March 23, 2017
Politics & Opinion
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Payment In Lieu Of Taxes

Steve Schuh
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February 22, 2017

When examining any economic development agreements that could benefit the citizens of Anne Arundel County, we need to pursue the best outcome for taxpayers. We need to partner with entities that can assist the county in providing extraordinary public benefits to residents.

The proposed Payment in Lieu of Taxes, or PILOT, legislation now before the General Assembly is a first step in achieving both those goals.

The county now has the opportunity to partner with one of our largest and respected employers — Maryland Live! — to bring another critical amenity to our large and growing county: a first-class conference center to house high school graduations and other large-scale public events.

We do not currently have a venue large enough to allow these types of large-scale events. Accordingly, the board of education and various other county departments have been forced to rent facilities outside Anne Arundel County at great cost to taxpayers, and our residents have to travel to Baltimore County or Prince George's County for these milestone events. It has been a longstanding goal of successive county governments to promote the development of such a facility. And it is certainly a priority for our administration to be able to conduct graduations and other large-scale events in the county.

Several years ago, an opportunity presented itself when we learned that Maryland Live! Casino was building a 1,500-person convention center. Working with Councilman Pete Smith, we approached Maryland Live! and asked their leadership team whether they would enter a public-private partnership with us and increase the size of their facility to 4,000 capacity to accommodate our graduation needs.

Maryland Live! Casino has been a terrific asset for Anne Arundel County since it opened, generating more than $18 million a year to support county services and local improvements. The funding generated from this one business is helping build sidewalks, improve roads, improve our schools and support public safety.

Initially, the county approved tax incremental financing for the convention center project, but that mechanism involves issuing bonds. It takes longer, and it is less efficient. House Bill 695, proposed by our administration and sponsored by 11 Anne Arundel delegates, will enable the county to develop a PILOT agreement. All that needs to be done is to negotiate a fee and terms of use that will be paid each year on the project instead of traditional property tax.

Since this legislation is enabling, we have not yet arrived at a final agreement as to the fee to be charged to Maryland Live! But we are committed to ensuring that taxpayers’ best interests are protected and that the transaction will proceed only if it makes financial sense for the county.

There are several benefits to this public-private partnership approach. This partnership will achieve our objective of having a graduation facility in the county, and it does so at far less cost than if the county were to build such a facility entirely on its own. Beyond graduations, a range of other governmental and local nonprofits and educational institutions will have access to this new facility. Also, a facility of this scale will attract private-sector convention businesses to the county from around the country for the first time and will fuel further economic growth in West County. And from a financial perspective, the PILOT structure means than our county will not have to issue bonds as part of its commitment to the project and instead can renegotiate the agreement in the future if need be.

We have been afforded a once-in-a-generation opportunity to create a first-class conference center for one of the most important moments in students’ lives with no construction or operational costs to the county. We hope the General Assembly will help us achieve that goal.


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