Live blogged from the Steering Group’s meeting with Planning Board staffer and economics/financing wizard Jacob Sesker (mostly Sesker’s comments, with a few questions and comments interspersed):
Private implementation costs, public implementation costs, and mixed costs, called “district” costs.
Rockville Pike is about $66 million, Streets another $61 million. The majority of the district roads are in the middle of the sector plan. The majority of the costs in the analysis are infrastructure, and infrastructure is generally “roads.” If the plan ends up with some additional costs (perhaps involving transit), those costs would have to be directed into this analysis separately and the model might change. But the reason for talking about transportation costs is because of the proposal to suspend certain other transportation impact models (such as PAMR). The earlier economic analysis by the Developer Collaborative did include other matters, including storm water management and utilities relocation underground. The developers are including these improvements in their plans, but some of these are off any of these sites, and benefit more than one site. These are contended to be burdens which should be included in the analysis. And the private sector road building is much less expensive than the assumptions in the analysis.
Total value of new development in the White Flint plan = almost $11 Billion. Both the County and private economic analyses come up with roughly similar additional value amounts.
New tax revenues over life of the Plan = another $1.1 Billion in new taxes, over and above existing value today. These are revenues which the county otherwise wouldn’t be getting, even if the revenues are generally spent in the Sector Plan area in support of the proposed improvements. If we don’t have a mechanism to provide for these improvements, we won’t see them, and will see a lot more “place-holder”-type activities which don’t raise revenues or provide community benefits.
Special tax assessments are predicted in the analyses. What is the mechanism for the county to do this? Either a taxpayer voter (80% approval under current law), or levy the amount over the existing Metro Station Policy Area. Need the revenues from new development to pay for the required infrastructure. Bond holders will want to see specific dollar income mechanisms; so analyses build in projections of various scenarios of these special tax assessments. Assessments would be only on commercial uses, but would apply to both new and existing commercial uses.
Gap financing to cover bonds in the early years, and when all three phases of development bonds are in effect simultaneously. County estimated the gap would be 10%; private estimate was 6%.
Issues: 1) should new residential development make a payment to the district that is equivalent to the current transportation impact tax for residential development? Appendix suggests that it should.
2) Should the current transportation impact tax (or equivalent payment by new commercial development) be eliminated or reduced for the White Flint Sector Plan? Appendix suggests yes, to avoid disincentives for development.
3) Should the private portion of district financing come from a special tax assessment on all new and existing infrastructure? Appendix suggests yes, because of the recurring and regular income stream to borrow against.
4) Should the special taxassessment on all new and existing commercial uses be estalished at a rate equal to 10% above and beyond the current ad valorem real property tax bill?
5) should incremental public sector revenues be used to fill the financing gap? Appendix suggests yes. because what are the alternatives, and to speed up the pace of development.