The day after he dangled $2 million in interest-free financing in front of the Columbia Association, Rouse Co. executive Alton J. Scavo said he doesn't think the association will take him up on what may or may not be his final Key property offer.
But if Columbia officials are trying to play a game of "chicken" - hoping Rouse will offer to pay for all of the recreational amenities in the future North Laurel development - they're going to lose, Scavo said.
"No way in heck that that will ever go anywhere," Scavo, senior vice president of Rouse, said yesterday when asked about a scenario several council members have mentioned: Rouse would pay outright for the development's pool, tennis courts and parks, then allow the association to annex it.
"Why would you pay for all the improvements, and why would CA get the lien?" he said. "If we're going to put up all the money ... then we'll receive the reward. It doesn't make any sense.
"If we want to play 'chicken,' so to speak, ... I only suggest people look at the projects we've done all over the country ... , then clearly come to the conclusion that, believe it or not, we've got some experience and pretty successful experience at that."
Howard Research and Development (HRD), a Rouse affiliate, has asked the Columbia Association to annex a future development planned for 665 acres in North Laurel. Under the plan, the association would provide a pool, parks, pathways and other recreational amenities for the development. In return, the association could collect assessment revenue from about 2 million square feet of commercial space and about 1,200 apartments, townhouses and single-family homes.
In a letter presented Tuesday at a meeting of the Columbia Association board of directors, Scavo offered to sweeten the deal, which is likely to die in a tie vote of the council Sept. 28.
He said Howard Research and Development would lend the association about $1.18 million to build the pool. The association would pay the money back, without interest, two years after the pool opens. HRD also would build the development's parks and neighborhood entrances. The association would reimburse the company the $1.11 million cost, also without interest, once the development starts making a profit for the association. Under the original plan, the association would have had to issue bonds or borrow the $2.29 million at market rates.
Rouse's new proposal reduced the number of recreational amenities planned for the development.
"This is very fair," Scavo said. "The idea of financing interest-free ... is outrageous. And you say, 'Why are you doing that?' Because I still think we get a benefit."
The deal would allow Rouse to market the property under a brand name well-known for recreational amenities and quality of life, Scavo has said. But he said Columbia also would benefit by increasing its size and influence while collecting millions in association liens.
Under the new plan, the project would add at least $4.2 million to association coffers over 20 years, up from a minimum of $2.7 million under the original plan, according to Rafia Siddiqui, the association's vice president for administrative services. Even under the original plan, Siddiqui has said, the return could be far greater, as much as $22.8 million over 20 years.
But Scavo said he expects the association to give the plan the thumbs down. The plan also must be approved by the Kings Contrivance Village Board, because the development would become a fourth neighborhood in that village. Only one member of that five-member board, Robert Patchan, has spoken against the plan.
"To be very candid with you, I don't think CA's going to take it," Scavo said, noting that five of 10 council members said at a hearing last month that they were inclined to vote against the plan. "You need six or more votes to carry," he said. "I can count up to 10. Or six even. And I didn't see six."