At a work session on Oct. 24, the county council discussed potential amendments to the TIF legislation that were due on Thursday, Nov. 3. The vote is still scheduled for Monday, Nov. 7. —Ed.
Anyone who’s ever taken in a concert at Merriweather Post Pavilion knows that parking for the shows can offer a tough choice: Either park in the 60-acre dirt lot that surrounds the venue in what’s known as the Crescent, then get caught in the bottleneck when you leave; or take your chances in the parking lot at The Mall in Columbia.
That second option hasn’t been as available during the past couple of years, due to the numerous “No Parking” signs that are scattered around the massive lot before a number of events — as well as the canvassing tow trucks.
Parking can be an issue for other Downtown events, too, such as Wine in the Woods. But with the gradual implementation of the Downtown Columbia Master Plan (DCMP), which is slated to eventually include attractions like a built-out Merriweather Park at Symphony Woods, the call for a $51 million, 2,500-spot parking garage on the Crescent has gotten louder.
But who’s to pay for the infrastructure that will help boost Columbia to its next level? That’s been a hot topic, with Howard County Government’s suggested option of tax increment funding (or a TIF) to generate the needed money.
While the Howard County Council will vote on the topic on Nov. 7, the debate over whether the local government or the Howard Hughes Corp. (HHC) will foot the bill, or partner in doing so, has continued.
How It Works
According to the Economic Development Article of the Annotated Code of Maryland, the Tax Increment Financing Act authorizes the creation of TIF districts as a means to finance infrastructure in connection with private development. The purpose of designing TIF districts is to provide another tool for local governments to finance public infrastructure benefiting commercial and certain residential projects and the general public, so as to generate economic development that will enhance county revenues beyond the debt service requirements.
With the vote looming, Ian Kennedy, executive director of the Downtown Columbia Culture & Arts Commission, is backing the TIF. “We’ve had a good conversation with productive deliberation,” he said. “The council has spent much time and energy in analyzing and understanding whether it’s the best solution for Downtown Columbia.
Noting that the potential TIF would only be the second in county history (the first is at the transit-oriented development at the Savage MARC station), Kennedy said, “Construction is ready to roll and the TIF is the lynchpin.
“From a redevelopment perspective, the key is that a TIF creates public parking in an area that has none. And if we’ve learned one thing about these projects, it’s the importance of development of a public parking area that can be accessed by anyone who wants to come downtown for any reason, may it be concerts at Merriweather, Wine in the Woods, the Festival of the Arts or Columbia Association events.”
Another supporter of the TIF is Tom Mayotte, founder of Kearsarge Strategies, a local communications firm. “It speaks to how we can develop Downtown Columbia into a more vibrant area, which we’ve been talking about for 10 years,” he said.
“I like that HHC is on hand, ready to infuse $2.2 billion [into the Downtown project], and I think it’s important that we, as a county, support them while they make this investment. Making it a public-private partnership means that all parties are vested in the project.
“That’s the good thing about the TIF,” said Mayotte. “It isn’t like a handout to HHC,” noting that it could generate $400 million over 35 years.
What would he say to the naysayers? “I would say that, if we want to build the Columbia that we are all pushing for, everybody needs to pick up their fair share. To do so, we have some choices we have to make,” said Mayotte. “For HHC, it’s the $2.2 billion. For the county, it’s the TIF.”
Mary Kay Sigaty, county councilmember from District 4, said that the potential for incorporating a TIF was part of the DCMP, and she believed that “we would be needing that option. What’s important to note is that that avenue was there.”
While the DCMP allows for up to $170 million in TIF financing, “We’re only asking for $90 million” of that amount, Sigaty said.
“With that in mind, we’re coming toward the end of the discussion. TIF bonds cannot fund private sector projects,” she said, “but what it does, for me, is allow the county to partner with HHC to accomplish a goal to further the [DCMP] plan.
“My reasons are that we’re providing public infrastructure for the locals, as well as others who might just be passing through. There could also be a potential through-road to connect to Hickory Ridge and to the [Howard County Public] Library, as well as public parking with a 2,500-spot garage with free parking, which is essential,” Sigaty said.
At present, she noted, the only public parking in downtown is at the Library. And, Sigaty added, “We are not handing [anything] over to HHC. They submit invoices when the work is finished and they have a goal they have to hit or they have to pay the overage.
“I’m comfortable with the analysis,” she said. “This is an educated guess, but it looks like it’ll work.”
However, Jen Terrasa, the county councilmember from District 3, said that while a TIF can be a legitimate tool, going that route in this case would mean a diversion of future money “that could go into the general fund, in lieu of money that could be invested by a developer.
“And there’s always the ‘but for’ test,” she said. “In this case, it’s, ‘Would we not be able to access the needed funding, but for the TIF?’”
Terrasa stressed that a TIF takes an increased increment on already established taxes. “There could eventually be 1,500 to 2,200 residential units in the Crescent, so whatever the increase in the property tax rate is, is what the increase in future revenue is,” she said.
When the council passed the DCMP in 2010, “we anticipated that we were going to get that increase in revenue just from development alone, and that would it go to the general fund; what happened, however,” she said, “is that HHC came to us and said they wanted to create a vibrant downtown, but they needed much more office [up to 5.5 million square feet], much more housing [up to 5,500 units], more artistic areas, etc. It was several hundred million more in new value added to their land.
“They said that the only way to make that work was to get $170 million in TIF money, which was not the agreement in the first place,” she said. “We created an amendment to the plan, to make sure that it was not dependent on a TIF. That was not a guarantee. And it passed 5-0.”
In the End
Terrasa added that HHC has presented its pro forma agreement to the county under a non-disclosure agreement, “which it says is normal business procedure. I want to make it public to ask people in the development business if it all makes sense, since that isn’t my expertise,” she said. “So I wonder if it’s really necessary and if the money is available. I don’t know if we can even cover the TIF payment.”
Rev. Mary Ka Kanahan, of the St. John United Church, in Wilde Lake, is chair of the affordable housing team for PATH (People Acting Together in Howard), which is affiliated with a national organization called the Industrial Areas Foundation. In Howard County, it’s composed of 14 congregations, labor organizations and nonprofits.
Kanahan said that “Historically, TIFs have been created to spur development in areas that were blighted and otherwise not be attractive for redevelopment. We think the development of downtown Columbia does not fit that historic description and need.
“However,” she said, “HHC is working to get anything that it can from Howard County. We think the money that would go to pay the debt service from a TIF will occur at the expense of services that we rely on for our citizens, such as schools, police and fire.”
Kanahan also pointed out that PATH requested an independent study of the issue by Bethesda-based TischlerBise in July, which was received by Council Chair Calvin Ball in early October (it is available at http://cc.howardcountymd.gov/Portals/0/Documents/CouncilMain/Press%20Releases/HowardCo_Final%20Draft.pdf; the Howard County Department of Finance also presented a financial analysis that was prepared by MuniCap). “That report raised some questions that had not been answered about the premise,” she said. “While some of its methodology was sound, it failed to address the ‘but for’ question.
“We think, if a garage and secondary roads are built in the Crescent to serve Downtown and any new HHC housing, the county should partner in the deal and share the profits,” she said, “and HHC should invest in to the county’s needs, like affordable housing, services and education.”
But, all told, Terrasa thinks the garage project will be successful. “People will invest in Columbia, either way,” she said.
Kennedy concurred. “This [issue] has been put through the ringer of analysis in the county government and now in the public theater,” he said, “and I think the end result will be a great deal for Columbia and Howard County.”