Gambrills shopping center close to breaking ground

Developers of a $300 million shopping center in Gambrills said they could be just months away from finally breaking ground on the massive project that has been years in the making.

But the developers may have run into an obstacle with nearby residents because they are asking the county to approve a $16 million tax-increment financing plan to be able to pay for the necessary infrastructure improvements. Those plans include capping off, literally and figuratively, a troublesome fly-ash landfill in that area.

The 1-million-square-foot mixed-used Village South at Waugh Chapel is designed to include the upscale grocery market Wegman's and a Target, among numerous other retailers, restaurants, office space and residential units.

A movie theater that had originally been slated for the project appears to have fallen through because it was not able to obtain its own financing, officials said.

There also has been discussion of building a new youth recreation center inside Village South.

Some Crofton-area residents are trying to mount a campaign to oppose the financing plan, commonly known as a TIF. A TIF is an agreement between the county and the developers for the county to sell a bond on the private market and allow the developer to pay off the bond with a portion of the tax dollars generated from the improvements made to the site.

The rest of the tax money goes to the county. The county does not provide any money to the company and is not held liable for the bonds. A resolution initiating the process to create the TIF agreement will have a public hearing in front of the County Council tomorrow night.Officials with Owings Mills-based Greenberg Gibbons Commercial, the developers of Village South as well as the Annapolis Towne Centre at Parole and the Kent Towne Market, said they have all the necessary permits to build Village South and are ready to start construction in March.

If all goes according to plan, work can be completed in 2012, chief executive officer Brian Gibbons said Friday. The project also would generate at least $13 million in one-time fees to the county for inspection and permit costs outside the TIF deal, Gibbons said.

The main financing remains the only question mark. As the local and national economies continue to struggle, finding venture capital companies to invest in the project has been difficult, Gibbons said.

"I have the permits," Gibbons said. "Now all I need is money. It used to never be a roadblock, but it is now."

He said this is the first time his company has requested a TIF, and that includes the Annapolis Towne Centre project. He also said his investment partner of the past eights years isn't doing any commercial projects now because of the economy.

"Commercial real estate is viewed right now as extremely risky," Gibbons said. "When we first started, the financing climate was a lot different."

The developers are hoping the county approves the 30-year TIF agreement to help pay for water, sewer and road improvements around the shopping center, improvements that the county will own.

TIF agreements

Under a TIF agreement, the county would pay for the infrastructure construction. Taxes generated from the center would be used to pay back the investors who purchase the bond. If the project fails, those investors are out money.

As the project pays back the investors, it also starts paying taxes to the county, revenue that it otherwise would not be receiving.

When built-out, Village South is expected to generate nearly $115 million in tax revenue for the county on the life of the bonds, officials said. Gibbons said the project would create more than 2,900 temporary construction jobs for local companies and more than 2,600 permanent jobs.

Similar TIF agreements were set up for the National Business Park in Annapolis Junction and Arundel Mills mall in Hanover. Those projects are generating significant revenue for the county, according to county budget director John Hammond.

However, Crofton-area residents weren't swayed by the agreement's potential economic benefits.

"We're in a tax-strapped county," said Madonna Brennan, a member of both Crofton First and the Greater Crofton Council. "School repairs are on hold, people are being furloughed. Nobody has money right now."

Brennan said area residents are excited about having a Wegman's, but taxpayers shouldn't pay for something that developers should pay for.

'A mixed bag'

Earlier this month, Hammond and west county Councilman Jamie Benoit outlined the TIF plan for area residents.

Benoit, who sponsored the TIF resolution, said some of the opposition to the plan might be pre-emptive and based on misinformation.

But he said the developers may have a tough time getting enough support to pass the TIF agreement.

"It's a mixed bag," said Benoit, D-Crownsville.

The board of directors for Crofton First released a statement Thursday opposing the use of the tax-increment financing.

"There are currently numerous commercial developments on Route 3 that are not at 100 percent capacity," they said in the statement. "Having taxpayers front the bill for the Waugh Chapel South does not seem like a viable answer to a developer's problem."

Members of the Greater Crofton Council also voted against supporting the TIF agreement for Village South, which is slated to be built along Route 3 across from the 10-year-old Village at Waugh Chapel shopping center.

There are currently no appeals filed against a proposal for a TIF agreement associated with an expansion of the National Business Park, which also is expected to be introduced at tomorrow's council meeting.