not built with their interests in mind. Baltimore’s government frequently sided with the B&O in labor disputes, demonstrating that this public-private partnership was designed to advance white, male, propertied interests. [17] The politicians in the Baltimore City Council and Maryland General Assembly who voted to invest in the project were largely white men. The publicly sold shares also likely went to mostly white male Baltimoreans, continuing the unequal distribution of wealth along lines of race and gender.
The GBC understood that even if the Charles Center project was overwhelmingly privately funded, it still required city cooperation for logistics and site clearance authorizations. [18] Baltimore’s Urban Renewal and Housing Agency fulfilled these roles. Its activities are outlined in the Charles Center Urban Renewal Plan, which makes clear the project was designed with local business interests and investment promotion in mind. It emphasizes that, “Between 1952 and 1957, the taxable base in the Central Business District decreased by 10%.” [19] This disinvestment concerned business leaders and city economic strategists alike. The report also recognizes the direct role of the GBC, stating, “Voluntary private leadership and interest have come forth as the city awakened to the need for aggressive action. In 1955, the greater Baltimore Committee was formed with Downtown revitalization as one of its major objectives.” [20] The report makes clear the need for PPPs to accomplish urban renewal: “The Plan is the tool required to put together this indispensable Downtown urban renewal undertaking. It will translate the concept into a course and basis for action—complete with the provisions needed to enable cooperative activity between public and private interests.” Furthermore, “Both public and private resources are required to build Charles Center. It is not a project which can be completed successfully by either resource alone.” [21] The remainder of the report outlines the specific types of zoning and the necessary “standards and controls.” [22] While this report is most useful for understanding the official city role in the project, its strong emphasis on the importance of PPPs is striking.
The Charles Center plan did not attempt to improve the lives of the general Baltimorean population. Its focus on increasing the city’s tax base and investment capital disproportionately served the interests of wealthy, white Baltimoreans. In outlining the areas of downtown set for demolition, no mention is made of Baltimoreans who lived in or used these spaces. The same is true of the outlined “Property to be Acquired.” Laying claim to this land with no regard for previous occupants, “The City of Baltimore will acquire for redevelopment purposes the fee simple title in and to all the property within the above described Project Area.” [23] In a 1965 report “prepared for members of the Baltimore City Council,” the Urban Renewal and Housing Agency noted: “Since 1951, close to 9,000 households (through 1964) were relocated as a consequence of renewal and housing activities.” [24] Baltimore’s African American population increased every year from 1920 to 2000, and downtown redevelopment impacted this group disproportionately. Similarly, when the B&O built its rail infrastructure through the city in the previous century it displaced entire Black communities. Describing the B&O’s selection of a site for Camden Station, the Sun reported: “The peculiar section of the city which has been selected must find favor with all. At present it is entirely occupied by rude and dilapidated tenements, and exceedingly unpromising in its appearance.” [25] No mention was made of the people who lived in those homes.
The “Sundry Citizens” in 1827 and the GBC in 1955 mobilized capital to improve Baltimore City’s position relative to its economic rivals. Public and private interests worked together to strengthen the city’s economy and invest in future civic prosperity. The “Sundry Citizens” orchestrated the creation of the B&O and the GBC led the development of Charles Center a century and a quarter later. In both cases, structural inequities in Baltimore society meant that mostly white male Baltimoreans enjoyed the rewards of these projects. Baltimoreans outside of this group were more likely to be displaced by these developments. The B&O became increasingly privatized over the course of the nineteenth century. Increased private sector influence on its board of directors led to continued disinvestment in Baltimorean communities. Private investors reaped large dividends while the municipality struggled with the debts incurred by its B&O investments. The city never received the B&O return on investment its leaders initially hoped for. By extension, Baltimorean taxpayers did not receive the benefits reasonably expected from their tax dollars. The Charles Center project was more successful since its goal was economic stimulation rather than benefiting the public. However, it provided a foundation for the Inner Harbor redevelopment of the 1970s, which relied on immense public funds without proportionately benefiting Baltimoreans. Next week’s feature article will consider this story together with the increased privatization of the B&O.
[1] Baltimore Urban Renewal and Housing Agency, “Charles Center/Inner Harbor/Urban Renewal - Charles Center – Pamphlet,” c. 1962, University of Baltimore, Baltimore Studies Archives, Greater Baltimore Committee Records (R0046), Planning Council, Box 30, Folder 4, https://archivesspace.ubalt.edu/repositories/2/archival_objects/52391.
