Tax credits in Burtonsville/Briggs Chaney could encourage redevelopment, jobs

6/28/2017 Update: The Maryland Department of Commerce approved the Burtonsville/Briggs Chaney EZ application!

This spring, Montgomery County will submit an application to the Maryland Department of Commerce (MDOC) to establish an “Enterprise Zone” (EZ) in Burtonsville and Briggs Chaney.

A public hearing is scheduled tomorrow, Thursday March 16 6:30 pm at the Praisner Library (14910 Old Columbia Pike, Burtonsville, MD 20866).

The proposed EZ would encompass Burtonsville Town Square, Burtonsville Crossing, Briggs Chaney Marketplace, and other commercial properties along MD 198 in Burtonsville.

What is an Enterprise Zone?

The State of Maryland established the EZ program to encourage job creation, private investment and redevelopment in areas that meet certain poverty and unemployment criteria. In Montgomery County, businesses in a EZ designated area may receive the following four tax credits/exemptions:

Real Property Tax Credit: Eligible businesses may receive a 10 year property tax credit on real property expansions, renovations and capital improvements. The tax credit is 80% of the assessed value of the expansion, renovation or capital improvement for the first five years. In years 6-10, the tax credit decreases by 10% annually.

Income Tax Credit: Eligible businesses may receive a one-time $1,000 tax credit for each new job created and filled in the EZ area. Businesses may also receive a three-year income tax credit for each new “economically disadvantaged employee hired.” The credit for each new economically disadvantaged employee is $3,000 in the first year, $2,000 in the second year, and $1,000 in the third year.

County Impact Taxes:  Montgomery County charges both a transportation and school impact tax to help offset the cost of capital improvements in the county. Development in EZ areas are exempt from paying county impact taxes.

WSSC System Development Charge Waiver: WSSC charges new developments for the cost of new water and sewer service. Developments in EZ areas are exempt from paying up to $50,000 in WSSC system development charges.

In addition to these tax credits, the Montgomery County State Delegation passed a bill in 2013 that authorized the County to provide businesses in Burtonsville with personal property tax credits, which are typically reserved for focus areas like Baltimore City and Prince George’s County. Last year, the Montgomery County Council unanimously approved these personal property credits to help offset the cost of purchasing new machinery, inventory, and equipment needed to run a business in Burtonsville.

Are there other EZs in Montgomery County?

Currently, Olde Town (Gaithersburg), Glenmont, Long Branch-Takoma Park, and Wheaton are designated EZ areas. Downton Silver Spring was previously designated an EZ area from 1996 to 2006.

Last year, an Office of Legislative Oversight (OLO) report found that Silver Spring was one of the most successful EZs in the state, with over 1,375 jobs created and 85 businesses taking advantage of the incentives.

According to OLO, the Silver Spring EZ was so successful because it was “part of a multi-faceted revitalization effort” that “included large-scale investments in public facilities, streetscaping improvements, development of public spaces” and much more (p. 9).

In recent years, the County has taken a similar multi-faceted approach to revitalizing Burtonsville with facade improvements, bus rapid transit by 2020 and proposed development of the County Park & Ride Lot.

How will this affect the nearly-vacant Burtonsville Crossing Shopping Center?

The simple answer is that it depends on what EDENS (the property owner/developer) decides to do with the property. If they decide to do a large-scale, mixed-use development, then the property tax credits along with the impact tax and WSSC exemptions could make it easier for them to finance the project.

The EZ designation could also make it easier for them to attract new retailers who would benefit from the income tax credit for each new job they create. It’s important to note, however, that nearby Laurel, which is also an EZ, is also undergoing a large-scale redevelopment that they hope will compete with Tyson’s Corner. This gives Edens a narrow window to get this project off the ground, so hopefully the EZ will be the shot in the arm they need.

A copy of the draft Burtonsville/Briggs Chaney Enterprise Zone application can be viewed below.

Burtonsville Briggs Chaney Enterprise Zone Application.pdf

What can you do to get involved?

• Attend the Public Hearing on March 16, 2017, 6:30 PM at the Praisner Library, 14910 Old Columbia Pike, Burtonsville, MD 20866
• To sign up to testify, please contact Tina Benjamin by phone (240-777-2006) or email (tina.benjamin@montgomerycountymd.gov)

Burtonsville resident and County Council staffer Brian Anleu contributed much of the material for this post. Brian can be reached at  brian.anleu@montgomerycountymd.gov.