Kamenetz proposes more than $40 million in county aid for Towson Row

Tuesday, 05 December 2017, 05:04:36 AM. Baltimore County Executive Kevin Kamenetz is proposing to give more than $40 million in financial assistance to the developers behind the massive and long-stalled Towson Row project in downtown Towson.

Baltimore County Executive Kevin Kamenetz has proposed giving more than $40 million in financial assistance to the developers behind the long-stalled Towson Row project in downtown Towson.

The county would give the money up front to developers Greenberg Gibbons and Caves Valley Partners, who would repay it through tax payments over the next 20 years.

County officials say the assistance is necessary to jump-start the project, and will be a good financial investment.

Caves Valley announced plans in 2013 for Towson Row — a mixed-use development of office buildings, a hotel, apartments, student housing and retail shops anchored by a Whole Foods grocery store. At 1.2 million square feet of developed space, it would be as large as the Towson Town Center mall.

Contractors for Caves Valley tore down the old buildings at the development site, between Towsontown Boulevard and Chesapeake Avenue along York Road, in 2015. But the project has stalled, leavingbarren construction site surrounded by fencing in the heart of downtown Towson.

The Kamenetz administration plans to introduce the financial assistance package Monday night to the Baltimore County Council.

The package would include two pieces: $26.5 million related to property taxes and $16.4 million related to hotel taxes, for a total of $42.9 million.

Under Kamenetz’s plan, the developers agreed to forego two tax breaks — a Commercial Revitalization Tax Credit and a High Performance Building Tax Credit that reduce property taxes as those taxes increase — for which the project normally would be eligible.

Instead the developers would pay the full amount of property taxes, an amount expected to add up over 10 to 12 years to $26.5 million, effectively repaying that portion of up-front assistance, according to the Kamenetz administration.

The rest of the assistance — $16.4 million — would be tied to hotel taxes. Once the Towson Row hotel is up and running, the hotel taxes are expected to add up to $16.4 million within 20 years.

The Towson Row developers would not be paying any additional hotel taxes under the plan. Hotel taxes — set at 8 percent of the nightly room rate — are paid by customers of the hotel.

Kamenetz, a Democrat who also is running for governor, did not respond to a request for comment Monday. He previously praised the Towson Row project, calling it an “urban centerpiece” for the county seat.

To support its assistance plan, the Kamenetz administration is relying on an economic report it commissioned from the Sage Policy Group that said that public assistance is necessary for a “transformative” redevelopment project such as Towson Row.

“This partnership is critical to the completion of Towson Row, which will serve as a catalyst for new jobs and business development in downtown Towson,” the Sage report said.

The report predicts that once Towson Row is built, about 1,150 people will work there, earning salaries that total $53 million per year. More “indirect” jobs also will be created, and Baltimore County and Maryland will see an increase in sales taxes, income taxes and other fees, the report said.

County Councilman Julian Jones, a Woodstock Democrat, said he supports the financial assistance for Towson Row.

“I would like to see this project be successful,” Jones said. “I was told, basically, that if we did not do this, that there’s a chance that it would not be successful.”

Jones said the developers would have received “quite a few of these dollars” anyway, and it will be worthwhile to help jump start the development.

Other council members did not respond immediately to requests for comment on Monday, including Councilman David Marks, a Perry Hall Republican who represents the Towson area.

This financial assistance package won’t be the first steps the Baltimore County government has taken to help Towson Row project. Others include:

  • The Baltimore County Council passed a zoning bill in 2015 that gives significant flexibility from normal rules for Towson Row , on features such as building height and signage.

  • The county council approved the sale in 2015 of an undeveloped, 0.625-acre parcel of land on Susquehanna Avenue to the developers for $820,000. The parcel is surrounded by Towson Row parcels, and a previous attempt to sell to another developer in 2008 for $1.955 million fell through after the developer backed out.

  • The county is leasing a former county office building at 301 Washington Avenue to Towson Row for $85,750 per year. The no-bid lease was approved by the County Council in 2013 even though another company had bid to lease the property and had raised concerns.

  • The Baltimore County Revenue Authority, an independent county agency that manages public parking garages and golf courses, has been discussing whether to partner with Towson Row on the development’s garage. Revenue Authority Director Ken Mills did not respond to a request for comment Monday.

The Baltimore County Council passed a zoning bill in 2015 that gives significant flexibility from normal rules for Towson Row , on features such as building height and signage.

The county council approved the sale in 2015 of an undeveloped, 0.625-acre parcel of land on Susquehanna Avenue to the developers for $820,000. The parcel is surrounded by Towson Row parcels, and a previous attempt to sell to another developer in 2008 for $1.955 million fell through after the developer backed out.

The county is leasing a former county office building at 301 Washington Avenue to Towson Row for $85,750 per year. The no-bid lease was approved by the County Council in 2013 even though another company had bid to lease the property and had raised concerns.

The Baltimore County Revenue Authority, an independent county agency that manages public parking garages and golf courses, has been discussing whether to partner with Towson Row on the development’s garage. Revenue Authority Director Ken Mills did not respond to a request for comment Monday.

Also, Caves Valley Partners voluntarily agreed to pay additional fees to compensate for the lack of open space within the development.

Under rules in place at the time the project was announced, Towson Row would have only paid $55,000 in open space fees. The developers later agreed to pay an additional $95,000 in open space fees, plus contribute $200,000 to artificial turf field projects in the area, including at Towson High School. The rules for open space fees in downtown Towson were later changed.

Caves Valley Partners blamed some of the Towson Row delays on hard rock below the surface that made the plans for an underground garage unworkable and forced a redesign of parts of the project.

Then in May of this year, Caves Valley brought in Greenberg Gibbons, another well-known local developer, as a partner and “co-developer” on the project.

Greenberg Gibbons brought an undisclosed amount of financing to the project and took the lead on all components of Towson Row except for the office building, which Caves Valley will handle.

pwood@baltsun.com

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