[2] John F. Stover, History of the Baltimore and Ohio Railroad (West Lafayette, IN: Purdue University Press, 1987), 14, https://archive.org/details/historyofbaltimo0000stov.
[3] Sundry Citizens of Baltimore, Proceedings of Sundry Citizens of Baltimore, Convened for the Purpose of Devising the Most Efficient Means of Improving the Intercourse between that City and the Western States (Baltimore: William Wooddy, 1827), 4, https://play.google.com/books/reader?id=r28hAQAAMAAJ.
[4] Sundry Citizens of Baltimore, Proceedings of Sundry Citizens of Baltimore, 8.
[5] Stover, History of the Baltimore and Ohio, 17.
[6] Kathleen Waters Sander, John W. Garrett and the Baltimore & Ohio Railroad (Baltimore: Johns Hopkins University Press, 2017), 45, Kindle edition.
[7] C. Fraser Smith, William Donald Schaefer: A Political Biography (Baltimore: The Johns Hopkins University Press, 1999), 107-109, https://archive.org/details/williamdonaldsch00smit.
[8] Sundry Citizens of Baltimore, Proceedings of Sundry Citizens of Baltimore, 31.
[9] Mary P. Ryan, Taking the Land to Make the City: A Bicoastal History of North America (Austin: University of Texas Press, 2019), 220, Kindle edition.
[10] “TUESDAY, MARCH 20, 1827,” American & Commercial Daily Advertiser (Baltimore, MD), March 20, 1827, 2, https://news.google.com/newspapers?id=-55CAAAAIBAJ&sjid=5rkMAAAAIBAJ&pg=6343%2C2209734.
[11] “BALTIMORE AND OHIO RAIL ROAD COMPANY,” American & Commercial Daily Advertiser (Baltimore, MD), April 2, 1827, 2, https://news.google.com/newspapers?id=BZ9CAAAAIBAJ&sjid=5rkMAAAAIBAJ&pg=5928%2C2573694.
[12] Colin MacLachlan, “The Men Behind the Charles Center,” Sun (Baltimore, MD), March 30, 1958, A1, https://www.newspapers.com/image/375108120/.
[13] Smith, William Donald Schaefer, 109-110.
[14] Katharine C. Lyall, “Public-Private Partnerships in the Carter Years,” Proceedings of the Academy of Political Science 36, no. 2 (1986): 11, https://www.jstor.org/stable/1173895.
[15] Jon C. Teaford, The Rough Road to Renaissance: Urban Revitalization in America, 1940-1985 (Baltimore: Johns Hopkins University Press, 1990), 46-48, https://archive.org/details/roughroadtorenai0000teaf.
[16] David Schley, Steam City: Railroads, Urban Space, and Corporate Capitalism in Nineteenth-Century Baltimore (Chicago: The University of Chicago Press, 2020), 19, Kindle edition.
[17] Matthew A. Crenson, Baltimore: A Political History (Baltimore: Johns Hopkins University Press, 2017), 136, https://archive.org/details/baltimorepolitic0000cren.
[18] Smith, William Donald Schaefer, 109.
[19] Baltimore Urban Renewal and Housing Agency, “The Charles Center Urban Renewal Plan,” 2.
[20] Baltimore Urban Renewal and Housing Agency, “The Charles Center Urban Renewal Plan,” August 1962, University of Baltimore, Baltimore Studies Archives, Greater Baltimore Committee Records (R0046), Planning Council, Box 29, Folder 8, 3, https://archivesspace.ubalt.edu/repositories/2/archival_objects/52363.
[21] Baltimore Urban Renewal and Housing Agency, “The Charles Center Urban Renewal Plan,” 4.
[22] Baltimore Urban Renewal and Housing Agency, “The Charles Center Urban Renewal Plan,” 7, 10-12.
[23] Baltimore Urban Renewal and Housing Agency, “The Charles Center Urban Renewal Plan,” 5-7.
[24] Baltimore Urban Renewal and Housing Agency, “Current Achievements and Status of Baltimore’s Urban Renewal Program, Prepared for Members of the Baltimore City Council,” May 17, 1965, 5, https://archives.ubalt.edu/gbc/pdfs/R0046_GBC_S12_B28_F040.pdf.
[25] “Great Railroad Improvement,” Sun (Baltimore, MD), July 3, 1852, 1, https://www.newspapers.com/image/365267019/.