The Bozzuto Development Company will not be able to proceed with the planned redevelopment of the College Park Quality Inn site unless it’s able to cover a gap in its financial projections.
The company is requesting a combined $10.5 million from Prince George’s County and College Park to allow the project to continue.
The Quality Inn is slated to close at the end of the month.
The new construction on the site will include 393 multifamily residential units, 67,000 square feet of retail space and additional parking. Developers plan for the retail space to be on the ground level with residential space above it. It will also extend Calvert Road west, to provide another connection between Guilford Drive and Route 1 and make the area more pedestrian-friendly and Metro-accessible.
Mayor Patrick Wojahn said the planned redevelopment of the Quality Inn site would be “transformative,” but the city still needs to analyze the proposed plan before it makes a decision.
“We’re looking at changing our downtown and changing the nature of our downtown and making it a more vibrant, year-round, exciting, walkable, bikeable commercial area,” Wojahn said.
[Read more: College Park Foundation and partners to redevelop southern entrance to city]
Under Bozzuto’s proposed plan, some of the funds for the project would come from tax revenue College Park earns from the site in the future.
The development would increase the tax revenue the city gets from the site from $46,000 to $362,000 per year. Under the proposal, the city would collect 25 percent of this increase, as well as the original $46,000. The remaining 75 percent would go to Bozzuto. This would continue for the first 15 years of occupancy at the new development.
“But for the reduction in taxes, we would not be able to proceed with the project,” said Bozzuto managing director Jeff Kayce.
The plan would reduce the project’s total cost so Bozzuto can attract the investors needed to complete it.
Bozzuto has also proposed a plan at the county level that would increase the market rate of return for the project, further helping attract investors.
Investors are looking for a market rate of return of 6.75 percent, she said, but without the county and city plans, the market rate of return would be less than 6 percent.
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The development company wants to confirm with the city before moving on to the county level.
Bozzuto is hoping for a response within the next several weeks, said Carlo Colella, the University of Maryland’s administration and finance vice president. The University of Maryland College Park Foundation owned the land before it was transferred to the Terrapin Development Company, which is leasing it to Bozzuto.
Colella is an “ex officio representative” of the foundation. With a commitment from the city and county, they can begin the process of construction as early as next summer, he said.
If the county and city need more time to analyze the proposed terms, Bozzuto will have to adjust their schedule. A complete lack of support would require “the character of the project itself” to be revisited, Colella said.
The $142 million project is “aspirational,” Colella said. College Park is currently a “reverse beach town,” Colella said — it’s very active during the spring and fall months, but during the summer and winter when students and faculty leave, local businesses suffer.
The city needs high-quality commercial areas that attract non-student residents for the city to have a year-round economy, Wojahn said. The new site is specifically for non-students such as young professionals and graduates, who would remain in College Park during the summer and winter. The retail would also attract year-round traffic.
