Developer requests the county reduce excise tax for project

April 21, 2006|by TARA REILLY


A developer proposing an apartment complex geared toward residents making $7 to $12 an hour told the Washington County Commissioners this week that the county's current building excise tax makes it nearly impossible to move forward with the project.

The county charges a $15,500 per unit excise tax on apartments. The tax on single-family homes is $13,000.

John J. Schuster Jr., of SIS Properties LLC, asked the commissioners to reduce the tax to $1 per square foot for the project, which he describes as a "work force housing" complex, according to information included with the county's agenda.

Schuster said the existing $15,500 per unit tax "about makes building anything affordable about impossible right out of the gate."

The proposal would reduce the excise tax paid on the project from $372,000 "to an amount consistent with tax imposed on small residential construction," according to the county agenda.


Some County Commissioners questioned whether exemptions or reductions to the excise tax for certain residential projects make sense for the county.

The apartment complex would be adjacent to Schuster's Greenside Apartments in Maugansville. It would offer discount rent on one- and two-bedroom apartments to families or individuals who meet income limitations.

Households earning at or below 50 percent of the median income would pay $450 a month for a one-bedroom unit and $550 a month for a two-bedroom unit in the proposed apartment complex.

Households at or below 40 percent of the median income would pay $330 a month for one-bedroom and $380 for two-bedroom apartments.

The median household income in the county is $47,050, according to the Hagerstown-Washington County Economic Development Commission.

Commissioners Vice President William J. Wivell said there are other one-bedroom apartments for $450 a month in the county, so why should the county make an exception for Schuster's.

"I'm wondering why we should subsidize yours when others are out there?" Wivell said.

"I don't think you can find a good apartment for $450 a month in the Hagerstown market," Schuster said.

Housing Authority of Washington County Executive Director Richard Willson, who also was at the meeting, said $450 a month would be a bargain.

Commissioner John C. Munson and Wivell said in interviews Monday that exemptions to the excise tax could end up being loopholes for developers to pay a lower tax.

If granted, they said developers would pay reduced taxes yet make profits on their developments.

Munson repeated those concerns Tuesday, saying maybe it would be best for the county not to grant exemptions.

Commissioner James F. Kercheval said Tuesday he wanted to "crunch some numbers" regarding the project.

Commissioners President Gregory I. Snook said the commissioners needed time to think about the request before voting.

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