By Shreya Vuttaluru
The College Park City Council is revisiting the issues about a tax credit that was promised prematurely to Gilbane Building Company. In order to grant Gilbane the agreed-upon tax credit, the city would have to issue an ordinance that would amend the city code to accommodate this action.
Under the current city code, Gilbane is ineligible for a tax credit for the Tempo student housing project, as the building’s primary use is undergraduate housing. The council issued a letter of apology to Gilbane for incorrectly granting the tax credit. Gilbane requested an amendment to the city code in January.
Gilbane is the developer of two student housing projects in College Park: Tempo (previously known as Northgate), the 978-bed project currently under construction on Baltimore Avenue (next to Taco Bell), and Western Gateway, which is adjacent to the University of Maryland’s Robert H. Smith School of Business. The company also contracted with WMATA to build a mixed-use development adjacent to the College Park Metro Station.
Planned real estate development projects in College Park, including other student housing projects, total about $500 million, according to The Hyattsville Wire.
The Revitalization Tax Credit program was created to provide financial incentives for economic development and to establish revitalization districts in the city, according to the program guidelines. The council is split on the issue of whether or not to amend the city code to grant the tax credit.
The proposed ordinance would amend the city code such that the tax credit could only be granted to student housing projects in situations where it was first granted in error. If passed, the ordinance would allow the council to decide whether to grant the tax credit to Gilbane and determine the amount that could be allocated. As it currently stands, the tax credit would offer an estimated $571,020 in projected tax savings for Gilbane over a five-year period.
The council debated the ordinance at the Feb. 16 worksession.
Councilmember Maria Mackie (District 4) did not feel it was fair to the citizens of College Park to bear the brunt of the tax credit.
“We are living in precarious times; we don’t know what’s going to happen … and we have a lot of things on our plate,” she said, referring to the budget.
Councilmember Fazlul Kabir (District 1) agreed, comparing the situation to a routine traffic stop. When a member of law enforcement makes an error in issuing a ticket, they do not change the law such that the issuing of that ticket can be justified, he argued.
“I’m really struggling that we are making, or rather, changing the law to correct a mistake,” Kabir said.
Conversely, Councilmember John Rigg (District 3) expressed his belief that the council had a responsibility to uphold its previous unanimous vote to grant Gilbane the tax credit, citing the reputational hit that the council would take for reversing a unanimous decision.
“I think it sends the wrong signal to the development community … and [to the] people in our city who rely upon our staff,” Rigg said.
Councilmember Kate Kennedy (District 1) worried that businesses might be reluctant to invest in the city if tax credits were not available. She further stressed that this ordinance would not simply be a method of paying Gilbane, but rather an incentive to attract businesses to the area.
“Overall, when we attract businesses like this, the tax base goes up, and the taxes around the city actually go down for individual homeowners,” Kennedy said.
Councilmember Robert Day (District 3 ) concurred, adding that providing the tax credit to Gilbane would ultimately show businesses that the city is serious about working with them.
“We have seen the impact of not having businesses come to College Park,” Day said.
Councilmember Monroe Dennis (District 2) introduced the ordinance at the Feb. 23rd council meeting. The virtual public hearing was scheduled after press time on March 9.
As the meeting opened up for public comment, resident Mary King expressed her discontent at councilmembers for treating the ordinance vote so nonchalantly.
“We can do better and I think we need to do better,” she said. “We need more than just housing on Route 1”
A virtual public hearing will be held on March 23, when the council will debate an amendment to several election policies in the city charter, including giving the council authority to change the general election date and mailing absentee ballots to all residents.