The Montgomery County Council voted to move forward with a deal between the county and developer JBG to build a in Bethesda as a public/private partnership Tuesday afternoon. But the deal will cost the county $750,000 less after questions posed by Councilman George Leventhal (D-At Large) and Councilman Marc Elrich (D-At Large) prompted another look at the numbers.
The office of County Executive Isiah Leggett (D) and JBG have been negotiating since 2008 on a deal that would allow the county to save some money on the construction of the new police station. The plan is for JBG to build a new Second District police station on Cordell Avenue between Woodmont and Wisconsin Avenues, and it could be part of a larger, residential development with up to 400 housing units – 70 or 80 of which would be moderately priced. The county would give the developer the site where the is located – a high-traffic location at the corner of Montgomery Lane and Wisconsin Avenue across the street from the Bethesda Metro station.
The current station, built in 1961, is in desperate need of repair, according to information in a council committee packet. There have been problems with the HVAC systems and mold growing in the locker rooms, according to the packet. And with constrained parking at the site, most of the staff and public parking is only available in a public lot across the street, and there have been problems with vandalism to police cars parked there.
At a May 6 meeting of the council’s public safety committee, JBG chief development officer Ken Finkelstein said that the deal hinged on a zoning text amendment proposed just days before by Leggett that would allow for developers to be offered more density for building publicly owned or operated government facilities as part of their projects, subject to approval by the Maryland-National Capital Park and Planning Commission.
In the same session, Elrich questioned whether the county ought to be getting something in return for the additional density that would be afforded to JBG by the zoning text amendment, if passed. “If that wasn’t part of what got them the winning bid, then this has a value and we ought to get a piece of that value,” Elrich said at the session. “…I’m just saying, ‘Is there a better deal to be had?’ I just want to be sure we’re not giving away something we didn’t have to give away.”
Leventhal also asked for more details on the deal when the proposal went before the full council last week, prompting a delay of the vote.
Then, in a May 16 memo to the council, county assistant chief administrative officer Diane Schwartz Jones wrote that staff had uncovered additional savings for the county. “Following up on questions raised by Mr. Elrich and Mr. Leventhal, executive staff reviewed land values and assumptions with JBG Associates and determined that there was $750,000 of cost in the project that should be borne by the developer rather than the county,” Schwartz Jones wrote.
The cost of the police station is estimated at $21.8 million, of which the county was initially expected to provide $10 million -- $8 million to JBG, and $2 million to the county’s Department of General Services for furniture, fixtures and oversight costs, Schwartz Jones said. JBG would also be receiving $8.7 million in the value of the land on which the current police station sits, where they plan to build offices.
Subtracting the county’s $10 million contribution and the $8.7 million in the current police station’s land value from the total cost of the $21.8 million cost of the new station, JBG would have been left with an additional balance of $3.1 million to cover. However, after the councilmembers requested another look at the numbers, executive staff said that JBG would be realizing $3.85 million in density value on the new site, including the value of the additional density that could be afforded by the zoning text amendment, tipping the scales $750,000 in JBG’s favor, Schwartz Jones said.
As a result, the county will reduce the payment to JBG from $8 million to $7.25 million. “We think this puts the agreement on par,” Schwartz Jones said at the hearing.
Elrich, however, raised concerns about the process of soliciting bids for the project, wondering whether it should have been more transparent from the beginning that a zoning text amendment could afford the bidding developers more density. He called the ZTA a “red-eyed Eskimo,” proposed to benefit the police station project.
Schwartz Jones countered that JBG had made it clear from the beginning a zoning text amendment would be beneficial to the project and said the ZTA would incentivize other developers to take on public projects.
Councilwoman Nancy Floreen (D-At Large) pressed for assurance that the project would be completed on time – slated for fiscal year 2016 – and wouldn’t be delayed by JBG due to housing market or economic concerns. Budget officials responded that the county’s agreement with JBG made it clear the developer is required to complete the police station first before moving on with the residential component of the project.
Councilmembers also praised the mixed-use project as a way to bring economic revitalization to the Woodmont Triangle area and provide a Bethesda Row-style pedestrian connection between Wisconsin and Woodmont.
“The new Second District Police Station at the corner of Wisconsin Avenue and Cordell Avenue will be part of a larger, mixed-used development project that will occupy a large block bounded by Wisconsin and Woodmont Avenues,” Schwartz-Jones’ memo read. “JBG’s mixed-use plan calls for a pedestrian shopping plaza bisecting this long city block with street level retail on both sides. This urban pedestrian way creates a welcoming connection between Wisconsin and Woodmont Avenues and is planned to be lined on both sides with stores and restaurants where shoppers are free from traffic and interruption.”
The project plans must be approved by the Maryland-National Capital Park and Planning Commission.