Waiver sought for Revitalization Tax Credit Ordinance: The Whoops Ordinance

Don’t you wish the government (federal, state, county or city), would say, “Whoops, we made a mistake.  That tax amount you owe, never mind…we’ll just let you keep it.” This is essentially what is happening with the new undergraduate housing development, by the Gilbane Development Company.

Except this time, City staff members, contracted attorney, as well as your Mayor and Councilmembers, all missed the fact that this project, now known as Tempo, at 8430 Baltimore Ave., is not eligible for a revitalization tax credit per the City’s ordinance Chapter 175 “Taxation”, Article IV, “Revitalization Tax Credit”, Section §175-13.

 I could possibly see this getting by one, or two, or may be even three staff members, but not the City’s contracted attorney and City Manager, nor all eight Councilmembers and the Mayor.   How did that happen, especially after our last huge fiasco in 2017 when we were dubbed the “Dumbest Town in America”?

This Tuesday, March 9, at 7:30 pm,  there will be a Public Hearing for all to voice their opinions on the matter.  No doubt getting on Zoom again is the last thing you want to do after working all day, or while getting kids ready for bed, but saving taxpayers up to $571,020 in taxes will be worth the 30 minutes it takes.

HISTORY

In 2010, it was determined by the University and the City that College Park should become a Top 10 university town.  It was the vision of a handful of individuals that to do so the City must change the city’s character to attract developers, which would in turn attract restaurants and retail, and perhaps alumni dollars.

Chapter 175 “Taxation”, Article IV, “Revitalization Tax Credit”, Section §175-13 became an integral part of this plan.  Such a revitalization tax credit, used by hundreds of municipalities across America, would stimulate this growth.  In 2015, the construction of undergraduate housing was becoming increasingly popular, so much so,  that the City Council determined it best to terminate such tax credits to UG housing projects. 

Then, in January 2020, in steps the Gilbane Development Company.  The company’s lawyer argues that other projects had received this credit so they should too.  The City staff agree that the project is eligible, and then a whirlpool of mistaken perceptions, lies and perhaps even downright deception ensues pulling the City closer and closer to being sucked down the drain.

Any company would have reviewed, not just its plans, but the project’s budget prior to investing monies in architects and a detailed site plan, and approaching a bank or investors.  In other words, the Gilbane Company and its attorney, knew beforehand, they were asking for a tax credit for which they were not entitled.

And in the end, the City Council with the support of the Mayor, staff and attorney, voted unanimously to approve the credit on January 14, 2020. Such a vote was a legislative error which compounded the original staff error.  

At this Tuesday night’s meeting, the City Council will vote to introduce Ordinance 21-O-03 which would a waiver to the original ordinance, to correct the Council’s prior legislative error, thereby providing the Gilbane company with as much as a $571,020 tax credit over five years.

CONSEQUENCES:

Let me list some of the negative consequences of this blunder:

1.  It can set a precedent for future development projects, of any type, as well as projects already constructed to request a revitalization tax credit.

2.  City staff will continue to provide erroneous information unchecked.

3.  The Mayor and Councilmembers, perhaps following the staff’s lead, will not perform their due diligence thereby voting without a full understanding of the impacts of their vote.

4.  Use of the same attorney for multiple developments could lead to coordination of positions, such as students’ cost per bed.

On the positive side:

1.  This waiver allows Mayor and Council to provide a partial revitalization tax credit.

2.  This year’s budget could reflect funds for an independent zoning consultant to advise the City on current and upcoming projects.

3.  Mayor and Council could, upon their insistence, be provided with complete details, including financial reviews for developments, when considering any type of vote.

4.  Residents would also be provided the facts and could make their voices heard on issues.

You can make up your own mind.  Unlike many elected officials, I trust you to review the issues and make your own determination. 

To view the discussions regarding the Gilbane Construction Company’s request for an exemption to the County’s school facilities surcharge as well as the request for the City’s revitalization tax credit at the City Council worksession, January 7, 2020, click on the following link, if it is operational.  At this writing, it was not.

WHAT YOU CAN DO

“Attend” the City Council meeting. Click on the link below for this week’s Council meeting agenda, as well as to join the meeting, complete with instructions.

https://www.collegeparkmd.gov/AgendaCenter/ViewFile/Agenda/_03092021-1116

If you are unavailable to attend, write to the Mayor and Council at:  cpmc@collegeparkmd.gov.  Your email will be distributed to them.

Or write to your Councilmembers individually.  Click here to be taken to their email addresses.

https://www.collegeparkmd.gov/27/Mayor-Council

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