Incentives on the table as Howard businesses struggle to handle stormwater run-off

Most cost-effective stormwater management needs to be done on commercial properties. How do you incentivize bu

A new and challenging front has emerged as the county tackles stormwater runoff on nearly 2,000 acres: How to incentivize businesses — many of whom have long decried stormwater management fees as punitive and asymmetric — into the fold.

Commercial properties, which often release large amounts of runoff, present a unique policy conundrum. While these properties provide the greatest return on investment in addressing stormwater issues, how projects on private property are tackled is unclear.

Without partnering with the private sector, the county cannot meet its state permit, which requires the county to treat roughly 2,000 acres of impervious surfaces by 2019 — ultimately violating the Clean Water Act and leading to substantial financial penalties, officials say.

Last year, the county treated 158 acres. Most are on public property.

Nearly 70 percent of the county's stormwater projects fall on commercial properties. But the county has limited access rights to jump start stormwater management projects, and many properties with the most potential to tackle stormwater runoff need the space to do business.

"Unless a property owner has volunteered their property, we haven't done much on private property at all," said Mark DeLuca, chief of the Bureau of Environmental Services. "That's why this effort is so important. We have to get everyone at the table."

Councilman Jon Weinstein has pushed for measures that impact how commercial property owners deal with stormwater.

"The easier projects on public land will have to give way to more difficult projects" on private land, he said. "That is the only way we're going to be able to meet our goals."

A recent push to bring businesses into the mix is underway. A nine-member work group created by executive order last month will meet Friday to discuss ways to incentivize businesses and developers to help manage the county's stormwater runoff. The work group includes developers of industrial and commercial office parks, business owners of properties with large impervious acreage, and individuals with experience in engineering and finance. The group's recommendations are due to the County Council and the administration by September.

Last month, measures introduced by Weinstein to reduce the "disproportionate" hardship on commercial property owners passed the council, effectively reducing the maximum stormwater fee from 20 percent of the property tax bill to five percent over three years. The measures also removed caps on credits for remediation projects from 50 percent of the fee to 100 percent of the fee under certain circumstances.

Business with large amounts of impervious acreage, such as large warehouses, parking lots, shopping centers and auto dealerships, have been hit hard by stormwater management fees and requirements, which are calculated based on the amount of impervious area, according to local business owners.

Impervious surfaces like streets and rooftops increase runoff by preventing water from soaking into the ground. Water carries sediment, chemicals, debris and toxins picked up along the way to local waterways.

Manekin, a commercial real estate company that owns a large distribution center in Jessup, passes its stormwater fees to its tenant and absorbs costs on areas of the center that are fully leased.

"The challenge is overcoming not just the cost of stormwater projects but also the impact on the usability of the property," said Cole Schnorf, Manikin's senior vice president and director of development. . "That varies from property to property and its age."

The way the fee is calculated for different property types can create an "adversarial relationship," particularly between businesses that build up instead of across land, said Leonardo McClarty, president and CEO of the Howard County Chamber of Commerce.

"Businesses as a whole understand the importance of protecting the Bay," McClarty said. "But how fees and costs are allocated for residential, commercial and industrial properties needs to be more equitable."

Although state lawmakers last year lifted a 2012 state mandate requiring 10 local jurisdictions to establish a fee, the county is still required to meet federal and state requirements to treat 20 percent of untreated impervious area by 2019. The County Council shot down an effort led by the administration to repeal the fee earlier this year.

As surrounding jurisdictions eliminate watershed protection fees, some business owners worry businesses may turn away from the county because of the "competitive disadvantage" created by the fee.

Although it is difficult to provide concrete examples where this was the case, the scenario is feasible, said McClarty.

Weinstein worries businesses may opt to abandon warehouses because of the high cost of bringing old buildings up to compliance with recent stormwater management requirements.

"If we don't address this head on, the path we're heading on could be a fiscal business nightmare," Weinstein said.

Some business leaders say the private sector was not sufficiently included in state and national discussions when environmental regulations and laws related to stormwater management and watershed protection were drafted.

"The state missed the ball in terms of including major businesses," Weinstein said. "If the framework had been more inclusive of the polluters and less about the surface the water runs over, then we'd be in much better shape."

Mark Southerland, vice president of AKRF, a local environmental engineering firm, said the county faces "a legacy problem."

Properties with concentration of impervious surface developed before the early 2000s — when federal requirements stressed controlling the quantity of runoff over the quality — were given "a free pass," said Southerland, who chairs the county's work group and is also a member of the county's Environmental Sustainability Board.

As stricter federal and state requirements came into place, methods to handle stormwater have evolved significantly from simple controls on pipe discharges in the 1990s to the recent advent of green infrastructure, which creates stormwater management systems that mimic nature and soak up water while providing habitats and flood protection.

"I don't think many people question this needs to be done. We just need to determine the most cost effective and fair way. We are all part of the problem and we all have to step up and do what we can," said Southerland.

Officials expect the number of treated acres to rapidly increase, with projects already underway. The county has devoted the first year to planning and phasing, and is prioritizing 148 projects based on two watershed assessments. Two other studies will be completed this year.

"We have to think outside of the box," said Weinstein, who envisions commercial property owners will have a menu of incentives tailored to their concerns. "Everyone needs a seat at the table."

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