County Council approves White Flint taxing district
New district to model growth for county
After two months of meetings and a major rewrite, the Montgomery County Council approved a financing plan for White Flint; paving the way for what some say will be the county's economic engine of the future.
The council unanimously approved created a special taxing districting in North Bethesda, as well as spending $385,000 out of the county's Capital Improvements Program this year, to start planning road projects Tuesday. A list of infrastructure improvements and a plan to pay for them was approved 8-1, with Philip M. Andrews (D-Dist. 3) of Gaithersburg opposed.
"This is a plan that sets a model, which I think will ultimately be used for these types of things," said Councilman Mike Knapp (D-Dist. 2) of Germantown at the Nov. 23 council session.
The plan couples an additional property tax expected not to exceed 10 percent of assessed value with the issuance of bonds to offset the burden of $826.8 million in infrastructure projects, said Senior Legislative Attorney Michael Faden.
The new tax will be a tax on property roughly a half-mile around the White Flint Metro station and is separate from the existing taxes. There are four apartment buildings exempted from this tax in an attempt to avoid over-taxing existing residents in White Flint.
The new tax will be established July 1 and is expected to pay for $208 million in projects during the life of the plan. It will stop being levied once the projects outlined in the plan are completed and paid for, Faden said.
The road and public facility projects are expected to support the massive commercial and residential growth called for in the White Flint Master Plan, and are divided by financiers; either the county, developers in the area directly or district taxpayers.
Developers those intending to build or renovate their existing properties are slated to spend $251.95 million while the county will pay $375.92 million for these projects during the next 40 years, the length of the master plan.
Before nearly any of these can begin, more than $20 million in renovations to Rockville Pike must be undertaken, requiring "work-arounds" roads that divert traffic from construction area to be built as soon as next year, said Assistant Chief Administrative Officer Diane Schwartz Jones.
This is the second financing plan submitted by County Executive Isiah Leggett (D) for approval.
The first, proposed in October, was rejected as being too burdensome on developers as it required them to pay impact fees for new construction. The fees, which are supposed to help pay for infrastructure projects required to handle added traffic or population increases associated with new construction, are set at zero in the plan approved Tuesday.
Under the plan, the county will issue bonds for projects that need to be completed in the next few years, before the new taxes can be collected. Montgomery County will pay for the first 10 years of interest payments on the bonds, but will levy them against property after that, Faden said.
The interest payments were a point of contention among the council, with some saying that developers should be forced to pay all the interest accrued against them.
"In my view, they should be all in or all out," said Councilman Marc Elrich (D-At large) of Takoma Park.
Developers are expected to pay $51.7 million in the first stage of the plan, including infrastructure projects such as road construction. All together developers represent 29.8 percent of total funding.
The White Flint area is bounded by Rockville Pike and Montrose and Randolph roads in North Bethesda. Under the master plan, which was approved by the County Council in March and is a blueprint for the area for the next 40 years, 9,800 new residences and 5.49 million square feet of commercial space would be added to an area populated by 18,720 people and with 5.69 million square feet of commercial space. Council members say new growth could bring as much as $6.8 billion to Montgomery County.