Prince George's increasingly using special tax districts

By Ovetta Wiggins
Washington Post Staff Writer
Thursday, November 12, 2009; B01

Struggling to find ways to compete in the region and stimulate major development, Prince George's County is increasingly creating special taxing districts, a strategy used sparingly in the past.

But critics worry that officials might be diluting the effectiveness of the tactic by using it for smaller projects, instead of restricting its application to mixed-use projects that bring large numbers of jobs to the county.

In a 5 to 3 vote Tuesday, the County Council approved legislation creating a special taxing district for Brandywine Crossing, a 480,000-square-foot shopping center off Route 301. Council members William A. Campos (D-Hyattsville), Eric Olson (D-College Park) and Ingrid Turner (D-Bowie) voted against the measure. Member Samuel H. Dean (D-Mitchellville) was absent.

"I think that when we set up special taxing districts, you need to have a very good case, and I don't think the case was made for it at this point," Olson said.

Campos agreed, saying he didn't oppose the development but questioned whether it is the type of project that should be given a tax break. He was also concerned about how quickly the resolution was introduced, debated and considered for passage.

In the past, the county has averaged one special taxing district a year. Since Executive Jack B. Johnson (D) took office in 2003, seven special taxing districts have been approved, said Michael Herman, Johnson's chief of staff.

But in the past two weeks, the council has introduced, approved or discussed five resolutions to form special taxing districts throughout Prince George's -- one more than the county has granted in the past five years.

The Brandywine Crossing bill, which Council Chairwoman Marilyn Bland (D-Clinton) introduced, was placed on the legislative fast track: She introduced it Nov. 3, sent it to committee and put it back on the council agenda for a final vote Tuesday.

"They are looking at $7 million" in bonds, Campos said. "I don't think we should have made that decision in that amount of time."

In most instances, the creation of a special taxing district includes the creation of a tax increment fund, also known as a TIF.

"I have no problem with TIFs and public-private partnerships, but we should use them ideally for transit-oriented developments," Campos said.

Mel Franklin, a community activist and candidate for Bland's seat, said the special taxing districts pushed by Bland promote sprawl over transit-oriented development.

"This is being used to subsidize a lower-end retail strategy. . . . Why reward that kind of behavior?" he said. "TIFs can be good incentives, but they have to be focused on creating jobs near our transit centers."

On Tuesday, the council also introduced legislation to create a special taxing district for Woodmore Towne Centre at Glenarden, a mixed-use development that will include the county's first gourmet grocer, two hotels and 1,100 residential units.

The legislation authorizes the county to issue bonds to finance infrastructure improvements. A separate bill specifies the amount of the bond package, and then a portion of the property taxes from the development is used to pay back the bonds.

Tax increment funds "are our primary incentive tool to work with the infrastructure needs of a project," said Kwasi Holman, president and chief executive of the Prince George's County Economic Development Corp.

Holman said Prince George's officials are trying to determine whether there are incentives besides tax increment funds that could help developers with infrastructure costs.

Herman, Johnson's chief of staff, said Prince George's has been cautious about approving the districts.

"We are well below our debt threshold," he said, noting the county's AAA bond rating.

The county is considering three special taxing districts near Metro stations. Developers near the stations in Largo, New Carrollton and Hyattsville have submitted bids to the General Services Administration to get the U.S. Department of Health and Human Services to relocate its offices, including the Health Resources and Services Administration, from Rockville's Parklawn Building.

Last month, Johnson asked the council to consider a bill for Largo, which some said gave developer Peter N.G. Schwartz an advantage in the bidding. But Johnson said he is also working with the other two developers, Carl Williams at New Carrollton and Herschel W. Blumberg at University Town Center in Hyattsville.

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