By Emily Washington
Barbara Schaefer McDuffie, Director of Baker Tilly moderated a ULI Trends Conference panel on the ongoing redevelopment in Montgomery County’s White Flint. The panel featured Don Briggs, President of Federal Realty Investment Trust, Diane Schwartz Jones, Director of Permitting Services for Montgomery County, Bill Hard, Executive Vice President of LCOR, and Francine Waters, Senior Managing Director of Transportation and Smart Growth for Lerner Enterprises. They discussed their roles in the redevelopment process, representing the public and private sectors.
Early on in White Flint’s redevelopment, both county officials and developers recognized infrastructure financing as a challenge. While initially, the developers favored Tax Increment Financing, in which the growth in property taxes spurred by this development would be used to pay debt taken out for infrastructure, Schwartz explained that county officials vetoed this approach because of the uncertainty involved in predicting future tax revenues. “The bonds would have been issued because the county couldn’t control development timing. A TIF would have counted against our debt limit, meaning less borrowing potential for schools, roads, and other county priorities.” Briggs said he came to agree with the county’s perspective because of Montgomery County’s reputation for having the political will to provide high quality public services and because of the county’s strong balance sheet.
He explained that instead of a TIF, he came to support the county’s favored financing method of a Development Impact Tax. “Developers didn’t intend for the county to pay 100% of needed infrastructure improvements,” he said. “ The question becomes, ‘how do you captures the private sector?’ It’s easy for landowners to build roads on their own property, but we chose a different tranche. We chose a Development Impact Tax that provides a surcharge on private landowners in the district because everyone’s land values will be going up as a result of this project.”
Infrastructure changes on the 400-acre site include a new grid network of streets to provide an option for automobile transportation aside from Rockville Park. Additionally, the White Flint Development Partnership has hired AECOM to provide strategies to transform Rockville Park into a grand boulevard with the hope of making this thoroughfare more accessible to pedestrians and bicyclists. While White Flint has Metro access that provides commuters with a transit option to reach DC and other destinations, the transit plan includes rapid transit on Rockville Pike to provide a commuting option aside from personal automobiles for shorter trips.
The three developers working in the White Flint area are all also stakeholders in the Tysons Corner redevelopment. They commented that the development process in Fairfax County has differed significantly from Montgomery County because in White Flint, the developers have been able to work together to jointly develop infrastructure plans. In Tysons Corner, 35 property owners are involved in the redevelopment, too large of a group to reach consensus on providing these public goods. While the developers in White Flint are competing for tenants, at the same time this small group or stakeholders is dependent on one another for the area’s overall success.