The New Cultural Center: Clearing up Misconceptions (Part 1)

Note: This month, the Howard County Council will likely be deciding the fate of the New Cultural Center. This is the first in a series of posts addressing some of the common arguments and misconceptions that I have heard opposing the project. This series marks a temporary departure from my typical news-focused blogs and analysis. It should be no secret that I am a supporter of developing a vibrant Downtown Columbia, and I believe the NCC should be a prominent part of our redevelopment for a myriad of reasons. This series leans a bit further into my own point of view and opinion than you may be used to from this blog, but it still comes from a heavily-researched and informed perspective. I encourage dialogue in agreement with or opposed to my ideas in the comments on my website or social media posts.

Part 1: Why don’t we do something other than the New Cultural Center in Downtown Columbia? Or, why don’t we use a different mechanism to bring affordable housing to our developing urban core?

Our community spent many years – between 2014 and 2017- debating, litigating, politicizing, organizing, advocating, lobbying, and negotiating a plan for securing and financing affordable housing in Downtown Columbia. Ultimately, a compromise was reached that included the best aspects of multiple proposals. This plan - the 2016 Development Rights and Responsibilities Agreement passed the County Council by a 4-1 vote. It combines mixed-income housing and community amenities across four buildings in Downtown Columbia (cultural center, library, firehouse, and transit center)– and utilizes low-income housing tax credits as the financing vehicle. Incidentally, LIHTC’s are the primary financing mechanism for affordable housing nationwide and were authorized, in part, by James Rouse. For all the nitty-gritty details on how this agreement came to be, the comparisons points between the various proposals put forward, and why the final plan was the best of the available options, see this 2016 Downtown Affordable Housing memo from the late Jane Dembner, who was CA’s Director of Planning and Community Affairs. In it, she explains why the final plan provides the most affordable units with the most amount of certainty.

With this agreement in place, the county went about executing the plan starting with the New Cultural Center. This included (1) structuring the NCC deal so that the project could be financially self-sufficient, (2) designing the building, (3) finding and negotiating terms with the tenant, but most importantly, (4) winning $63 million in LIHTCs through a highly-competitive process that provided the key financial piece for funding the NCC’s housing. This tax credit requires occupancy of these affordable housing units by the end of 2024, so construction needs to begin in short order to meet this target.

Now, the current County Council is responsible for the final sign-off of the New Cultural Center by approving the issuance of $54.6 million in general obligation bonds to finance it’s construction. Once built, it is projected that the debt payments on these bonds will be serviced entirely by revenue that the New Cultural Center directly or indirectly generates for the county – lease payments from the building’s tenants and downtown tax incremental revenues. The Council’s decision is whether or not to fund the NCC deal as currently constructed. The Council’s decision is not about the Downtown Columbia plan or the best mechanism for adding affordable housing in Downtown Columbia. These decisions have already been made. If the Council approves the project now, construction can begin on schedule. Failing to do so will mean abandoning the tax credits that the county has already won and jeopardize our ability to win subsequent tax credits.

As this Council considers its sign-off, I believe it is important for Councilmembers to be good stewards of our taxpayer dollars by ensuring reasonable strategies are employed to minimize the County’s risk exposure, and I am glad to see that Councilmembers Deb Jung and David Yungmann have lead these discussions. I suspect their work will ultimately lead to improvements in the plan to the benefit of the County. A future post in this series will consider these risks and the ways to minimize them.

On the contrary, much of the online discourse about the project that I have read is a relitigation of the 2016 affordable housing agreement or suggestions to change significant components of the Downtown Columbia plan. It cannot be emphasized enough that doing either of these things means throwing out all the hard work done to date, walking away from $63 million, and jeopardizing our chances of winning subsequent tax credits for the remaining projects in the plan. If this project is not approved, we would essentially be starting significant portions of the Downtown Columbia redevelopment plan over from scratch. Simply put, if we, as a county, truly want to commit to building a vibrant walkable urban downtown - one that can an economic engine for our County’s future and be the home for people of all income levels - then the New Cultural Center should be a central part of that plan.