Tax Increment Financing for South Lake
Under a Tax Increment Financing (TIF) Policy adopted by the City Council in 2015, the City can, in certain rare situations, provide financial incentives to the developer a future development to help make the project more feasible.
The South Lake development is not currently within the municipal limits of Bowie, but in 2016 City Council entered into an annexation agreement with Karington LLC (developer of South Lake). That agreement is contingent upon the City Council approving a TIF.
The developer is planning a multi-use development. In addition to the future tax revenues, such use is expected to provide new services, additional employment opportunities, more housing options, and a grocery store and other retail opportunities for the southern part of the City. Council is required to consider these types of elements when evaluating a TIF application according to the TIF policy it adopted in 2015.
Karington LLC has filed an application for Tax Increment Financing with the City. At the September 17, 2018 meeting, Council was briefed on the application and on the review process that Council will follow.
Discussion of the Tax Increment Financing Application will continue at the October 1, 2018 City Council Meeting.
Karington LLC has filed a similar application for Tax Increment Financing with Prince George's County and has indicated that both approvals are necessary in order for the project to move forward.
October 1 City Council Meeting
There are two items on the agenda related to the proposed South Lake (Karington) development:
- South Lake Tax Increment Financing Application Presentation and Public Hearing
Karington LLC is requesting that Prince George’s County provide approximately $27.5 million financing in the form of tax increment financing (TIF) bonds to be paid for by increased revenues received by both the County and the City from the projected development.
Staff and advisors will provide a report and analysis of the TIF application. The public may comment on the application during the public hearing, however City Council will not take action on the application at this meeting.
- South Lake (Karington) Introduction of TIF Resolution
Staff will introduce Resolution R-64-18 expressing the City’s intent to approve the tax increment financing development district created by the County for the South Lake project.
This resolution is needed to further advance the annexation of the land area that encompasses the South lake project and is derived from terms of the 2016 annexation agreement. The resolution is being introduced at this meeting. It will not be eligible for action that evening.
R-64-18 and Supporting Documents
The South Lake Tax Increment Financing Application is a long-term financing plan. In the early years, City expenses will exceed real estate tax revenue, but over time, as the debt is retired, revenues will increase and will eventually net the City more than $50 million in new property tax revenue over the next 30 years.