Local building costs 6 times higher than Balto. Co., study says

June 24, 1992|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

Commercial developers can expect to pay up to six times more to build in Anne Arundel County than in neighboring Baltimore County, an investment company's study of fees shows.

MIE Investment Co., which owns and manages office and industrial projects in both counties, has found that developers pay fees of $43,300 per acre in Anne Arundel County, while they pay only $6,500 per acre in Baltimore County. Those figures apply to projects with an average of 10,000 square feet per acre.

But MIE's comparison might be misleading, a county official said yesterday.

County Executive Robert R. Neall has asked planning and zoning officials to review the accuracy of the figures and report back to him, said Michael Lofton, county economic development director.

"He wants to make sure Anne Arundel County is attractive to high quality commercial and industrial investors," Lofton said. "He understands quite well the commercial and industrial sector of the tax base that earns income for the county, in excess of the cost of services. To build a tax base with a healthy commercial and industrial sector, you're going to have to be competitive."

Lofton pointed out that the comparison fails to include each county's property taxes. Anne Arundel has a lower property tax rate, which, among other things, might offset the apparent imbalance, he said.

MIE reviewed Anne Arundel and Baltimore counties' fees after learning it would be charged $800,847 to build Quarterfield Center, a 185,000-square-foot office building planned for the northeast quadrant of Route 97 and Quarterfield Road.

"We just about fell off our chairs," said Gerard J. Wit, MIE's marketing director. "Nobody can develop with that kind of fee structure. The real estate business is already on its knees."

The most-costly fees included area charges for utilities, at $333,000, compared with $58,722 for a similar-sized project in Baltimore County, the comparison shows.

MIE also would have been charged a $166,000 impact fee to pay for road improvements. Baltimore County has not imposed impact fees, which help offset the cost of additional roads, schools and water and sewer service for new development.

Besides that, the developer was faced with a $123,057 fee to cover the cost of replacing trees. Baltimore County has yet to impose the state-mandated fee.

In 1987, the Anne Arundel County Council adopted a phased increase of county fees and has raised them several times

during the past five years.

Since learning of the charges, MIE has put the Quarterfield project on hold, Wit said.

MIE, which owns and manages the BWI Commerce Park on Dorsey Road, the I-97 Business Center in Millersville, and Lake Shore Plaza and Olde Mill Shopping Center in Pasadena, issued an October report showing how Baltimore County's commercial and industrial land users generate more in taxes than they cost the county in services.

While fees may be lower, Baltimore County doesn't "have enough [commercial and industrial] zoned available land, and job growth is slowing down," Wit said.

In Anne Arundel County, "there's a general feeling in the development community that development fees have gotten some what out of hand -- higher than they have to be," said Jason Jacobson, vice president of Annapolis-based Osprey Investment Co., which is developing two county industrial parks, Park 100 and Arundel Gateway.

"If we're going to have an economic development policy of bringing companies into certain parts of the county, like BWI, you can't do that without examining the cost of development," Jacobson said. "We can be spinning our wheels marketing if the cost of getting into the county is higher than in competing areas."

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