College Park approves developer tax cut waiver for ‘ineligible’ projects

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College Park City Council appears set to grant a student-housing development a tax cut the project was once ineligible for. 

At its March 9, 2021, meeting, a split College Park City Council approved a measure that allows the city to grant an otherwise-ineligible development project a Revitalization Tax Credit through a waiver, but only if city officials previously granted one to a specific development in error. The measure was approved by a vote of five to three, with City Councilors Fazlul Kabir, Maria Mackie and Denise Mitchell voting against. Councilors Katie Kennedy, Monroe Dennis, Llatetra Esters, Dennis Rigg, and Robert Day voted in favor. 

The changes to the Revitalization Tax Credit were spurred by a tax credit granted to Rhode Island-based Gilbane Development Co.’s Tempo multi-family student housing project, which is already under construction near the intersection of Berwyn Road and Baltimore Avenue. The 300-unit project was previously known as the Northgate development.

The project applied for a Revitalization Tax Credit in 2019, with a total value of $571,000 over the five-year term of the credit. The application was processed by city staff, and unanimously approved by College Park City Council at its Jan. 14, 2020, meeting. But student housing projects are ineligible for the tax credit program, a rule approved by City Council in 2015. Somehow, that discrepancy went unnoticed until June 2020, when city staff informed Gilbane officials that the tax credit was withdrawn because it was issued in error. In November 2020, Gilbane officials asked College Park to find a way to make them eligible for the tax credit.

Those in favor of the waiver said the city needed to make-good on its mistake in part to show the city was a good business partner to the development community. 

“This Council unanimously made a commitment to make this tax credit, but it was a mistake,” said Rigg during the meeting. “I support this because this is a way of holding ourselves accountable and …making an important partner with the city whole again.”

Others in favor of the waiver emphasized perceived long-term benefits derived from the student-housing project, including redevelopment of a long-abandoned restaurant site.

“An overriding reason for even consider a tax credit for the project was that for years there was a vacant unused property on Route 1 that was effectively an eyesore,” said Dennis. “We are in fact taking a couple of properties that haven’t been tax generating and we are improving and enhancing the tax revenue that will eventually be generated multifold.”

Those opposed to the waiver said City Council should stick to its previously defined policies. 

“I do not believe we should respond to this error by making another error,” said Mackie. “I hope we will put together measures to ensure a better process and to ensure these errors don’t happen in the future.”

City Council’s Tuesday vote does not automatically grant Gilbane the waiver for the tax credit. Rather, it approved only an amendment that allows the city to grant such a waiver. College Park City Council will separately consider a waiver request for Gilbane’s Tempo development at a future meeting.