Columbia Association - Downtown Development

THE 2009 FINANCIAL ADVISORY COMMITTEE REPORT ON

PROJECTIONS FOR DOWNTOWN DEVELOPMENT

COMMITTEE MEMBERS Chair: James Howard, Long Reach Vice-Chair: Dan Woodruff, Dorsey's Search Roger Hultgren, Harper's Choice Alan Romack, Owen Brown

COLUMBIA, MARYLAND FEBRUARY 12, 2009

The 2008 Financial Advisory Committee February 12, 2009 Miles Coffman Chair, Planning and Strategy Committee Columbia Association, Inc. 10221 Wincopin Circle Columbia, Maryland 21044 Dear Mr. Coffman, Please accept the attached report from the 2008 Budget Committee on “Projections for Downtown Development.” As always, members of the Financial Advisory Committee are available for future consultation regarding this report or other matters the Board of Directors or the Planning and Strategy Committee require. The other committee members and I sincerely appreciate the opportunity to have served the Columbia Association and residents as members of the Financial Advisory Committee and on their behalf, I remain, Respectfully,

James P. Howard, II Chair, Financial Advisory Committee

Projections for Downtown Development

Charge The Columbia Association Board of Directors (Board) asked the Financial Advisory Committee (FAC) to review and analyze the CA Staff projections for incremental costs and income to CA related to the redevelopment of Downtown Columbia.

Recommendation The Financial Advisory Committee is unable to make a recommendation due to the complex economic environment and the few projections currently available.

1

Projections for Downtown Development

2

Background General Growth Properties (GGP) has proposed an extensive redesign and expansion of the Columbia Town Center. The current proposal includes an additional 5,500 housing units, approximately 3 million square feet of office space, and 750,000 square feet of retail over a 30year period. GGP is in the planning phase for this development and has not received approval from the Howard County government. The current financial conditions have also placed financial restrictions on GGP for now and the foreseeable future, potentially delaying this project, even if approval is granted. The CA Staff did not provide any projections for the FAC to review and analyze. However, the “Columbia Town Center Fiscal Impact Analysis” completed by the Howard County government in September 2006 was reviewed.1 The analysis provided led to several conclusions: 1. The timing of the development is critical to creating an appropriate financial model for projecting income and costs, particularly in the current economic environment. 2. The flow of the build out, at least during the first 5-10 years, needs to be better understood. HC used yearly averages for their calculations. 3. More input from GGP would be required to fill in key variables identified in 1 and 2 above.

Analysis Consistent with the charge, without an assessment by CA to evaluate, no review and analysis was possible. It is recommended that when CA performs their assessment that it includes three scenarios (pessimistic, most probable, and optimistic) for revenue and cost assumptions, including a separate capital segment to address CA infrastructure requirements. The Howard County data projected that in the first ten years approximately 460 new residents each year would be added to Town Center with a total of 10,800 over the total project lifetime (30 years). The CA should establish a standard as to when it is necessary to add new facilities or expand existing facilities to accommodate new residents. This would include pools, meeting areas, sports centers, green space, etc. These facilities are expensive and suffer from severe space constraints, and ought to planned for a decade or more in advance.

Recommendation The Financial Advisory Committee is unable to make a recommendation due to the complex economic environment and the few projections currently available.

1. Howard County Department of Planning and Zoning, “Columbia Town Center Fiscal Impact Analysis: Costs and Revenues Assumptions Document,” (Ellicott City, Maryland: Howard County, 2006). Howard County Department of Planning and Zoning, “Columbia Town Center Fiscal Impact Analysis: Fiscal Impact Results,” (Ellicott City, Maryland: Howard County, 2006).