2021 | Government

Council pledges to override Elrich’s veto of Silver Spring business district bill

Jawando was only opponent when council passed bill last month

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The boundaries of the Silver Spring Business Improvement District.

Montgomery County Government

County Council members said Monday they plan to override a veto by County Executive Marc Elrich to create a business improvement district for downtown Silver Spring.

Elrich sent a letter to the County Council on Monday outlining his objections to the proposal.

The council passed it 7-1 last month, with Council Member Will Jawando opposed and Council Member Nancy Navarro absent. 

The proposed business improvement district, or BID, aims to better the business climate and marketing in downtown Silver Spring by replacing some of the marketing and promotion responsibilities of the Silver Spring Urban District. A board of directors would oversee the district.

There are several BIDs throughout the Washington, D.C., region, including 11 in the nation’s capital. 

Silver Spring’s urban district is one of three in the county. The others are in Wheaton and Bethesda.

The county funds these districts through a tax assessed on properties in densely populated, unincorporated areas. Those taxes help maintain streetscaping, provide public amenities and promote the arts, culture and overall programming in those areas.

Elrich opposed the BID for four central reasons, according to the letter:

  • It doesn’t meet the county’s goals for racial equity and social justice
  • Most of the costs would be paid by small businesses
  • Silver Spring could follow a proven model by creating an urban district corporation. The Bethesda Urban Partnership is an example.
  • The council lacked transparency and rushed to a final vote before its summer recess

“Bill 3-21 is the wrong option for Silver Spring. The BID, which would be financed by a mandatory tax on all businesses, is structured to give power to property owners with the largest and most expensive property,” Elrich wrote.

Per state law, property owners who own at least 51% of the assessed value of all properties within a proposed BID must submit a petition to the County Council. Some property owners are known as applicants.

Some of the applicants on the Silver Spring BID are Foulger-Pratt, a real estate firm; Peterson Companies, a real estate developer; and United Therapeutics, a biotech company, according to council staff documents.

The BID board of directors would set a tax rate to fund operations. Council members have oversight of that board and the BID. 

According to the legislation, the board of directors would be:

  • Three representatives of owners of properties in the district assessed at more than $20 million
  • Two representatives of owners of properties in the district assessed at $20 million or less
  • One representative of a business employing more than 50 full-time equivalent employees in the district
  • Three representatives of businesses employing 50 or less full-time equivalent employees in the district
  • That board would decide on a tax rate for the district and how money should be used for marketing, promotions and more.

Elrich and opponents of the BID believe this structure would give too much latitude to bigger business owners in downtown Silver Spring.

But supporters, including seven County Council members, say the BID is needed to encourage economic development and prevent further small business and job losses.

Every Council member but Jawando and Evan Glass signed on to a statement Monday evening declaring they would override Elrich’s veto once the council reconvenes in September. 

“We are committed to this process and believe that the business improvement district model, which has been successful in neighboring jurisdictions, will build upon Silver Spring’s many strengths and focus renewed energy on marketing and promotions to support local businesses,” the seven council members wrote in a prepared statement. 

Navarro, who missed the final vote but signed on to that statement, and Glass who voted for the bill despite some reservations, but did not sign on to that statement — could not immediately be reached for comment via phone call or text message on Tuesday.

The council needs six votes to override, and has 60 days after a veto to act, according to the county charter. 

The veto override would be the third one during Elrich’s time as county executive.

Erich’s first veto was for legislation that gave incentives to developers building high-rise buildings on top of Metro stations. The council overrode that in October 2020 by a 7-2 margin.

His second veto was for a bill that would decrease impact-tax revenue from developments, and was attached to the county’s 2020-2024 growth and infrastructure policy — formerly known as the subdivision staging policy. The council overrode that 9-0 in December.

Steve Bohnel can be reached at steve.bohnel@bethesdamagazine.com