A few years ago, the Council considered the possibility of enacting a revitalization tax credit program. Such a program would give developers who revitalize certain commercial or residential property in an established revitalization district in the City the opportunity to apply for a credit on their City property taxes.
The City could provide such a credit if the development met certain criteria – for example, focused on green building, focused on renting to local or small business, provided certain types of neighborhood-serving retail, fixed up old and abandoned properties, etc. Until last year, State law prohibited municipalities in Prince George’s County from enacting tax credits like this.
The City lobbied to pass a law permitting municipalities in Prince George’s County to do this. This especially impacts the Hollywood Commercial District, which was the only commercial district in the City to not qualify for the County’s revitalization tax credit program.
The staff is now proposing a revitalization tax credit program for the City, which would make commercial developments in any of the City’s commercial districts eligible for 5-year tax credit program, where the credit would start at 75% and be phased out over five years of the development (it would be a 60% credit the second year, 45% the third year, etc.)
The goal of the project would be to encourage redevelopment of vacant land and assembly of smaller parcels, and developments that involve expensive infrastructure improvements. Projects located along the Route 1 corridor or near the College Park Metro would have to improve the value of the property by at least $5 million, while properties in the smaller commercial districts (Hollywood or Berwyn, for example) would only have to improve the property value by at least $100,000.
All property tax credits would have to be approved individually by the City Council. This is a potential tool that the City might use to redevelop some of the neglected properties in the City.
In tonight’s worksession, the Council will be considering the parameters of such a program.