College Park Council split on tax cut rule changes for student-housing developer

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Details from a new application show plans for Northgate's southern face. This is the side that will be seen by travelers heading north on Baltimore Avenue. The brown strips are "cementious panels".

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College Park City Council is divided over whether or not to make-good on a tax cut erroneously granted to a developer last year.

The matter focuses on Gilbane Development Co.’s Tempo student-housing project already under construction near the intersection of Berwyn Road and Baltimore Avenue in College Park. In January 2020, College Park City Council unanimously approved a measure that reduced the city taxes on the property for the next five years, worth an estimated $571,000. But that approval, which required both city staff and elected officials to sign off, was found in June 2020 to be null and void because “multi-family student housing” projects have since 2015 been ineligible for the tax cut program, dubbed the Revitalization Tax Credit. In November 2020, officials with Gilbane requested the city modify the rules for the Revitalization Tax Credit so that the Tempo project could be eligible.

During discussion of the matter at its Feb. 16, 2021, worksession, several city council members expressed unease over the prospect of changing the rules for Gilbane, despite the embarrassing mistaken approval of the tax cut last year. City Councilor Maria Mackie, who is generally opposed to developer tax cuts, said she was uncomfortable with changing the rules for Gilbane, especially while the pandemic continues to disrupt the economy and tax revenue flowing to the city.

“We are living in precarious times,” said Mackie during the meeting. “We hope our budget is going to be pristine, but we don’t know. I do not feel giving a tax credit to Gilbane is prudent at this time.”

Likewise, Councilor Fazlul Kabir said he regretted the error, but he did not know why the city should feel compelled to give the project a tax cut anyway.

“I am struggling that we may be changing the law to correct this mistake,” said Kabir. “What happened about this tax credit is an error. That happened. And it happened at multiple levels. The developer, when they submitted the application, they should have had their attorney look at all the requirements and they did not. We, as a body, recognized that we made a mistake by overlooking the requirement.”

On the flipside, Councilor John Rigg pushed City Council to give Gilbane a tax credit for the sake of the city’s reputation among businesses and developers. He underscored that City Council unanimously approved of the tax credit last year on the argument the project would help achieve policy and economic development goals.

“I think the right thing to do here is to make right by our former commitment and make right by the vote we previously committed to – unanimously – and to close this chapter,” said Rigg. “I am uncomfortable with the confusion of the argument that we thought their case [for the tax credit] was so compelling a year ago but we don’t find it compelling now.”

Likewise, City Councilor Robert Day pushed for City Council to find a way to make Gilbane’s project eligible for the tax credit program.

“As my colleague said earlier, we voted unanimously for this,” said Day, referring to last year’s initial, erroneous approval of the tax credit for the project. “I think the right thing to do is to honor that.”

The matter returns to City Council for consideration at its Feb. 22, 2021 meeting.

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