On Friday, County Executive Marc Elrich issued the first veto of his administration against Bill 29-20 by the county council offering 15-year property tax breaks for high-rise developments at Metro stations. Adam Pagnucco wrote an informative blog post discussing this veto on Seventh State at http://www.theseventhstate.com/?p=14013. Adam discusses what the County Executive got right and got wrong in Marc Elrich”s detailed explanation of his veto, in Adam’s opinion, of course. It’s well worth reading.
In response, Councilmember Andrew Friedson, one of the bill’s sponsors, wrote on Facebook:
“I’m confident we will have the votes to override the veto to continue our efforts to make Montgomery County more attractive and accessible for new residents, businesses, and investment.
There are so many misleading points in the County Executive’s lengthy statement so I won’t dispute line by line but here are the few key points: 1) The County Executive’s core argument is that these projects would proceed regardless so this incentive comes at a cost despite overwhelming and undeniable evidence demonstrating that simply isn’t the case. None of the WMATA sites are being developed and developers with Joint Development Agreements are walking away all over the region, due to unique infrastructure requirements on these sites, high costs of high-rise construction, etc. 2) These sites currently collect ZERO property tax, generate ZERO housing, and provide virtually no public benefits aside from surface parking. I view that as an abject public failure, but respect anyone who prefers this status quo. 3) Multiple fiscal analyses have demonstrated both that high-rise projects don’t work without the incentive and that the Grosvenor project in particular would generate more revenue to the County in impact and income taxes than the property tax abatement (which the county wouldn’t otherwise receive without a project). 4) The Executive “spiked” his fiscal analysis and has been trumpeting those “costs” despite the fact that they’ve been discredited. For instance, they assumed all 1 bedroom units and all sites generating N. Bethesda rents — both representing far higher numbers than any semblance of reality. 5) The bill gives discretion to start the abatement in Year 2 instead of Year 1 in case Question A doesn’t pass (which shows why it should!). This lowers the value of the benefit, but ensures the County receives the revenue/tax base benefit of the new construction in the future.
All that said, here’s the bottom line: if you believe in the social, economic, and environmental value of high-rise, transit-oriented development and that we have a severe housing crisis that has severely hindered our progress, this bill simply forgoes revenue we wouldn’t otherwise receive to generate housing and smart growth development we desperately need in the strategic locations where we clearly want it. If you’re willing to wait until the market changes — which could easily be 10, 15, 20 years, or to accept low/mid-rise development at Metro sites that will stand for 50-60 years, then this isn’t the best or most appropriate solution. That’s really the choice. The rest of the same, tired talking points aren’t really relevant to the discussion.
As you know, Friends of White Flint advocated for passage of this bill, and we hope the Council overrides this veto.