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City May Establish a TIF District to Support Route 1 Undergrounding Project

At tonight’s worksession, the City Council will discuss an option of funding the undergrounding of utility line on part of Route 1 using Tax Increment Financing (TIF). The TIF model would dedicate increased property tax revenue from future development (which would hopefully be encouraged by the undergrounding of utilities) to pay for it.

College Park has been advocating for revitalization of the US Route 1 corridor for decades. Significant progress is being made in redeveloping obsolete properties and improving infrastructure, however, the kind of transformational change envisioned requires a true public/private partnership.

The City Council may be requesting Prince George’s County to join the City in the establishment of a Route 1 TIF District in order to support the public improvements needed to facilitate and complement private development.

One of these public improvements is the undergrounding of utilities in conjunction with the State Highway Administration (SHA) project to reconstruct the roadway to enhance safety, traffic flow and aesthetics and to accommodate pedestrians and bicycles within a complete street. This project is currently in the design phase and since the SHA will only pay to relocate aerial utilities to another above-ground location, the City and others have been working to find a cost-sharing solution so that the utilities may be placed underground. A recently completed feasibility study prepared for SHA and funded by the City and the University of Maryland estimates the City share of the cost of undergrounding between Paint Branch Parkway and Greenbelt Road to be $14 million
dollars.

The SHA has informed the City that a design decision needs to be made as soon as possible so as not to jeopardize the project schedule. The City is financially unable to commit more than 50% of any future incremental tax revenue to the project and this amount is not sufficient to cover the annual debt service for the project. If the County could pledge even a much lower percentage of its projected tax increment from current and proposed new development on Route 1, this project would likely be feasible.

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