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City to Offer Tax Credit to Attract Quality Development

For the past few years, the City has been working on establishing a Revitalization Tax Credit program that will provide an incentive for developers to bring quality redevelopment to the City. This tax credit would complement the County’s Revitalization Tax Credit program, which provides a County property tax credit to developments which come into certain blighted areas. Currently, the downtown area and

Route 1 corridor are eligible for a County tax credit, but the Hollywood Commercial District is not, so the City’s tax credit program could help revitalize the Hollywood area. When the Council first attempted to create this Tax Credit, we found that State law did not allow the City to establish a revitalization tax credit, so we successfully lobbied the Maryland General Assembly to pass a law allowing College Park to create this tax credit. Over the past year, the Council has been working with legal counsel to develop an Ordinance allowing this tax credit.

Generally, the tax credit will be available to new developments within certain revitalization districts – “District 1” is the area encompassed by the Route 1 Development District Overlay Zone (most of the Route 1 corridor) and the College Park-Riverdale Transit District Overlay Zone (including M Square and the commercial areas near the College Park Metro station), while “District 2” includes the Hollywood Commercial District, Berwyn Commercial District, and the Branchville and Berwyn Industrial areas and Greenbelt/University Commercial Corridor. In order to be eligible, the developments must meet a certain number of criteria – the proposal must be a new development and may not have a previously approved Detailed Site Plan, and the applicant must be in good standing with the City.

The proposal must meet four of the following criteria if it is located in Revitalization District 1 and two of the following criteria if it is located in Revitalization District 2:

1) be located within 1/2-mile of an existing or under construction rail transit station

2) involve the assemblage of lots or parcels owned by different parties

3) involve the buyout of leases to facilitate redevelopment

4) will complete, or commit funds for, substantial infrastructure improvements

5) meet the minimum guidelines for a LEED Silver certification

6) be located within one of the walkable development nodes designated in the Approved US 1 Corridor Sector Plan

7) involve the destruction of at least 1 non-historic structure that has been vacant for at least 1 year

8)be a Brownfield development that requires substantial environmental cleanup prior to development

9) have secured at least one locally-owned, non-franchise business as a tenant; and

10) provide space for a business incubator, community center, art gallery, or similar public-benefit use.

The tax credit will be a five-year credit, in the amount of 75% of the City property tax increment attributable to taxable improvements by the Developer on the property in the first year, diminishing by 15% in each of the four subsequent years. In order to receive the Credit, the developer must submit an application to the City that must be approved by a majority of Council and must indicate how it will meet the requirements listed above.

Council may also waive the requirement that the developer not have an approved Detailed Site Plan in place for projects that have submitted site plans since January 1, 2009, when the Council first began to consider the tax credit.

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