County approves special financing for Swan Point

Friday, March 28, 2008

Under the tax incremental financing, agreement, the county will issue $26 million in public bonds to fund the project’s infrastructure. The debt service for those bonds would be repaid using a portion of the new taxes generated by the increased property value that would result from the project’s improvements on the land.

County staff said there is no risk to the county, since the county also passed a backup special taxing district that would demand a higher tax rate on the commercial sections of Swan Point in the event the hotel fails to generate sufficient tax revenue to pay the bonds.

The county’s financial adviser, Sam Ketterman, stated that there would be ‘‘no adverse reaction from the [bond] marketplace” if the county issued the TIF bonds.

County Fiscal Services Director Debra Hudson projected that the county stands to gain $389 million in new taxes over the 30-year life of the bonds.

During two public hearings, proponents of the TIF, including several residents of Swan Point, claimed the plan would bring more money to county coffers, bring amenities long promised for the decades-old development, repair shoreline erosion, provide local jobs and supply construction work for local firms in this sluggish economy.

Opponents claimed the development would be an ecological nightmare for local waterways, increasing stormwater runoff and sewage discharge.

They further claimed that the TIF was a financial boondoggle, pointing to the fact that four banks had declined to fund the project.

Some opponents claimed that Swan Point residents, as compulsory members of the Swan Point Country Club, would end up paying for the bonds through their club dues if the hotel fails.

However, according to county staff on Tuesday, Swan Point developer U.S. Steel is working with residents to change the club’s bylaws and create a ‘‘firewall” between club fees and any monetary demands of the special taxing district, should the hotel falter.

The county commissioners took turns making motions to adopt the three TIF component resolutions which establish an economic development area, establish a special taxing district and issue TIF bonds. When it came to Commissioner Samuel N. Graves Jr. (D) to introduce the TIF bonds, he first took a moment to scold U.S. Steel.

‘‘I’m a little disappointed in their lack of stewardship of that shoreline,” Graves said, calling for the developer to take measures to protect Swan Point’s entire eroding coast.

jfriess@somdnews.com