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Hyattsville considers business improvement tax zone near mall

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Posted on: May 15, 2022

BY KIT SLACK

On May 2, consultants presented a study to the Hyattsville City Council intended to demonstrate that a business improvement district (BID) is feasible for the area around Hyattsville Crossing, formerly called Prince George’s Plaza. 

The BID would apply a new real estate property tax to 25 owners of multifamily and commercial property in and near the mall, and would not increase taxes for individual homeowners. The approximately $900,000 generated would be used to improve the area according to a business plan yet to be developed. The presentation mentioned marketing, beautification and public safety as areas for potential improvements. 

According to the presentation, median income in the Hyattsville Crossing area is $72,000, and 85% of those who live there rent. The percentage of housing units that are empty is lower than in the city overall, 4.3% as opposed to 6.3%, despite higher median rents ($1,640 versus $1,433).

Taxes provide an average of 60% of a BID zone’s total budget, according to the consultants’ analysis of nearby BID zones. Grants and program revenues make up the rest. The presentation gave examples of six nearby BID zones with tax rates of between $0.024 (Silver Spring) and $0.21 (Adams Morgan) per $100 of assessed real estate value.

HR&A Advisors, a real estate and public infrastructure consultant, prepared the presentation to the city council. The city council had awarded a $155,000 contract to HR&A Advisors to develop a BID strategy in August 2021, after accepting $125,000 from the Maryland-National Capital Park & Planning Commission towards the project.

In preparing the feasibility study, HR&A talked to a small group of stakeholders, which consisted of property owners and investors in the area, as well as Ward 3 Councilmembers Ben Simasek and Jimmy McClellan, and Stuart Eisenberg, executive director of the Hyattsville Community Development Corporation. 

In response to emailed questions about the project from a Ward 3 resident, Eisenberg expressed concern that small business owners in the area might be stressed by extra fees that their landlords charged them to cover new BID zone taxes. He also said that local governments have not fulfilled their responsibility to maintain public infrastructure in the area. 

In a HOPE (Hyattsville Organization for a Positive Environment) listserv post, Simasek said he had questions about the BID strategy’s alignment with city goals concerning small business development, affordable housing, and walkability/bikeability. “[S]ome mechanism is missing that would bring some of the larger entities to the same table to identify where interests align and work out how to invest in shared spaces and services,” he said, adding that residents and small business owners should have a seat at the table.

Ward 3 resident Chuck Perry, a former candidate for city council, opposes the BID proposal. In an email, he raised concerns that the BID would lead to increased policing that would harm Black residents. He attributed problems in the area to unaddressed low graduation rates at the nearby high school.

As for the BID process, under the plan presented to the city council, the next step would be to engage all property owners and create a steering committee to develop a BID business plan. After that, according to the consultants’ plan, those supporting the BID would seek state legislation lowering the threshold for approval from affected property owners to 51% from 80%, a goal that Montgomery County has already achieved. Finally, the group, along with Prince George’s County, would apply to establish the new tax rate and an approved BID plan for the area.

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