Economy Slows Establishment of Special Tax District in Fairfax County

Construction of Metro's extension to Dulles airport proceeds in August in the median strip of the Dulles access road
Construction of Metro's extension to Dulles airport proceeds in August in the median strip of the Dulles access road (By Bill O'leary -- The Washington Post)
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By Derek Kravitz
Washington Post Staff Writer
Thursday, October 8, 2009

A less-than-stellar economic climate is delaying the creation of a special tax district in Fairfax County, officials say, a move needed to pay for the second part of Metro's planned extension to Dulles.

The Western Alliance for Rail to Dulles, a nonprofit group made up of Fairfax landowners, is trying to drum up support for the special tax district to help fund the 23-mile extension from a planned Wiehle Avenue station in Reston to Dulles International Airport and Route 772 in Loudoun County.

Members of the group had hoped to gather enough signatures by Sept. 18 but fell short, said Lee Fifer, general counsel for the alliance and a lawyer with the McLean firm McGuireWoods. To implement the district, the group needs support from either a majority of the affected landowners or from owners controlling a majority of the land in the area.

Fifer declined to disclose the percentage of landowners who have signed on, but he and Fairfax County Supervisor Catherine M. Hudgins (D-Hunter Mill), whose district includes Tysons Corner, said that the figure is close to the required 51 percent majority.

"It's very critical that we do this, given the implications for our business community, and I'm continuing to encourage this as an effective marriage between what we need as far as funding and the potential for future development," Hudgins said. "We're nearing the percentage. When you're dealing with a lot of signatures, you really get all sorts of landowners."

In a letter to landowners last month, the alliance said that if the district is not formed by the end of the year, funding for the extension would be in "jeopardy, making it very likely that three future rail stations . . . will never be built."

The alliance represents about 30 percent of the affected landowners. A handful of other businesses, represented by the nonprofit Dulles Corridor Users Group, have campaigned against the tax district, saying that the Metro extension is not cost-effective and that it would do little to ease gridlock.

Fifer said he is optimistic that the signatures will be collected by the end of the year. The alliance encouraged landowners to sign up by Tuesday, arguing that the Metro stations, once completed, would allow for increased density and development.

Fifer said a January start date for tax collection would be crucial, in that it would help build up cash reserves to pay down bonds once they were issued. "The sooner we start collecting, the easier it'll be to pay it off," he said.

The plan calls for an initial tax rate of 5 cents for each $100 of assessed value for commercial landowners. The tax rate would increase by 5 cents per year, to 20 cents per $100 of assessed value in 2013. Beyond that, the alliance says, the tax rate would remain below 25 cents.

The county's debt manager, Len Wales, said the $330 million in capital investments for the taxed landowners could reach more than twice that amount once interest rates are locked in. And Fairfax is expected to pitch in $90 million.

At least 51 percent of the commercial property owners in the proposed tax district, representing $8.4 billion in property values, must sign on before it can be approved. The petition also needs approval from the Herndon Town Council and Fairfax's Board of Supervisors.

Stewart Schwartz, executive director of the Washington-based Coalition for Smarter Growth, said several landowners had expressed concern about the long walk for commuters from station platforms to nearby mixed-use developments. His group has recommended improvements to pedestrian overpasses at the stations, including air-conditioned walkways and automated "people-movers."

Board of Supervisors Chairman Sharon Bulova (D) said that although the economic climate is "not ideal for this project," county officials are feeling "pretty positive about the funding mechanism to get rail to Dulles."

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