Auditor will analyze land deal with Rouse

January 27, 1995|By Adam Sachs | Adam Sachs,Sun Staff Writer

The Columbia Council last night agreed to hire an independent auditor to analyze the costs and benefits of a proposed $1.4 million recreational vehicle storage park -- a land deal involving the Rouse Co. that has raised concern over demand for the park, its price tag and risks from adjacent hazardous waste dumps.

Councilman Michael Rethman said the audit -- for which the council allocated a maximum of $5,000 -- is a good idea because the arrangement negotiated with Rouse is "on the surface, a confusing deal." He noted that an independent analysis of the Columbia Association's (CA) expense and revenue estimates could help bolster public support for the project.

"We're seeing the democratic process at work," said Mr. Rethman, the Hickory Ridge village representative. "We're going spend a bunch of tax dollars to hopefully show that the deal works. If it doesn't, we can congratulate ourselves and walk away."

The council, which is CA's board of directors, has proposed buying about 5 acres in the former General Electric manufacturing park off Snowden River Parkway in East Columbia from Rouse for $1 million. The association would spend $400,000 to develop the parking area, a project intended to help residents comply with property guidelines that restrict parking of recreational vehicles on residential lots.

Columbia village covenant advisers say violations of that guideline are a major problem.

In exchange, Rouse would place two properties now excluded from CA's annual levy -- the 55-acre Snowden Square retail center and a 54-acre parcel planned for about 650 housing units -- under the charge. Within several years, those properties are expected to produce $350,000 annually for CA in assessment revenue.

Some council members say the deal is a financial bonanza for the association, generating significantly more revenue than it would cost to run the recreational vehicle park and provide Snowden Square and the future residential development with services.

"With the revenue stream, it's a moneymaker, pure and simple," said council Vice Chairman David W. Berson, adding that the deal would be profitable for CA even if the nonprofit organization bought the land and let it sit idle.

CA's finance director, Robert Krawczak, said it would be nearly impossible to find a cheaper deal anywhere, considering the additional revenue CA will receive even if the facility merely breaks even.

To improve the deal, "We would need to find someone to give us the land plus money," he said. "In a sense, the land is free.

But several residents questioned the plan last night, asking whether sufficient demand for the RV parking has been demonstrated, whether alternative, less expensive sites were adequately considered and why the association plans to buy twice the amount of land it needs.

Myles Larkin asked whether CA is "taking a problem property off" Rouse's hands. He also questioned why Rouse wouldn't place the Columbia-area properties under the CA levy without making it conditional on a land purchase, saying it seemed that CA was being "held hostage" by potential assessment revenue.

Controversy has dogged the project since it was announced last month as part of CA's proposed $6 million 1995-1996 capital budget, after several months of private negotiations with Rouse. Among the issues raised:

* At a price of about $200,000 an acre, Rouse is overcharging CA for the land, critics say. The council hasn't ordered an appraisal, saying other aspects of the deal might outweigh the need for one.

The state tax appraisal of the 168-acre parcel that contains the proposed 5-acre recreational vehicle site shows that the entire property is valued at about $28,000 an acre.

The whole area contains "encumbrances" -- such as soil and water contamination sites from manufacturing processes, utility easements and an industrial water treatment plant -- which lower its value from the more typical $130,000 per acre for industrial land in Columbia, said Howard Levenson, supervisor of the Howard County assessments office.

A Rouse Co. senior vice president, Alton J. Scavo, contends that the state appraisal falls far short of reflecting the market value of the 5-acre site. The appraisal factors in undevelopable land, and doesn't consider improvements Rouse would provide, such as roads, water and sewer. He says Rouse-owned raw industrial land in Columbia carries a $200,000 price tag.

* The risk that contamination from hazardous waste dumps could spread, affecting neighboring property. CA officials say the deal is contingent upon an environmental assessment.

* Demand for RV parking may be lower than anticipated. Initial estimates indicate that 140 vehicle owners would use the lot, with projections indicating demand would double to 280 in about five years. Critics say all of Columbia residents shouldn't be forced to subsidize a facility with potentially well-below-market fees for a small number of users.

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