Bill Would Shield Va. Developers From Proffers Upfront

The bill surprised Prince William's Connaughton.

Some Virginia builders have long believed that the fees they pay localities to offset the costs of new roads, schools and other services needed for new development are unfair. But they've learned to accept them as the cost of doing business.

Local governments depend upon the fees -- called proffers -- to cover at least some of the added costs that come with burgeoning development and new residents.

But when Prince William County abandoned the tradition of requiring developers to pony up only after a subdivision had been built and asked for cash proffers upfront, the industry decided that enough was enough.

"We want to nip this in the bud," said Michael Toalson, executive vice president of the Homebuilders Association of Virginia. "You know the trend mentality. When one changes its policies, others follow the trend," he added.

With the help of Del. Terrie L. Suit (R-Virginia Beach), Toalson said his organization is hoping to halt any trend. Suit has introduced a bill in the General Assembly that would prohibit localities from collecting proffers upfront. The bill is now in committee.

Aimed at Prince William, the bill would affect all communities, and it is of concern to many officials in Northern Virginia, where some suburban governments are looking to developers for more help in meeting the rising expense of building schools, firehouses and roads for droves of new residents.

Proffers in Prince William have increased to $22,986 for a single-family home in 2004 from $9,810 in 2000.

Suit, a mortgage lender, said collecting the proffers upfront is unfair to developers, who must find the money before completing a house, much less selling it.

"The issue is a cash flow issue . . . if the developer doesn't have the money and doesn't have the product," she said.

Prince William board Chairman Sean T. Connaughton (R-At Large) said the county has mostly collected transportation proffers earlier to get a head start on building roads. Traffic has been the main complaint of residents as thousands of homes continue to be built in Prince William, one of Virginia's fastest-growing counties.

The county recently applied the policy to Bristow Station, a development of more than 500 homes just off Route 28. The developer provided about $1.4 million in advance to make area road improvements, said Nimet Soliman, the county's deputy planning director.

The bill, if passed, would also end Prince William's new practice of using the steeply rising costs of building materials and road construction to calculate the amount of a proffer between the time it is offered and the time it is paid. The bill would limit such increases to the annual rate of inflation.

But that won't keep up with construction costs, said Dana Fenton, Prince William's lobbyist in Richmond. "If you use [the consumer price index], you're measuring the costs of food. We're not buying food," he said.

Fenton said several growth control groups are lobbying against the bill, including the Virginia Coalition of High-Growth Communities, a group of two dozen localities.