A political subdivision shall demonstrate in its application that an area meets all of the following requirements in order to receive the Secretary's designation of the area as a zone: That the area is located within a priority funding area; That the area is served by a public or community water and sewer system, or is planned to be served by a public or community water and sewer system under the approved 10-year water and sewer plan; That the area is designated by the political subdivision for mixed use development that includes residential uses as part of the mix of land uses; That, at the time of the filing of the application, the area has an average density of at least 3.5 units per acre, calculated in accordance with State Finance and Procurement Article, §5-7B-03, Annotated Code of Maryland, in that part of the area designated for residential use or development; and If a political subdivision is authorized under Tax-Property Article, §7-211.3, Annotated Code of Maryland, to enter into a PILOT agreement with a private developer for a federal enclave property, that the political subdivision has entered into good faith negotiations, in the judgment of the Secretary, for a PILOT agreement with all private developers of federal enclave property within the county. The Secretary may withhold designation of an area proposed to be designated as a zone until a political subdivision has entered into PILOT agreements with some or all private developers for federal enclave property within the county on terms satisfactory to the Secretary.