In Prince George’s, a battle over whether developers must fund school construction

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Prince George’s County Executive Rushern L. Baker III vetoed a council bill that allowed lawmakers to waive school surcharge fees for some residential developers. His veto was overridden. (Bill O’Leary/The Washington Post)

By Rachel Chason

In the final months of his eight-year tenure, Prince George’s County Executive Rushern L. Baker III is battling with the County Council over legislation that touches on two of the county’s most hotly debated issues: education and development.

The back-and-forth, which led Baker to issue his third-ever veto, began last month, when the council approved a bill allowing it to waive a school facilities surcharge for some residential developers. Supporters say such waivers would spur development in areas where long-vacant buildings have frustrated lawmakers and residents alike.

Opponents — Baker chief among them — say the legislation is an illegal move by the council that could deprive the already beleaguered school system of an important funding source that has been codified in state law since 1995. The state General Assembly, not the County Council, is the body that has the authority to impose or waive taxes, Baker wrote in his veto letter.

“I am obligated to respect the rule of law,” Baker wrote in the Oct. 1 letter.

Lawmakers overrode Baker’s veto the next day by a vote of 7 to 2.

Council member Derrick Leon Davis (D-District 6), one of the legislation’s two sponsors, said council members have consulted with their lawyers and “believe we have the authority to do this” because of the council’s power to implement land-use policies. They are also convinced that waiving the surcharge would lead to new projects that would bring in additional tax revenue for the school system.

“I have observed the inability to catalyze development over the past 10 to 15 years,” said Davis, who is especially focused on development around Largo Town Center, an area of his district where a regional hospital is being built. “This would just be another tool in our toolbox.”

The General Assembly previously has passed legislation exempting other types of development in Prince George’s from the surcharge, including retirement communities and some student housing.

Fees from the surcharge on residential developers, which totaled $28.5 million last fiscal year, are leveraged by the county to borrow up to $500 million for school renovation and construction, said Thomas Himler, Baker’s budget chief. The school system’s capital improvements budget is already backlogged; the county sent more than 134,000 students home early one sweltering day last month because of air-conditioning problems in its public schools, which are on average nearly half a century old.

“For the County Council to turn around and potentially grant waivers without any basis does not make sense,” Himler said. “We already know we have a school construction gap, and we have multiple billions of dollars in need.”

The fee, collected by the county’s permitting department before it grants use and occupancy permits, is $9,317 per unit for buildings inside the Capital Beltway and near Metro stations, and $15,972 per unit for all other buildings.

The law gives the council the option of waiving the fee for multifamily projects within the Beltway, near Metro stations or in some additional locations close to major roadways. The council must approve each waiver individually.

Council member Obie Patterson (D-District 8), the legislation’s other co-sponsor, cited the Oxford apartment building in Oxon Hill as one property whose viability could depend on getting a school surcharge waiver.

The Varsity Investment Group received county approval last year to turn a long-vacant office building at 6009 Oxon Hill Rd. into a 187-unit apartment complex with a business center, entertainment room and dog park. Donnie Gross, a managing member of Varsity, said paying the school surcharge fee would cost him an additional $3 million, forcing him to “reevaluate our rent structure” for the project.

Gross said the company “took a lot of risk” when it bought the building, which had squatters living inside and broken first-floor windows. Without increasing rents, he said, “we would be underwater.”

Across the region, other local governments are also considering ways to encourage redevelopment of empty office buildings, with the commercial vacancy rate in the District and its suburbs nearly double what it was a decade ago.

The D.C. Council is considering legislation that would offer tax abatements for developers who convert office space into residential units in certain downtown areas, and the Fairfax County Board of Supervisors changed the county’s land-use plan to make such conversions easier.

Both Patterson and Davis suggested that providing exemptions for certain projects could ultimately bring in more revenue for schools as new taxpayers move into the new buildings.

“We believe we acted in the best interests of those who voted for us,” Patterson said. “The county executive certainly has the right to oppose us.”

Until now, the highest-profile back-and-forth between Baker and the council was in 2015, when the council scaled back Baker’s attempt to raise property taxes by 15 percent to increase funding for schools. Then, too, Baker’s veto was overridden.

The county attorney has recommended the council seek an opinion from Maryland Attorney General Brian E. Frosh (D) on the legality of the surcharge waiver law. But a spokesman for Frosh said the council has not done so.

Council member Deni Taveras (D-District 2), who cast one of the two votes against overriding Baker’s veto, said the surcharge should stay in place because of the number of schools already grappling with overcrowding and aging infrastructure.

“I don’t think it’s the right course of action to allow these developers to get a windfall,” Taveras said.

Theresa Mitchell Dudley, president of the Prince George’s County Educators’ Association, said it was “ridiculous” to waive the surcharge. “There is no shortage of people wanting to build houses in Prince George’s, and there are no schools being built to support these communities,” she said.

via Washington Post 

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