Brandywine Crossing developer could get big bucks from next construction phase
Thursday, October 21, 2010
The developer behind the Brandywine Crossing shopping center might get a multimillion dollar boost from Prince George's County for its next phase of construction, which includes a movie theater scheduled to open in 2012.
The Prince George's County Council is considering whether to approve a $4.5 million tax increment financing plan that would reimburse the developer for public infrastructure improvements such as building new roads.
County officials have supported TIF in the past, arguing that new development creates jobs and expands the tax base. But when the council proposed the Brandywine Crossing plan last fall, some residents protested, saying tax revenue was too valuable to give back to developers.
A public hearing on County Bill 78 is scheduled for Tuesday. If approved, Bethesda-based developer Faison could recoup as much as $4.5 million that the company will invest in roads, lighting and other infrastructure during the planned second phase of construction. The second phase includes the movie theater and other unidentified restaurants and retail stores.
When construction began in 2007, the movie theater was scheduled to open in 2010, but the recession slowed production, said John Erzen, spokesman for County Executive Jack B. Johnson (D). Johnson initially proposed the TIF.
The first phase of construction, which includes an existing Costco, Target, Safeway, Marshalls and Jo-Ann Fabric and Craft stores, was completed late last year, said Howard Biel, Faison senior managing director.
Faison recently sold a large section of the properties completed during the first phase to Excel Trust, a San Diego-based company, for about $45 million, although Biel said Faison will continue to manage and lease the properties.
According to the proposed TIF deal, Faison would receive small increments of money from taxes the developer pays the county during the next two or three decades, Biel said. The expectation is that if the movie theater and other stores are successful, the property's value -- and the amount of taxes Faison owes -- will increase.
However, the money is not guaranteed.
Financing is dependent on the county receiving more tax revenue once the second phase of Brandywine Crossing is completed, according to County Bill 78. This means Faison would not be given county money if the second phase is not built or the stores fail to open.
In the past decade, the council has approved a handful of similar tax-based incentive arrangements to spur development, most notably for National Harbor in Oxon Hill. This year, the council is considering TIFs for Woodmore Towne Center in Glenarden and Kingdom Square in Landover. Public hearings for those bills are also scheduled for Tuesday.
Johnson favors public financing for Brandywine Crossing because of the jobs created during the first phase and the money the project has brought the county through taxes, Erzen said. The first phase expanded the real estate tax base for that property from $4 million to $48 million. Annual property taxes paid to the county rose from $38,000 to $426,000, according to Erzen.