By Sandhya Somashekhar
Washington Post Staff Writer
Sunday, July 16, 2006; A01
In the frenzy to build subdivisions in Northern Virginia's exurbs, one of the nation's largest housing developers has offered to write the small Fauquier County town of Warrenton a $22 million check, an unprecedented cash donation, according to Virginia real estate specialists.
In exchange, Centex Homes of Dallas would get permission from county and town leaders to build a subdivision just outside Warrenton with nearly 300 luxury homes for seniors, starting at $850,000.
The $22 million -- almost half of Warrenton's annual budget -- would pay off the debt on a new swimming pool complex in the town of 8,000 people. Town and county leaders gave their initial approval last week to Centex's proposal, which involves asking Warrenton to annex property so the builder can connect to the town's sewer system.
George B. Fitch, the mayor of Warrenton, which sits about 40 miles west of the District, hailed the tentative agreement as a major victory for the town and for other communities seeking to have some control over the rapid pace of development.
"I think we're finally coming to a place where growth is sustaining growth," Fitch said, explaining that housing developers seem increasingly willing to pitch in to compensate for the stress on infrastructure caused by new residents. Centex's contribution would amount to nearly $74,000 per unit, more than double what Fauquier County usually receives from a developer.
But development specialists say the unusually large promise of cash highlights a disturbing trend in Virginia's booming housing market. Developers eager to plant new homes in exurban locales are building roads, establishing parks and offering money -- all in an effort to appease increasingly resistant communities. The result, the specialists say, is more expensive homes.
In Loudoun County, the developer Greenvest has offered to spend $192 million on road improvements in exchange for permission to build 15,000 homes near Dulles International Airport. Toll Brothers, another developer, plans to contribute 233 acres of parkland to Prince William County so it will rezone rural land to build 420 houses near Silver Lake.
The Warrenton deal and agreements like it amount to bribes, said John McIlwain, senior resident fellow for housing at the Urban Land Institute, a Washington-based nonprofit research and education organization for the development industry.
"Facilitating the process is a nice way of saying it," McIlwain said. "Centex saved themselves two or three years of controversial negotiations trying to get approval, and that's worth a lot of money in itself."
In Fairfax County and other jurisdictions, developers traditionally have offered land or money to offset the cost of building schools, roads or libraries to accommodate the additional residents that new homes bring. In Maryland, those impact fees are required by state law, but in Virginia, local governments negotiate what are known as "proffers" to cover that cost.
The proffer by Centex is unusual in that the vast majority of the money isn't needed to support roads or schools for the development. Because the new residents will primarily be senior citizens, officials say that the impact on schools will be minimal and that they won't have to increase school capacity.
The subdivision would be built off main thoroughfares, which they say will require few road improvements. Additionally, Centex has agreed to pay for sewer improvements, though the company is still studying what improvements might be necessary.
The promise of payment is not a bribe, said John Foote, an attorney for Centex. It is simply the "price of doing business" in a state with such complex and unusual land-use policies as Virginia, he said.
"One thing developers always hear is they're not paying their fair share," said Foote, a veteran Northern Virginia land-use lawyer who said the cash contribution is by far the largest per lot that he has seen. "Well, in this case Centex is paying substantially more than their fair share."
Centex has acquiesced to other demands that Foote said are in some ways more significant than the $22 million offer. The current agreement reflects a compromise in the company's initial plan to build more than 600 homes for families as well as seniors, he said. The 298 luxury homes would be clustered on 25 percent of a 492-acre parcel known as Arrington farm, he said, with the remaining area to stay largely undeveloped.
The company also has agreed to allow officials to have a say in the subdivision's design to ensure that it is consistent with the town's architecture, Fitch said. And it will be constructed below the ridgeline, maintaining the rural panorama seen when driving into town, he said.
Slow-growth advocates in Fauquier are closely watching the project, which they say appears at this early stage to be reasonable regardless of the cash promise.
"I won't say it's perfect, but it's certainly a step in the right direction," said Jolly de Give, county field officer for the Piedmont Environmental Council. "What this tells you is how phenomenally profitable development is at the moment. Not to be cynical, but they're not giving till it hurts. They're giving so they can make a profit."
And in the end, it will be the homeowners who pay the price, said McIlwain, who added that it is these kinds of agreements that drive home prices skyward and suburban sprawl farther and farther into rural Virginia.
"Probably the people who are getting hurt aren't even in the conversation, because they are moderate-income seniors who might have been able to afford moderately priced senior housing," he said.
Though the project is still at the early stages of design, the town and the county passed resolutions last week in support of the proposal. Centex has asked Warrenton to annex part of the Arrington farm property from the county to allow it to hook up to the town's sewer system. If the project goes forward as expected, the property would be transferred to Warrenton upon final approval later this year with virtually no strings attached.
