What the hell happened? Part III

It's been a little while since we talked about what happened at and after the Charrette. One of the issues of concern is who's going to pay for all the pretty stuff in the plans -- namely, the plazas, landscaping, and other street dressings. Related to this concern is who's going to pay for much needed infrastructure -- road improvements, parking, and so on.

Before we get into this, it's important to remember there's a lot of money tied up in the dirt and parking lots of Town Center. Over the next 30 years, this money's going to make a lot of people rather wealthy. Just keep that in mind.

In the Flier today, there is a story about this very topic (can you guess why I decided to write about it today?). Taking center stage is one of the most disliked men in Columbia, General Growth Vice President Dennis Miller. There are plenty of things to dislike about the figure head of our corporate overlords, but I try to keep in mind that he, like the rest of us, is just trying to do his job. Let's go to the tape, er, paper...

In the future, Columbia's downtown should be maintained with the same attention to detail as that paid to a golf course, a vice president of the planned community's developer said last week.

Plants, sidewalks, benches and services such as trash pickup in a redeveloped Town Center should receive a high degree of attention and maintenance in order to make it a first-class urban area, said Dennis Miller, a vice president with General Growth Properties Inc.

But who would perform and pay for such maintenance remains unclear, Miller and officials of Howard County and the Columbia Association said.

Yup, nothing new there. But further down, there's this...

The group discussed the idea of possibly using tax revenue generated from new downtown development to pay for maintenance.

"There should be some kind of dedication of a portion of the funds to Town Center," Miller said.

Ah yes, that's what I've been waiting for. Why not make those who've spent so lavishly to live in our new Town Center pay for the good things we all want to enjoy? To be sure, the value of Town Center land is only going to go up (and up and up and up and up and...), so why not take a bit of the increased tax revenue, divert it from the General Fund, and put it back into the place it came from?

Miller's talking about small potatoes, however. It sounds like he wants this dedicated portion of money to be spent on the little things, like flower bed maintenance and trash collection. Don't get me wrong, these are things that need to be done if we're going to have a truly great Town Center, but the money involved is tiny compared to what we're going to spend on roads, school improvements, transportation, and all the other infrastructure improvements making up the foundation of the new development.

Because Town Center development will necessitate these improvements, such development should pay for at least some of it. Through the use of Tax Increment Financing, other cities have found ways for development to pay its own way. The quick and dirty explanation of TIF is that increased tax revenue resulting from increased property values (brought about by development) is used to finance infrastructure improvements, as well as other things. Special districts are usually created for this purpose, and bonds are issued to pay up front for the infrastructure. These bonds are then paid off using a portion of the additional tax revenue. How much of these revenue increases remain in the special district is something that needs to be worked out.

Another solution is the use of special taxing districts, where property owners pay a little bit more in taxes, with the money going back into the district. This is probably not going to win the support of General Growth, as increasing the tax rate on Town Center property will bring about decreases in the value of the land -- meaning less profit for them. However, a little less profit never hurt nobody. Remember, we're talking about a lot of money here.

Without question, such taxing schemes are complex and require a lot of work to start. But they are at least predictable and provide a guaranteed source of revenue for debt service. It would not be hard for someone in the county's Finance office (or for a consultant) to generate a rough estimate of how much money we're talking about -- a figure that would be very valuable to know when discussing the merits of such programs.

Regardless, I'm glad to see that GGP is at least open to the idea of using tax revenue to pay some of the costs of their development. Now we just need to convince them that spending more money on infrastructure will surely have a multiplier effect on the value of all Town Center properties; that is, a better maintained downtown -- in terms of street dressings as well as actual streets -- is good for the current residents of Columbia, our future neighbors, businesses, and landowners.

There's a lot of money in Town Center, enough to make tidy profits for both GGP and the community. It's all a matter of how you allocate it. However, as county planning director Marsha McLaughlin has frequently said about the Charrette: "The devil is in the details." She better be careful -- we might start to believe her.