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Community annexation plan includes tax break


Residents of a posh, waterfront condominium community on Annapolis' southeastern border could become city residents without having to pay municipal taxes for a decade under an annexation plan to be unveiled at tonight's City Council meeting.

City officials have been negotiating the deal with residents of the 407-unit Chesapeake Harbour for two years with the hope of eventually capturing $700,000 a year in taxes from the affluent community.

"In the short run and in the long run, the city makes out with this negotiation," said Alderman M. Theresa DeGraff, the Ward 7 Republican who will introduce the proposed charter amendment that would allow the deal. Ms. DeGraff managed Chesapeake Harbour for several years after it was built in 1984.

City officials and residents interviewed last week said they supported the measure.

The condominium complex already receives some city police and fire services free, officials said.

"This is an extremely valuable waterfront community that already avails itself of the amenities of the city," said City Administrator Michael D. Mallinoff. "They would be paying a lot in taxes so it could very well justify lower taxes across the city when it all comes in."

Alderman Carl O. Snowden, the Ward 5 Democrat who chairs the Finance Committee, promised that the city council would hold hearings. "That's a pretty substantial change, and it deserves public review," he said.

Residents of Chesapeake Harbour say the city won't lose too much money while it waits to tax the property because most residents sell their condominiums in about five years. The amendment would allow the city to tax a new owner immediately.

During the negotiations, Chesapeake Harbour residents won other concessions from the city. They would get to keep nearly $1 million in a reserve fund to which they contributed the past 12 years to pay for water and sewer services provided by the city. If the community had refused to be annexed, it would have been forced to give that money to the city.

In addition, the city would collect a $200,000 annexation fee upfront, half the usual fee, Ms. DeGraff said. She said the city would not be providing many more services than it already does.

Several council members are waiting to analyze the details before deciding whether to support the arrangement and the accompanying charter change.

"We've been talking about doing this for quite a while," said Alderman Louise Hammond, a Ward 1 Democrat. "We're only starting discussion on it. There won't be anything more than that."

The council meets at 7 tonight at City Hall.

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