Panel called way to risk-free control

Town officials plan nonprofit authority to assume liability

February 07, 1999|By Mary Gail Hare | Mary Gail Hare,SUN STAFF

If Sykesville turns vacant old hospital buildings into an employment campus, it will be shielded from the costs by a development authority.

The town-appointed panel would insulate Sykesville taxpayers from financial liability and act as developer for the 138-acre Warfield Complex, once part of Springfield Hospital Center.

"The authority would hold the property and make disposition of it," said Dennis J. Hoover, town attorney. "The authority can generate revenues and use them to make further improvements. It acts as an agent to dispose of the property."

The Town Council voted to annex the property along Route 32 in September, but opponents collected nearly 500 signatures to force a referendum. Both sides are campaigning until the Feb. 17 vote.

Officials say annexation is the only way to control development of the property. Opponents object to the costs of what could be a $20 million project.

"The town has never been involved in an annexation that cost us money," said Charlie Mullins, a former councilman opposed to the annexation. "Government should not be in the investment business. We cannot afford to subsidize development."

But, as the investor, the nonprofit development authority would take the risks, officials said. The panel of local, county and state officials and residents appointed by the town would raise money from leases and sales, and pay costs of the project independently of the town -- assuming all financial responsibility.

"The town could transfer the land to the authority, a free-standing body, separate from the entity that creates it," said Frederick W. Glassberg, a planning consultant working with the town. "Its function would be to borrow money and collect revenue and to take the risks of the venture away from the town."

The Maryland Stadium Authority, which built stadiums at Camden Yards for the Orioles and Ravens, is the best-known area example of the role such a panel plays, Glassberg said.

The authority has fewer limitations than government "and it can deal more quickly with users," he said. "It can borrow money and sell bonds to fund itself."

The town has the legal right to create the authority, said Hoover. Such panels are fairly common, said David Falk, a senior fellow in the School of Public Affairs at the University of Maryland.

"They can work," Falk said. "They are done all the time. Universities use them to finance sports stadiums, based on assumed revenue streams. Industry uses them based on leases."

Donald R. Jansiewicz, professor of political science at Carroll Community College, calls the authority "an overlay of government that protects it from liability and addresses the issues for which it was created."

"It is a good, sound decision that shields a government from missteps that can be made or costs that accelerate," Jansiewicz said.

Glassberg has detailed plans for restoring 200,000 square feet of existing space at Warfield and building 205,000 square feet, including an 80-room hotel. The county would reap $450,000 in property taxes annually, with the state getting $1.4 million and the town $135,000 -- nearly 10 percent of its annual budget. The town and state would share profits.

"We have had general discussions with users for nearly all the space," Glassberg said.

Sykesville has worked for three years to annex 15 aging buildings no longer of use to the hospital. The town developed a plan for renovating the property into a college campus, offices and senior housing.

The state approved the town's proposal in December 1997 and offered to deed Warfield to Sykesville. Before formally annexing the property, the town organized a weeklong planning session and held public hearings.

"As we got further into the project, our top priority became insulating the town from liability," said Matthew H. Candland, town manager. "We decided on the authority. We can structure it and restrict it, however we decide."

Mayor Jonathan S. Herman likens the authority to the arrangement a business owner creates to shield his personal property from liability.

"All that the authority means is that we separate ourselves from liability," said Herman. "It is protection for the town, much the same as a business owner shields his family from liability for his company."

Pub Date: 2/07/99

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