Panel to evaluate estimates of Key annexation

CA may reap windfall by adding property containing 1,200 homes

June 22, 2000|By Laura Vozzella | Laura Vozzella,SUN STAFF

The Columbia Association could reap a $22.8 million windfall if it annexes a new Rouse Co. development in North Laurel. Then again, it could come out just $2.7 million ahead. Or maybe somewhere in between.

At a meeting tonight, the Columbia Council will consider three estimates of how the proposed annexation of the 1,200-residence Key property would affect the association's bottom line. The meeting is scheduled to follow a 6 p.m. Columbia Association board of directors meeting at Columbia Association headquarters.

Working with data provided by the Rouse Co., association staff members came up with best-case, worst-case and so-called "realistic" scenarios for extending the community's boundaries. Each shows Columbia coming out ahead in the deal but by dramatically different margins.

The Howard Research and Development Corp., an affiliate of the Rouse Co., has asked the association to make the development a fourth neighborhood in Kings Contrivance and provide it with recreational amenities, including three public tennis courts, an outdoor pool, five parks, nine playgrounds and more than 12,000 feet of pathways.

In exchange, Columbia would collect assessment revenue from about 2 million square feet of commercial space and 1,200 apartments, townhouses and single-family homes. Columbia also would gain about 3,500 residents, some of whom presumably would contribute to the bottom line by buying memberships at association fitness centers.

How the costs and benefits would pan out depends on many factors, including the pace of development, the value of the new housing and the cost of providing the amenities.

Under the most optimistic scenario, the Key property would contribute $34.8 million in commercial and residential assessment revenue, plus $6.7 million in sport and fitness revenue, during the next 20 years. Those gains would be partly offset by $18.7 million in operating and other expenses, but the association would come out ahead by $22.8 million.

The picture was considerably less rosy in the worst-case scenario, though estimates show the association profiting by $2.7 million. The most pessimistic estimates show the Key property bringing in $27.7 million in assessment revenue and $2.6 million in sport and fitness revenue. Expenses totaled $27.6 million.

Under the scenario deemed most realistic, assessment revenue would be $28.1 million, while sport and fitness revenue would be $2.6 million. Total expenses would come to $21.2 million, resulting in a net gain of $9.5 million for the association.

Council Chairman Lanny Morrison said the estimates have provided council members with better information than they had on the potential benefits and drawbacks. But Morrison said he would not make up his mind on the proposal until he hears what residents think.

The 665-acre parcel straddles Interstate 95 and is bounded by Route 216 and Gorman Road. It is not contiguous with Columbia. If Columbia declines to annex it, Rouse says, the company will establish a separate property-owners association and pay for recreational amenities.

Rouse officials have touted annexation as mutually beneficial, providing nearly built-out Columbia with a new revenue stream while allowing Rouse to tap into the Columbia name, services and facilities. But the citizens watchdog group Alliance for a Better Columbia has been skeptical of rosy financial estimates and says Columbia should address the needs of existing neighborhoods instead of adding new ones.

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