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Council to Vote on Revitalization Tax Credit Program

Tax credit will help revitalization of City's business and attract new developments

In tonight’s meeting, the Council will hold a public hearing at 7:15 pm and then vote on a proposed ordinance to establish a revitalization tax credit. If this passes, it would allow a development wishing to come to the City that does not yet filed have an approved detailed site plan to receive a tax credit if the development meets certain criteria.

Currently, only the County offers tax credits to new developments, and only if the development is located in a low-income area – as a result, new developments in much of North College Park are not eligible. The draft Ordinance establishes two revitalization tax credit districts – one of which includes most of the Route 1 corridor and the areas around the College Park Metro, and the second which includes the less developed commercial areas in the City (the Hollywood Commercial District, the Branchville Industrial District and the Berwyn Commercial and Industrial and Greenbelt Road commercial areas).

To be eligible, a developer must be in good standing with the City and be proposing to redevelop an existing commercial or industrial area. Proposed developments in the first District must meet at least 4 of the following criteria, and proposed developments in the second District must meet at least 2 of the following:

1. Be located within 1/2-mile of an existing or under construction Metro or transit station;
2. involve the assemblage of lots or parcels owned by different parties;
3. involve the buyout of leases to facilitate redevelopment;
4. complete, or commit funds for, substantial infrastructure improvements;
5. meet at least the green building guidelines required for LEED silver certification;
6. be located in a walkable development node as designated in the US 1 Corridor Sector Plan;
7. involve the demolition of an existing non-historic structure that has been vacant for at least one year
8. be a brownfield site and require environmental cleanup prior to development;
9. secure at least one non-franchise, locally-owned business as evidenced by an executed lease; or
10. provide space for a business incubator, community center, art gallery, or similar public-use space.

The tax credits will be for five years, with a credit of 75% of the property tax on the increased assessment of the property in the first year, 60% in the second, 45% in the third, 30% in the fourth, and 15% in the fifth.

In order to obtain a tax credit, the developer must file an application with the City indicating which of the above criteria it meets, and the Council must approve the tax credit. Council may waive the requirement that the application for the tax credit be filed prior to approval of the detailed site plan if the DSP approval happened after January 1, 2009, or if the DSP was approved earlier and the tax credit is considered necessary to encourage the project to go to construction.

Please let me know if you have any questions, comments or concerns about this proposed tax credit program.

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