Developer's Tax Advantage Criticized
Special Terms Apply to Fort Meade Project

By Susan DeFord
Washington Post Staff Writer
Thursday, September 13, 2007

Some government officials and local business people near Fort Meade are concerned about what they call an unfair tax advantage for one developer of federal land at the Anne Arundel County military installation.

They say that Trammell Crow Co. will not be required to pay property taxes and local impact fees that could amount to millions of dollars for much-needed infrastructure improvements, such as road widening and water and sewer lines to accommodate the massive expansion planned at Fort Meade.

"It's a high-priority issue for me," said Anne Arundel County Executive John R. Leopold (R). "Because of the enormous infrastructure needs of this county, it's altogether fitting and proper that we insist that Trammell Crow pay its fair share."

Property taxes are not levied on federally owned land, however, and a 2005 state law exempts Trammell Crow from paying local impact fees, county officials said.

Last November, after competitive bidding, Army officials selected Trammell Crow as the exclusive developer of 540 acres owned by the installation, land just outside the gates. Trammell Crow plans to construct a business campus with 2 million square feet of office space on part of the land over the next decade to accommodate defense contractors. The campus, which is estimated to cost $600 million to $700 million, could be home to as many as 10,000 new workers.

Trammell Crow and Fort Meade officials are negotiating a 50-year lease on the land under what the military calls an "enhanced use lease" program.

The military has pursued such leases around the country in the past few years because they attract developers that will provide needed facilities and services in exchange for the use of prime federal land.

In return for being able to lease the land at Fort Meade, Trammell Crow will build two 18-hole golf courses at the intersection of Maryland routes 175 and 32 and will provide other services that are being negotiated. The existing golf course on the post will be developed as part of the expansion.

It's expected that 22,000 jobs will come to Fort Meade property in the next few years, as part of the Pentagon's 2005 Base Realignment and Closure (BRAC) decisions and the growth of the National Security Agency.

"The challenges are enormous. When I think about the needs, I have to secure the resources wherever I can," Leopold said.

Leopold said he is pursuing the issue of fees and taxes with Fort Meade's commander, Col. Kenneth O. McCreedy, and other Army officials. McCreedy said in an e-mailed statement Tuesday that the Army and developer "acknowledge that we bear shared responsibility with other jurisdictions for addressing the impact of growth."

"We look forward to continuing to work with the state and county to prepare for BRAC," he said.

Trammell Crow Senior Vice President Mark S. Corneal noted that basic services for the planned office park, such as fire and police protection, will be provided by Fort Meade rather than the county.

"We shouldn't be asked to pay for more than our fair share," said Corneal, who works in Trammell Crow's Washington office.

The issue, which has simmered among local officials for several months, arose again during a meeting Monday in Columbia that drew state, county and Fort Meade officials as well as business people.

During the session, John D. Porcari, Maryland secretary of transportation, said the planned lease at Fort Meade, like similar arrangements at other Maryland military bases, is "problematic for us, quite frankly."

"We did not anticipate the very substantial development, the substantial impact on transportation and public infrastructure use," he said. "BRAC growth should have to pay its fair share."

Similar leases are being negotiated at Aberdeen Proving Ground in Harford County and Fort Detrick in Frederick County, said Bob Penn, director of the enhanced-use lease program for the Army.

Robert C. Leib, Leopold's special assistant for base realignment issues, said the Trammell Crow project will affect already crowded roads. Local officials would like to extend Odenton Town Center Boulevard to the site Trammell Crow is developing, to ease congestion on Route 175, he said.

Although the company is not subject to the county's development impact fees, "there is an impact," Leib said. "How do you measure that?"

Howard County Executive Ken Ulman (D) said he is concerned that the advantage given to Trammell Crow "will undermine the competitive marketplace when people are looking to locate their businesses in Howard County or Anne Arundel."

Some area business people agree that the firm will realize a windfall in reduced development costs.

"It's such a large project. When it's competing directly against the private sector, that's when it becomes an issue," said Stuart Title, a broker and vice president of leasing with A.J. Properties, an Odenton developer. "There's not a level playing field."