Prince George’s County will give up more than $15 million to land a state agency and an associated mixed-use project at New Carrollton, but a top economic development official argues the spoils will far exceed the public effort to jumpstart transit-oriented development there.
The County Council on Wednesday is expected to adopt a 15-year payment in lieu of taxes for Berman Enterprises’ New Carrollton project, a development that will include a new headquarters building for the state’s Department of Housing and Community Development, 556 multifamily units and 61,000 square feet of retail. The DHCD building will deliver in 2015. The multifamily construction could start as soon as next year.
The $4.38 million PILOT amounts to a 75 percent tax break. Instead of paying taxes on real estate estimated, at build-out, to be worth $23.4 million, Berman will remit $29,438 (what it currently pays) plus 25 percent of the total amount of taxes related to the development.
The county will forgo $13.14 million in tax revenue over 15 years. Toss in a $2.25 million conditional loan provided through the county’s Economic Development Incentive Fund, and the package tops $15 million.
But the payoff from the growth at New Carrollton will more than offset the expense, said David Iannucci, assistant deputy chief administrative officer for economic development. Berman, Iannucci said, is investing $165 million in a project that is expected to add 450 full-time jobs (60 for county residents).
“It is critical to Prince George’s County that we get it going, that we get it in the ground and that we get a financial plan that will ensure Berman Enterprises has the financial model it needs,” Iannucci said of the project. “We’re serious about [transit-oriented development] and we’re making a serious effort at New Carrollton to make it happen.”
The PILOT agreement follows the March launch of”Jump Starting Transit-Oriented Development,” a county program designed to “break the inertia that still seems to hold back the private sector” from tackling Prince George’s 15 Metro stations. Five stations were deemed the highest priority — New Carrollton, Largo Town Center, Prince George’s Plaza, Branch Avenue and Suitland.
“The entire jumpstart TOD effort comes together in this opportunity,” Iannucci said of New Carrollton, “which we had to make successful.”