Donley to seek alternative to special tax district

By Christy Goodman
Washington Post Staff Writer
Thursday, July 1, 2010

Alexandria Vice Mayor Kerry Donley has told about 30 residents of the Potomac Greens neighborhood that he will seek an alternative to taxing them in order to help the city finance a new Metro station.

Donley (D) made the commitment during a recent community meeting at which residents said a special tax district would target them unfairly. One resident threatened to try to hold up the proposed Potomac Yard development in hearings or with a lawsuit if the city passed a special tax on the community.

"We are going to be all over this," said Deborah Vitale, who moved into the neighborhood recently and vowed to tie up the Metro construction in red tape if she had to pay additional taxes. "This is the most unfair proposal I've ever seen," she said.

The Alexandria City Council unanimously approved a $3 billion to $4 billion proposal June 12 for construction of 7.5 million square feet of commercial, residential and retail space on a 69-acre tract in Potomac Yard. The project is contingent on a Metro station being built.

The city plans to sell about $275 million in bonds to cover the station's construction costs and use tax revenue from the project and the special districts to repay the debt.

One district would pay 20 cents per $100 of its assessed property value; the other district, which would include the 227 homes in Potomac Greens, would pay 10 cents per $100 of assessed property value, starting when the station is built. That would produce $200,000 in revenue per year over 25 years until the debt is paid off.

By Vitale's math, each Potomac Greens homeowner would pay about $25,000 total.

Donley said that the city could "probably support" about 2 million square feet of development on the site without Metro as one option. Another option would be to not tax the community and block its access to the new station. The current plan is to impose a special tax on communities and new developments within a quarter-mile, or walking distance, of the proposed transit station.

"If taking them [Potomac Greens residents] out of the tax district creates a hole" in the Metro station's financing, "it is incumbent on us to find a solution," Donley said.

Many residents have said they think the entire city would reap the benefits, so the entire city should be taxed.

Donley said it would be "patently unfair" to tax the entire city because West End residents would not get a direct benefit from the station.

Residents also offered other suggestions.

Alexandria isn't accounting for the additional money created by rising property values for homes near the newly built station, resident Ben Chou said. "You will more than get your $200,000," without a special tax district, he said.

Dave Adams, who moved into the neighborhood two years ago, said, "$200,000 doesn't seem like that much money. There should be an option to absorb that cost without taxing 200 taxpayers."

Donley did not make a decision for or against the taxing districts at the community meeting. He committed, however, to considering options that do note include a special tax district for Potomac Greens.

Residents are continuing to meet with city staff and council members to discuss ideas.

© 2010 The Washington Post Company