Jefferson Tech Park: Worst financial deal and biggest taxpayer giveaway!

I recently provided an update on what I consider to be the worst financial deal and biggest taxpayer giveaway in the history of Frederick County.

The prior Board of County Commissioners entered into a 30-year Tax Increment Financing (TIF) agreement with the developer of the Jefferson Tech Park, allowing the developer to use every penny of property tax revenues generated by the project over thirty years to pay for costs that a developer traditionally pays for.

I am sharing this information because I believe citizens have a right to know that millions of property tax dollars are being shifted to benefit the developer. How much? $89 million!

So what does this bad deal mean? The developer was permitted to spend more than $25 million from the sale of bonds to construct an interchange and a bridge over US 340, to make required road improvements, and to make sewer improvements. Just like a mortgage, where you pay back your loan over time, the total amount paid is higher than the price of your home due to interest payments. It will cost taxpayers $89 million to pay back this $25 million in debt. Remember, it is customary for developers to take on these costs. It is a cost of doing business typically financed by a bank, with no obligation to use your tax dollars.

While the prior board touted this project as creating as many as 7,000 high-tech jobs, all the development to date has been residential. This may change as the project builds out. A grocery store, hotel, and some offices are included in the plan.

Residents in this development are paying their property taxes just like every other resident and deserve and expect county services. However, their property tax payments are not going into the county general fund to cover their use of county services. As these new households add children to our schools, make calls for public safety response, and use libraries, parks and roads, all the other taxpayers in the county have to subsidize the cost of these services. This will be true for 30 years.

Unbelievably, the deal gets even worse. In 2006, the county required this developer to pay $8 million for an addition to Crestwood Middle School because the project would overcrowd the school.

The last Board of County Commissioners allowed the developer out of this contract and allowed them instead to pay $800,000 in school mitigation fees. County taxpayers are now stuck paying the remaining $7.2 million to build the school addition.

It is hard to understand how the prior administration could enter into such a bad financial deal. It allows tens of millions of property tax dollars to be diverted and lets the developer out of a contract to build a needed school addition.

In my view, it is a travesty and the worst financial deal in the history of Frederick County. Many citizens do not even want the additional development and are rightly angry about having to pay for it.

Never again! My pledge to you is that this kind of bad deal will never happen on my watch. As your County Executive, I take my responsibility seriously to protect taxpayers. I have put in place new policy to make sure this kind of deal is not allowed. County policy now prohibits Tax Increment Financing for any residential housing project. Taxpayers should never be asked to subsidize residential housing.

While I firmly commit to never allowing this kind of bad deal to happen again, it is important to recognize that a future administration could allow this again. It is up to voters to hold their elected officials’ feet to the fire.

This blog entry was originally published as part of a column here (on page 7 of the August edition of the Emmitsburg News-Journal).