Michael H. Shuman is an economist, lawyer and author of “The Local Economy Solution.”
A tax revolt is erupting in the most unlikely of places: the People’s Republic of Takoma Park. Yes, that Takoma Park, the nation’s premiere nuclear-free zone where 16-year-olds can vote and Bernie-lovers roam free. The murmurings in coffee shops and angry comments at recent City Council meetings suggest a critical mass of residents may be getting ready to sue, unseat or even recall the mayor and City Council.
The spark is a project called Takoma Junction Redevelopment.
The city has been trying to figure out what to do with a 1.4-acre parcel of land it owns just east of downtown. For 20 years, the city has leased out a small portion to the neighborhood food co-op for a parking lot and delivery area but has left the rest undeveloped.
The city elders are convinced that more can be done with the land and for years have been engaged in visioning, hearing and reviewing proposals. The plan now on the table from an outside developer, the Neighborhood Development Corporation (NDC), is to build a huge structure with offices, retailers and underground parking.
Neighbors are fearful that the project would exacerbate existing problems of traffic, noise, smog and pedestrian safety. They also fret about chain retailers spoiling the local landscape. But they are most worried that their beloved food co-op, denied adequate parking and loading, might be thrown out of business.
The mayor and city council have poo-pooed skeptics as NIMBY Luddites standing in the way of progress. But the emergence of one new fact has inflamed the debate: The city would subsidize NDC. And this revelation coincides with the city’s leaders insisting that property taxes, already among the highest in Maryland, must be raised further.
Based on the co-op’s lease rate, the annual lease for the full lot would be about $158,000 per year. Over the first five years of its 99-year lease, NDC would pay $10,000 per year — less than half what the co-op is paying now for a tiny part of the land. That number slowly rises, but over the first 50 years, the city effectively would be underwriting $4.8 million of the project.
Confronted with facts such as these, smart politicians might step back and say, okay, maybe we erred. In an era of tight fiscal budgets, we should come up with a tenant or a project that addresses the concerns of the neighbors and pays its own way.
Instead, Takoma Park’s officials have retreated to dissembling. On April 5, an unsigned post on the city’s blog stated without evidence: “The City of Takoma Park is NOT providing a subsidy to NDC. The City of Takoma Park has NOT deeply discounted the lease rate for the property.”
This, of course, is as dishonest as Maryland’s legislators pretending that giving Amazon billions of dollars in “incentives” is about job-creation and not a corporate subsidy. No wonder residents are in open revolt. [The Post is owned by Jeffrey P. Bezos, chief executive and founder of Amazon.]
To give the skeptics their due, many favor development ideas that are more imaginative than a soulless office building. Maybe create a public market similar to Pike Place Market in Seattle. Or an affordable community land trust such as the Champlain Housing Trust with 600 homes in Burlington, Vt. Or a food-business incubator such as one that has operated successfully in Athens, Ohio. These projects all enjoy broad public support, generate substantial local benefits and pay full costs of land use.
The Takoma Park City Council is practicing economic development more or less the way it has been run coast to coast. Rather than grow businesses and wealth indigenously, public officials want to give big bucks to attract outside companies and developers while hiding the impact on taxpayers. That 250 cities in North America applied for the privilege of giving away the store to Amazon’s second headquarters shows that this form of economic development — denounced as counterproductive by almost every academic authority who has studied the practice — is alive and well everywhere. But perhaps not for long.
In 1978, California passed Proposition 13, putting state and local authorities on notice that annual property tax increases would no longer be tolerated. That revolt came from the right and swept the country.
What’s happening in Takoma Park, now led from the left, may portend the beginning of a similarly sweeping revolution. Politicians who insist on subsidizing private developers, denying the fiscal impacts and then sticking the bill to taxpayers do so at their peril.