In Harford, just a case of friends in high places?

March 24, 2010|By Jay Hancock

It's possible that Harford County's decision to spend millions on the future Beechtree Estates neighborhood is not a big, sloppy subsidy for developer Clark Turner.

Shame county officials can't demonstrate that. When a county diverts future taxes to help a longtime friend of the county executive's, it needs to make a bulletproof case that the public benefits more than the businessman.

Last week, the County Council agreed to float $14 million in bonds and spend the proceeds on streets and sewers in and near Beechtree - the kind of public improvements usually paid for by developers. Professed worries about population growth and defense-base realignment, it seems, have nudged Harford's leaders into a cozy, questionable deal that could backfire at the polls.

Chad Shrodes, a Republican like County Executive David R. Craig, was the only one with the guts to oppose it.

He admires Turner, Shrodes said, but he said "as the economy turns around, this project would have been developed anyhow" - without tax money. Even though other Republicans, along with two Democrats, voted yes, he said, "I feel that my vote was the most conservative."

Hard to argue with that.

The Beechtree bond sale is Harford's first experience with "tax increment financing," in which governments help pay for private projects by dedicating future taxes.

Originally associated with commercial redevelopment in blighted areas, TIFs are increasingly used for just about anything politicians desire - a trend illustrated by Beechtree, now a golf course and soon to be houses.

There have been few if any wholly residential TIF deals in Maryland.

"I am not familiar with any residential TIFs other than this one," says John Kortecamp, executive vice president of the Home Builders Association of Maryland. "We think it's a potential precedent-setter."

Let's hope not. Turner and Craig have known each other since they attended Havre de Grace High School. When Craig gave Turner a good-citizen award a couple of years ago, he said: "It's more than from county executive to a builder, it's from a friend to a friend," according to The Dagger, a local-news Web site.

Beechtree needs public money, Turner and county officials argue, because the infrastructure upgrades needed to turn it into a neighborhood of 768 houses are much greater than normal. No bank would have financed the project without the tax contribution, they say.

"We put some pretty stringent requirements on this project," says Aaron Tomarchio, Craig's chief of staff. "That's over and above what's normally required."

He and Turner pointed to a required pumping station and oversized pipes that could eventually connect Aberdeen's Frito-Lay plant with Harford County's water. The tax money also will pay to upgrade four nearby intersections to handle the traffic from Beechtree's 2,000 residents.

All told, on- and off-site costs for roads, drains, grading and other public improvements needed for Beechtree come to about $30 million. Of that, the bond sale will contribute $10 million after expenses and prepaid interest. Turner pays the rest. Instead of going into Harford's general fund, property taxes from Beechtree residents will be earmarked to pay off the bonds.

But nobody - not Tomarchio, not Turner, not county planning director Pete Gutwald - could point me to other developments to demonstrate that the Beechtree infrastructure upgrades are unusual by comparison and need $10 million from the public. Turner wouldn't identify the lender that he said balked without the TIF.

If Turner hadn't gotten the bond issue, "then all of this would have been his burden upfront" - even costs for improving nearby intersections, said Shrodes, a former county planner.

The quality of the Beechtree project and Turner's track record were the main factors behind Craig's support, not their relationship, Tomarchio said.

Several things should be said in favor of Beechtree. It's in a smart-growth zone right next to Aberdeen Proving Ground, which is gaining thousands of defense jobs moved from New Jersey.

Turner will pay millions in impact fees. That'll help schools handle hundreds of new Beechtree students even though property taxes will go toward paying off the bonds. Local income taxes paid by Beechtree residents also will underwrite added costs for schools and police.

And unlike many TIF deals, there is no tax "abatement" associated with Beechtree. Turner and residents will pay taxes at the full rate.

Even so, we have future tax money flowing to the county executive's buddy so he can build a large housing development when there is already a huge inventory of unsold Harford County homes - 1,682, as of February.

"Everybody makes it look like, because we went to school together, this is all some concocted deal, and it's just not the case," Turner said.

Hmm. The main people making it look like that are Turner and his friends in county government.

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