Annapolis council to vote on annexation

Aldermen split on adding waterfront community

March 11, 2001|By Amanda J. Crawford | By Amanda J. Crawford,SUN STAFF

For 16 years, it has been debated, negotiated, extended and reconsidered. Tomorrow, Annapolis' annexation of an upscale waterfront community just beyond its border is scheduled to be taken up for a vote by the city council.

"We want it done," said Susan Nahmias, president of the Chesapeake Harbour Community Association. "If it's not going to happen, we will regroup and move on."

Council members are split over the annexation of Villages of Chesapeake Harbour, a 452-unit apartment and townhouse condominium development that borders a private marina on the Chesapeake Bay.

At issue is the 10-year waiver of city taxes proposed for the residents of the community as an incentive for them to become part of the state capital.

Though any new homeowners would not receive that benefit and would have to begin paying city taxes right away, some council members have questioned the fairness to other city residents of the proposal negotiated by a previous administration and the legality of taxing some community residents and not others.

Alderman Sheila M. Tolliver referred to the agreement as "a Christmas tree with all kinds of fiscal ornaments on it" at a work session last week.

Alderman Herbert H. McMillan raised the concern that if the agreement goes through, a mayor or council member could be elected from the community and vote on tax issues that he or she is not subject to.

Supporters of the agreement, including Mayor Dean L. Johnson, point to the long-term tax benefit of annexing the 50.5 acres, valued at about $108 million.

During the first decade after annexation - while some homeowners would pay no city taxes - the city could expect to collect $4.8 million in property taxes, according to the fiscal note on the annexation proposal prepared by the city's finance office. Once all the property was on the tax rolls in the 11th year, the city would collect more than $1 million in property taxes annually.

"It is an immediate and long-term benefit for the city," said Sara H. Arthur, the community's attorney.

The community maintains its roads and provides its trash collection, she said, so "we are a cash cow to whoever we go to."

Alderman Ellen Moyer, who said she might prefer a different deal but wants to annex the community, called the decision a "no-brainer."

"It's pretty clear that it serves the public purpose and enhances our ability to provide services to the 35,000 citizens of the city," she said.

Opponents say it is those other citizens they are concerned about.

"It is true that there is this pot of gold at the end of 10 years," Tolliver said. But this is about "fairness and equity for the people who are paying taxes in Annapolis while people in Chesapeake Harbour are not."

Discussions about annexing the Annapolis Neck development began when the project's developer, Jerome J. Parks, wanted city water. The city's policy is to require annexation in exchange for city water, but a clause in Parks' purchase agreement prohibited annexation at that time.

Instead, Parks entered into a water agreement with the city in which he paid the city $50,000 and put $250,000 into an escrow account. Residents would then pay a double rate for city water and contribute $100 per unit per year to the escrow account. If the property were not annexed within 10 years, the money in the escrow account - now about $1.7 million - would be turned over to the city. If annexation occurred, all but $200,000 would go to the community.

When the 1994 deadline approached, Chesapeake Harbour residents - reluctant to pay the higher city tax rate even if it meant a reduction in their water rate - turned down the chance to join the city.

The city, eager to get the development on the tax rolls, went back to the negotiating table. The administration proposed a five-year city tax waiver, which the community rejected, then the 10-year offer, Arthur said.

For the community, the 10-year agreement made sense. According to the city fiscal note, the 10-year positive impact on the community would be $2.6 million, including $1.5 million of the $1.7 million in escrow.

Since then, the annexation petition has been amended twice, most recently to add the newest section of the community and the marina.

Since Johnson - who opposed annexation before those recent additions - took office, the deal has stalled as the council has requested an opinion from the Maryland attorney general's office on whether the tax plan would be legal under state law. (The attorney general said taxing some residents in the community - ones who move in after the annexation - and not others could run afoul of state law, though a city-hired attorney disagreed.)

It appears that there are not enough votes to win annexation under the current proposal. If three aldermen vote against it, it will fail, and four - McMillan, Tolliver, Louise Hammond and Samuel Gilmer - have expressed opposition publicly.

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