Residents argued in recent months that they were being unfairly targeted. They said they were unaware that they bought homes in a potential special tax district.
City officials had proposed two special tax districts in the 295-acre Potomac Yard — 10 cents or 20 cents per $100 of assessed value on a property tax bill — that would supplement developer contributions and tax increment financing to cover the cost of the $240 million Metro station and its debt service, totaling an estimated $496.6 million.
The first district, with a 20-cent tax, begins at Four Mile Run and ends roughly at Swann Avenue. The second district, with a 10-cent tax, picks up at Swann Road and ends just before Slaters Lane. Property owners and new construction are subject to the additional taxes.
“There is a real question of fairness,” said Mark Jinks, Alexandria’s deputy city manager.
The residents say they did not know about the possible district despite the information being included in their real estate closing documents, Jinks said. He also said that their homes, which on average cost $800,000, would appreciate in value and generate higher real estate property tax bills for the city.
The 20-cent tax is in place and expected to generate about $500,000 in revenue this year, Jinks said. The second-tier, 10-cent tax would begin in 2017, when the Metro station opens. The Potomac Greens neighborhood would have generated about $200,000 that the city must replace, he said. That money could be found in project cost savings or city, state or federal funding.
“We’ve got six years to find it,” Jinks said. “In the grand scheme of things, it is a fairly small amount of money.”
The special tax districts need to raise about $20 million at the peak of repaying the debt service if the station is built, he said.
“I felt that it was inappropriate to have any existing properties in the City of Alexandria placed into a special tax district,” said Frank H. Fannon IV (R), who reiterated that the failed commercial add-on tax to support transportation was another form of special tax district.
Fannon said it will be clear to potential Potomac Yard real estate buyers that if they purchase the property, they will be subject to this special tax.
“All of the information indicates that Potomac Greens should not be a part of a special tax,” said Mark Anderson, a spokesman for Citizens for Common Cents, which opposed the measure. “We are happy the council is listening to constituents and Alexandria residents as well.”
Anderson said there is still time before the June 25 public hearing for the council members to change their minds and that his organization will watch the council’s actions closely. There is still a possibility that the Metro station will not be built, Anderson said.
“We still don’t know what could happen in the process between now and three years from now,” when the environmental studies are completed, he said.