Developers question White Flint funding proposal
Tax plan could cripple community's future
Funding concerns could delay the implementation of a plan from County Executive Isiah Leggett (D) to pay for an estimated billion dollars in infrastructure upgrades around the White Flint Metro station.
Last week, Leggett proposed a special taxing district that would add 10 cents per $100 of assessed value for the nearly 430-acre section around the White Flint Metro station. The additional revenue would help pay for the infrastructure costs outlined in the area's sector plan. The current property tax rate in the White Flint Development Tax District is $1.027 per $100 of assessed property value. The tax is set to expire when project costs have been paid, which could take decades.
Projects include an overhaul of major roads, including Rockville Pike, a second entrance to the Metro station, and construction of an elementary school, fire station and civic green.
Developers and County Council members criticized Leggett's plan this week. Council President Nancy Floreen said the proposal will have to evolve before it can be approved.
"It will provide us with a good first step; now we'll listen to the issues and find a way to make it work," she said. Floreen declined to offer specific changes, but said details would arise during public hearings.
The special tax which will be exempted for many existing properties is expected to generate $208 million to help pay for White Flint's renovation. Over the next 40 years, new development and tax revenue within the special district are estimated to bring as much as $6.9 billion to Montgomery County.
The executive's proposal also includes a measure to spend $378.078 million in county money on capital improvements.
Council members and developers have pointed to a $90 million gap in funding in the executive's proposal for early-stage projects, such as improvements to Old Georgetown Road, that are scheduled to begin before the bulk of new taxes are collected. They've also identified a $200 million shortfall for second-stage projects where major road upgrades could cost more than the county can collect.
In response, the White Flint Partnership, a coalition of seven development groups that account for nearly all the commercial property around the Metro station, claims if the executive's proposal is approved, it would slow or possibly cripple future growth due to the heavy financial burden it could place on developers.
Evan Goldman, director of development for Federal Realty Investment Trust, one of the partnership's members, said not only is the executive asking commercial owners to pay the additional property tax, it also asks for impact and other development fees while considering postponing some infrastructure projects.
"I think [the executive's proposal] is a negotiating tactic; that sets it in a place for a response," he said.
According to the county's sector plan process, if no plan is agreed upon by January, the planning board will have to place a moratorium on development in White Flint.
A public hearing is scheduled for Oct. 26. Three joint-committee work sessions have also been tentatively scheduled.
Councilman Michael J. Knapp (D-Dist. 2) of Germantown said he is concerned about starting another special taxing district similar to the one designed for Clarksburg in 2003; which he recently proposed to eliminate after failing to properly implement it.
The development of Clarksburg, originally set to be funded from a special tax district, saw numerous problems related to building specifications and a lack of transparency in the assessment of taxes. The problems eventually brought the county's planning oversight system and use of special tax districts into question.
Before last week's council hearing, Floreen said she would prefer to have the sitting council act on Leggett's proposal before December so any new candidates elected this year will not have to be introduced to the plan.
Councilman Marc Elrich (D-At large) of Takoma Park said at the hearing that White Flint is one the most important projects the council faces and suggested they take their time with amending the plan.
"I'm less concerned with doing it in six weeks than doing it right," he said.