Prince George’s County Executive Rushern Baker is asking the Maryland General Assembly for the authority to grant partial property tax breaks to developers, just months after securing a $50 million fund designed to draw business to the county.
The Prince George’s County delegation plans to submit a bill at Baker’s request that will allow county officials to waive some property taxes to developments in an effort to add jobs and grow the county’s tax base. Rather than pay tax on the redeveloped property, developers could agree to pay a smaller sum to the county for up to 25 years, according to Thomas Himler, the county’s deputy chief administrative officer for budget, finance and administration.
“This could very well be the deciding factor for a company to locate in Prince George’s County, or to expand and do other things,” said Jim Estepp, president of the Greater Prince George’s County Business Roundtable. “This is something we haven’t had in this county for a long time.”
But officials must balance the benefits of giving up valuable property tax revenue, Himler said. Developers would have to pay the county a minimum of 5 percent of the real property tax value of the new development. Payments will be negotiated based on each projects individual financial needs, and as much as 95 percent of the potential property tax revenue of new developments could be waived.
A process must still be established to grant the waivers. The County Council clashed with Baker last summer over whether the process to shell out the millions of dollars to developers had enough oversight of the county executive’s office, but Baker ultimately was still able to pass a bill giving him wide-ranging authority over the $50 million fund.
The benefits of attracting business that otherwise wouldn’t come to Prince George’s should outweigh the property tax revenue the county gives up, Estepp said.
“You have to invest money to make money,” he said. “If we create jobs and we bring investment to the county, there’s going to be a multiplier effect from that investment. You may lose on the property tax side but you’ll gain by bringing jobs to the county and hopefully getting people to stay and spend money in Prince George’s.”
To qualify for the tax break, projects must meet a host of criteria that align with Baker’s develop priorities for Prince George’s. Properties must be within half a mile of a Metro station, or within urban areas of the county marked for renewal. Specific requirements for hotels and office space call for hundreds of new job opportunities and millions of dollars in private investments.
