Howard County could net $13.4M from new downtown 

Posted: 7:42 pm Tue, November 3, 2009
By Robbie Whelan
Daily Record Business Writer

General Growth Properties’ ambitious plan to remake downtown Columbia has moved forward, with the introduction of two bills outlining the plan and zoning changes that the Howard County Council has three months to amend, discuss and finally choose to accept or reject.

At a council meeting this week, Jeff Bronow, chief of research for the county’s planning department, presented a detailed analysis of the projected fiscal impact of the project, which his office expects to produce between $6.9 million and $13.4 million in average net revenues for the county each year.

The numbers are based on eight different general scenarios describing what form the GGP plan might take, based on the percentage of affordable housing included in the plan and the number of children added to the county’s school system, a figure known as student generation yield. General Growth, which entered Chapter 11 bankruptcy this year, hopes to build over the next three decades 5,500 residential units, millions of square feet of offices, shops and hotel rooms and acres of green space in Columbia’s town center.

The residential portion of the plan, Bronow said, is geared heavily toward smaller apartment and condominium units with two or three bedrooms — the kind that generally attract singles or young couples who do not have children. A high-density project with these types of units will typically produce a low student generation yield of less than one child per household.

“If they were building all single-family detached homes downtown, first of all, obviously it wouldn’t fit downtown,” Bronow said. “It’s a high-density and mixed-use project. It’s a smart growth project. Generally, high-density, mixed-use projects are fiscally better than low-density projects. … The trends are that you are getting a lot of younger singles moving into these kinds of communities. They’re moving back to Baltimore City and Washington, D.C.”

Another contributing factor to the planning department’s rosy revenue projections for the project is that commercial real estate space built by GGP is expected to be worth an average of $221 per square foot, or more than twice the current price of commercial real estate in Howard County.

These projections were based on a comparative analysis with nearby town center projects in Reston, Va., and Annapolis, both of which feature luxury housing options. The Columbia plan involves different options for affordable housing, including making up to 15 percent of the new housing stock affordable to people with moderate income levels.

County Council member Courtney Watson said the best-case scenario revenue projections were promising, but said she was “not sure” if these comparisons would actually represent the reality of commercial property assessments in the county. If property values do not reach the levels GGP anticipates, revenue for the county could drop: The low-end estimates provided by Bronow’s office were just under $7 million.

“It’s one of the assumptions that we’ll be looking at and we’re hoping to get an independent opinion on it,” she said. “It’s really hard to tell. … They used neighboring jurisdictions to come up with those market values. The question is, if we don’t hit those market values, what happens? The margin concerns me a little bit; $7 million, I think that’s a little thin.”

Richard W. Story, CEO of the Howard County Economic Development Authority, said he was “totally confident” that the plan would produce significant revenues for the county.

Two weeks ago, his agency presented a report from a third-party consultant that estimated the total construction impact of the Downtown Columbia projects at $4.8 billion, with a gross annual revenue stream for the county of about $47.5 million.

And officials from GGP, including regional Vice President Gregory F. Hamm, also expressed confidence.

“If you look at Woodlands in Houston, look at Reston Town Center. Those are the two best examples because you have all four product types working,” he said, referring to retail, office, residential and hotel space. “When that dynamic is created, there is a significant improvement and premium in real estate values across the board, because you’ve created a desirable urban setting that’s very difficult to replicate.”