Firm may ease county ills

Leopold asks real estate developer for help amid budget woes

December 19, 2007|By Ruma Kumar | Ruma Kumar,sun reporter

Facing possible cuts in every county department because of a sluggish housing market and decreased state education aid, Anne Arundel County Executive John R. Leopold told county legislators he's turning to a national real estate giant for help.

At a meeting held yesterday to offer delegates a comprehensive, and at times sobering, picture of the county's budget, Leopold said Trammell Crow Co. could help alleviate the county's fiscal strain.

The real estate development firm is negotiating with the county about helping to pay for new roads and other infrastructure around the base to accommodate growth around Fort Meade. The firm is exempt from paying impact fees and state and county property taxes because it is building a sprawling office park on federal land.

Leopold said the solution is to seek a "payment in lieu of taxes," which would shift some of the burden from taxpayers to a company that is developing at least 2 million square feet of office space on the base.

Leopold said he's "encouraged by recent conversations" with Trammell Crow.

Trammell Crow's office park could be nearly twice the size of the Arundel Mills mall in Hanover.

Mark Corneal, senior vice president in Trammell Crow's Washington office, said in an e-mail that the developer "is excited to play a part in the process" and is "fully prepared to reimburse the provider for any services used." But Corneal added, "Fort Meade, not the county, will provide the majority of services ... including fire and police protection, water, sewer, permit review, and building inspections."

The Army plans to lease land to Trammell Crow under a 50-year agreement. The firm would provide services, such as two new golf courses and other infrastructure.

In as little as four years, the development would house 10,000 defense workers from the nationwide base realignment (BRAC) and other growth.

Leopold said that private contractors will benefit from the road expansions and other infrastructure improvements and that they should make a payment to reflects the benefits derived from these improvements rather than letting taxpayers subsidize them.

But Corneal said "it would be premature to discuss any specifics" on the development's impact on area roads until traffic studies are completed next year.

The practice of making developers on federal property pay alternative fees has its critics. They worry it's improper for the federal government or developers on U.S. property to negotiate with city and county governments about alternative payments that seem tantamount to taxes.

"A tax by any other name is still a tax," said Anne Arundel Republican Steve Schuh, who assumed Leopold's House District 31 seat when Leopold left to become county executive.

Traditionally, the county administration has sent finance department officials to discuss budget scenarios with delegates as they prepare to begin the General Session. But with costs related to BRAC and growth looming, Leopold said he wanted to appeal to the county's representatives personally.

He and county budget director John Hammond painted an austere picture of budget losses the county is bracing for in the 2008 and 2009 fiscal years.

The county will lose nearly $10 million in state school aid because of retooling of the Thornton education formula, Hammond told delegates.

The county expects to lose another $10 million in depressed tax revenues from anemic housing sales. Healthy property tax rates will help the county increase its revenue by $45 million, but that's expected to be consumed by various pay raises negotiated for teachers and other county workers.

In response, Leopold's administration has asked all department heads to cut 5 percent from their budgets - a move that's tough for the schools and police and fire officials.

Faced with these realities, Leopold said he is launching "a full-court press, trying to secure funding from all levels - federal, state, local, private."

Leopold's talks with Trammell Crow are only part of the plan. He also said he would revive an effort to raise developers' impact fees "by a significant amount," though he wouldn't say by how much.

Developers, he said, have not done enough to pay for the burdens of growth. He said he could take the impact fee bill before the County Council by late January.

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