Hiruy Hadgu

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The Laurel Park Station Project Is A Tax Giveaway

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On July 21, 2017, the County Council held a work session to discuss the creation of the special taxing district (CR111-2017) proposed by the County Executive.

I shared my concerns about this bill here.

A public hearing was held on Monday July 17th, where only the developer’s representatives testified in support of the project.

I think the only individual who testified in support of the bill other than the developer’s representatives was the Deputy Director of Finance. Imagine my surprise when I found out that he was actually representing the county when he testified. We will get back to this later.

On Monday’s hearing, Councilwoman Terrasa asked why the County Administration is bringing this bill forward separate from the tax increment financing (TIF) bill.

Let me paint a picture of how a development project or any project for that matter is implemented:

Figure 1: Evolution of the TOD Through the Years. (Click Image to Enlarge)

  • The undertaker of this large project has an end goal. Build 1,000 units on a certain land and they want to build it by a certain date.

  • So they break down the project into small manageable pieces, set up a Gantt chart and start implementing.

  • Action #1: Change the zoning regulation. Set out to change certain areas of the county into transit oriented development (TODs) that allows developers to build the way they desire.

  • But they don’t want to alarm or raise awareness to they have to take incremental steps. As shown on the Figure 1, the TOD was passed in 2004, but it needed additional changes.

  • Subsequent changes took place through additional Zoning Regulation Amendments (ZRAs) as shown in the figure.

  • The new phase of the project now is to create a special taxing district.

  • Every activity is assessed risk-levels, which are priced into the project. It is highly likely that this project is going exactly according to the developer’s plan and to schedule.

In this particular step of the schedule, the goal of the developer is to simply get a special taxing district. The bill is set up to allow the developer to say "this is just a precaution. This is just reserving the right to tax with a set method and does not commit the county to levy any taxes or issue bonds."

BUT the next phase of the project will be to pass a bill to levy taxes and the justification will be "well you passed the bill to levy taxes."

Every step is incremental and is intended to reduce resistance.

To that point, there were members of the County Council who seemed to buy into this line of justification.

One council member asked "is there any harm to the county if this bill passes" and lo and behold the answer was "no."

We all know the answer: OF COURSE THERE IS HARM! The developers and their associates are pulling a fast one on the county and voting for this bill would be providing consent TO MORE DEVELOPMENT, which will degrade the quality of life in the district. One way it will do so is school over-crowding.

As I stated during my testimony on Monday, I have serious concerns about the impact of the development on schools. The developer mentioned all of the requirements for the allocation test have been met and the project can go on.

Figure 2: May 2015 APFO Test (Click to Enlarge)

Figure 3: FY 2015 Feasibility Study (Click to Enlarge)

The May 2015 adequate public facilities ordinance (APFO) test (Figure 2) shows that the elementary school district within which this project exists - Forest Ridge Elementary School - is closed even by the APFO's weak standards.

The FY 2015 feasibility study (Figure 3) also shows the elementary school as closed. 

Which test did they meet?

How are they allowed to build 255 homes per year in a school district that has been classified as closed for years?

Figure 4: Laurel Park Station Allocations (Click to Enlarge)

Here we are dealing with a massive redistricting project affecting nearly 9,000 students and the claim is that the numbers are already baked in? 

The current year's feasibility report shows that Forest Ridge will be sending 132 students. In 2018 and 2019 this project proposes to bring in more than 500 homes, which is on average, 250 students to the district.

Several questions were left unanswered at the hearing and some of the answers and justifications were incredulous.

  • The developer has successfully managed to evade the question “what happens to the project if the TIF is not approved?” They say that they have not done the “but-for” test. This is a crazy claim. They have had more than 12 years on this project. I find it hard to believe that they have not done the “but-for” test.

  • Several fallacious arguments were made at the working session. One argument was "they can develop the project without the train stop being there so we might as well pass the bill." 

  • Another council member suggested that "the absence of the stop could even give them more space to build more density." Here we are considering the passage of a bill to spend tax-payer money because we feel threatened with more density if the TIF is not approved to build garages.

Now let’s address the role of the county because I found this to be the most surprising part.

It was not clear to me who the Deputy Director of Finance and Director of the Department of Planning and Zoning (DPZ) were representing.

When asked by the Council whether a "but-for" analysis was done, the Deputy Director said "no".

The Director of the DPZ did not seem prepared to answer the questions that the council had regarding the plan, the TOD requirements, and seemed to advocate for TOD projects in general.

In my opinion, the stake holders are not being forthcoming and are hoping to evasively get this project approved.

During the working session, Councilwoman Terrasa said “I feel like there is information that you have that we don’t have”.

That is exactly how I felt. The process is not transparent. They want county money to subsidize their development and it is not obvious if all the Council members realize. The TIF bill will be in front of the next Council. If elected, I will not vote for it under any circumstances. There is a train stop 2,500 ft away. There is absolutely no need for another one.

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