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Support, opposition voiced to James Run project at Harford council hearing

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More than 50 people came in support and opposition of the controversial James Run Corporate Campus development project during a public hearing before the Harford County Council's regular legislative meeting in Bel Air Tuesday evening.

Many of those attending wore white T-shirts expressing their support of the project, many of which were with Dixie Construction Company of Churchville, a major road and utilities contractor in Harford County. On the back of the T-shirts was stenciled: "New Jobs – Safer Roads – Taxpayer Friendly."

Close to 30 people voiced their opinions — in favor and against the mixed use office, retail and residential development — during the public hearing.

The county council did not vote Tuesday on the legislation for James Run's tax-increment financing, or TIF. Action by the council will be taken "sometime in the November legislative session," Council President Billy Boniface.

The legislation will allow the developers of James Run to sell up to $23 million in low interest bonds to build roads and other infrastructure associated with the development.

The low interest rate would be made possible by the county government fronting for borrowing. Property tax revenue generated by the finished development will be dedicated to paying off the bonds. If there is any shortfall in such revenue, which is expected to occur in the early stages, special taxes would be levied on the development.

The county government will not be liable for repaying the bonds, nor will its credit rating be impacted, county officials have stressed.

Owners of the project are listed as 95-543 LLC and Bren Mar 1 LLC. During the hearing, Peterson Companies was identified as developer of the project's retail component. JR Lodging was identified as developer of the lodging component.

"Spur" growth, official says

County Economic Development Director Jim Richardson gave a presentation on the impacts of the project to the county council, including the estimated number of jobs that project could bring in and approximately when the county would begin to see revenue coming in through property tax.

Richardson stressed the appeal of the 111-acre James Run property on Route 543 at I-95, about seven miles southeast of Bel Air, and called it "one of the best locations" left along the I-95 corridor between Washington D.C. and New York City.

The project would have 388 lodging house units, 325,000 square-feet of retail space and 540,000 square-feet of Class A office space, Richardson said; however, some of his figures were in conflict with fiscal impact note prepared by the county auditor and made part of the legislation the council will be considering. That report, citing "the most recently submitted development plan," states the project will have 636 "rooms," 300,000 square feet of retail and 540,000 square feet of office.

One of the controversial aspects in some of the public's mind has been the residential component, which has grown to 656,500 square feet, more than 40 percent of the total project, and has frequently been referred to by the developer's representatives as a "lodging house."

The extended stay lodging, Richardson said, is aimed toward housing military members and government employees on temporary assignments, as well as families in need of temporary housing and corporate business travelers.

Currently, the county receives $69,000 in property tax revenue every year from the property, a former golf course and private park, but if the development is built, tax revenue can go up to $4.9 million over the course of several years, according to Richardson's comments to the council.

According to the fiscal impact note, however, the project won't generate enough tax revenue to cover the annual bond repayment costs until the 2018-22 period, when the note estimates $9.5 million in taxes will be generated annually against $8.6 million in debt service costs, a net to the county of $880,000. After that period, the project is estimated to generate $5 million up to $13 million, as the debt is repaid, according to figures compiled by an outside consultant.

It is estimated that 2,730 full-time direct on-site and 1,428 indirect jobs off-site would be created as a result of the development.

In addition, an estimated 2,234 temporary jobs, mostly related to construction, also would be created.

From the TIF, the county would mainly see a positive impact to water and sewer services and improvements to roads that would be affected by the project.

"TIFs spur economic growth," Richardson said. "There's no question about that."

Financing details

John Stalfort, bond counsel with Miles and Stockbridge, noted the bond would not exceed $23 million and will only finance public improvements to roads and other county or state-owned facilities.

In the first three years of the project, Stalfort said, there will be a shortfall in tax increment revenue in paying the bond's debt service. During that time, however, there will be a special tax imposed on the property owners only so the debt service can be paid.

Beginning in 2018, it is projected that the county will begin to see regular tax revenue coming in and the special tax would no longer be imposed.

Council questions, comments

County Councilman Dion Guthrie, who noted he voted in favor of the one and only TIF the county has approved for the Beechtree Estates development in Aberdeen, asked how that arrangement has worked out for the county so far.

Treasurer Kathryn Hewitt said the building in Beechtree Estates has gone "slightly slower" than originally anticipated. The James Run project has different projections, though, because James Run is a mixed-office commercial project and Beechtree was residential.

Guthrie asked how this slowdown in development has affected the county taxpayer.

"It has not affected the rest of Harford County taxpayers," Hewitt said.

Councilman Richard Slutzky said he was concerned with the vague use of "short term" residence for the lodging houses and said that could mean a person stays there for a month or for a year.

Councilwoman Mary Ann Lisanti asked Richardson if the road improvement to the area surrounding James run were necessary.

"Absolutely," he replied, noting if key intersections, such as Route 543 at the I-95 interchange, as well as at Route 136, were improved, it would move traffic better throughout the county.

It was also pointed out that the road improvements are not only not on the State Highway Administration's capital improvement plan, but also not on the county's for the foreseeable future.

The most common use of TIFs in Maryland jurisdictions are to build public improvements where a developer is obligated to produce them, said Keenan Rice, president of finance consulting firm MuniCap, which compiled the revenue estimates in the county fiscal impact note.

Councilman Jim McMahan said he was wary of the phasing of the development and the timeline of the project. He asked if the lodging would come before the offices, or if businesses would fill the office space at all. He also questioned if the project fits with the county's definition of mixed-office zoning.

Richardson said there county has already seen a demand for "extended stay housing" and said he believes the office market will definitely rebound in the near future.

Public comment

Charles Murray, who lives in the Waters Edge community near the proposed development, called James Run a "sound investment," especially since the taxpayers wouldn't be paying for it.

James Run, he continued, "will include much needed road improvements" and will be "a true public service."

Fallston resident Joan Ryder said she is concerned that people involved with the project aren't being identified or introducing themselves to the public. Ryder, real estate broker, was also a critic of the earlier Beechtree TIF.

Based off of the Beechtree TIF, Ryder said she feels the project won't be good for the county.

"Is this really the path Harford County will follow?" she asked.

Clarence Boyle, who lives less than 3 miles away from the proposed site, said he supports the project especially from the standpoint of having roads fixed.

"Who's going to fix our roads?" Boyle asked, noting that the state and county aren't even considering improving the area's infrastructure any time soon.

Boyle added that this will bring jobs to the county and "people making money spend money."

Morita Bruce, who spoke on behalf of the controlled growth advocacy organization Friends of Harford, said from the comments and questions raised by the county council, she had heard a lot of assumptions and "assumption is the mother of all screw-ups."

A market survey hasn't been done yet, Bruce said, and the job estimates are all, at this time, are all assumptions.

"This project is risky," Bruce said, calling it "an undefined, self-contradictory private project" that wants millions of dollars from the county and may not even benefit its residents.

This story is updated from an earlier version to include additional financial information and clarification of previous information.

Copyright © 2014, The Baltimore Sun
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