Montgomery County Delegate Takes Aim at Country Club Tax Breaks

Del. David Moon wants to change law allowing reduced assessments for Montgomery County private golf clubs

Del. David Moon via State of Maryland website

If you look at an aerial map of Bethesda and Chevy Chase, three country clubs aren’t hard to point out.

There’s Burning Tree Club in the west. In the east are Columbia Country Club and Chevy Chase Club.

The country clubs are similarly sized. Burning Tree is about 200 acres, Chevy Chase Club is about 190 and Columbia Country Club is about 150 acres.

They’re all private and each charges membership initiation fees of $75,000 or more, according to news reports and publicly available information.

A Google Map showing country clubs in the Bethesda area including the Burning Tree, Columbia and Chevy Chase clubs

There’s also two major differences between Burning Tree and the two other clubs. Burning Tree doesn’t let women join. And Burning Tree pays about $150,000 more in property taxes to the county and state because it doesn’t qualify for a special country club agreement enshrined in Maryland law.

The agreement enables country clubs in the state that don’t restrict membership based on gender, race, nationality or religion to sign agreements with the state that result in their land being assessed at $1,000 per acre. The assessments let the clubs receive a significant reduction in their property tax payments to the county and state.

The tax exemption caught the eye of Del. David Moon (D-Takoma Park), who plans to introduce legislation in the 2018 General Assembly session to remove the tax break in Montgomery County. He said he’d consider trying to remove the exemption statewide, since several other country clubs in Maryland also use it to lower their property assessment values, but he isn’t sure he can generate support outside Montgomery County.

“There’s the potential that the county is missing out on a significant amount of revenue for these properties since land is quite valuable where we live,” Moon said in an interview Friday. “My hope would be we could just get rid of this [exemption] for private golf clubs in Montgomery County.”

Moon’s current version of the bill would require voters to approve proposed changes as a referendum. It would require amending the state constitution to let Montgomery County assess golf courses differently than the rest of the state does.

Moon said he wasn’t sure why the state passed the exemption, but believes the discrimination clause was added later to try to prevent private clubs in the state from restricting membership.

The New York Times reported the tax exemption was granted in 1965 as a way to encourage the preservation of open space in suburbs in a 1984 article about Burning Tree’s exemption being struck down by a Montgomery County Circuit Court judge.

Seventh State blogger Adam Pagnucco, who wrote about the tax exemption on his previous blog Maryland Politics Watch in 2010, said in an interview on Monday that Lakewood Country Club in Rockville would be a good example of how the exemption works.

In Maryland property assessment records, Lakewood’s primary 161-acre property was assessed at $1.9 million in 2015. Under an agreement the club signed with the state in July, the property would be assessed at $161,000, under the $1,000-per-acre formula used by the state. The lower assessment would reduce the club’s Montgomery County property tax bill by about $15,000.

The county could be missing out on significant revenue from the private clubs closer to the D.C. line, where real estate prices are more expensive.

If Burning Tree’s three primary properties, which total 207 acres, were assessed at $207,000 instead of the current $17.3 million, the county would lose out on about $170,000 in tax revenue per year.

Currently, Burning Tree pays about $260,000 in Montgomery property taxes on its primary club properties, according to county records. In comparison, Columbia Country Club pays about $90,000 in county property tax and Chevy Chase Club pays about $116,000 for its primary club properties.

All three Bethesda area clubs have clubhouses and other property improvements valued by the county between $8 million and $11 million, which makes up the vast majority of the cost of the Columbia and Chevy Chase Club tax bills.

A spreadsheet compiled by Bethesda Beat showing publicly available assessment values and property tax payments for Bethesda area country clubs

Bethesda Beat left voice-mail messages with the general managers at Columbia, Chevy Chase and Lakewood country clubs on Wednesday afternoon requesting comment about the proposed legislation, but none immediately responded.

Other country clubs in the county that have entered into agreements with the state to receive tax exemptions include Kenwood Country Club in Bethesda, Congressional Country Club in Bethesda, Argyle Country Club in Silver Spring, Manor Country Club in Rockville, Woodmont Country Club in Rockville, The Members Club at Four Streams in Poolesville, Montgomery Country Club in Laytonsville and Norbeck Country Club in Rockville, according to state property records and state agreements obtained by Pagnucco through a Maryland Public Information Act request. Pagnucco shared those documents with Bethesda Beat.

Moon said he doesn’t believe removing the exemption would cost the clubs so much in tax payments that it would harm their operations.

“Given the high dues and waiting lists at some of these clubs, it seems VERY unlikely that they couldn’t afford to pay the higher amount,” Moon wrote in an email.