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Metro: Loudoun’s In, Now for Tax District

Despite critics, businesses and landowners appear either enthusiastic or silent as proposal for new assessment heads for hearing.

, work will begin on creating the tax district the Board of Supervisors hope will pay for it.

Just before the all-Republican board’s divided vote to opt in, supervisors directed staff to begin the process of establishing the ordinances needed to create the tax district, with a public hearing prior to Nov. 1 and an implementation date of Jan. 1, 2013.

The Metropolitan Washington Airports Authority, the entity tasked with building both phases of the Dulles Corridor Metrorail Project, announced last week, marking the first move forward on the estimated $2.7 billion second phase project since Loudoun’s July 3 vote.

By opting in, the county agrees to pay 4.8 percent of the entire Silver Line project, not just phase two, a share currently estimated at nearly $270 million. Debt service payments for construction are estimated to be about $18 million annually, while operation and maintenance are estimated to cost about $16 million. The construction costs eventually go away, while the operation and maintenance costs will rise with ridership over time.

Critics, some of which suggested early in the debate that businesses should step up, have been quick to question whether landowners would balk at the tax district, or whether it could stifle business.

that “more than 50 percent of the land in that district is owned by large developers with no interest in a $0.20 tax, especially because they already got what they want,” with the board’s vote to opt in.

“One of those big developers has already told another anti-Metro activist that it's time for the public to pay for its infrastructure,” Grigsby continued in the letter. “So we, the common taxpayers, living in the highest tax county in Virginia, will be footing the bill.”

A speaker commented during a public hearing prior to the Loudoun board’s vote that a data center developer planned to pull out of Loudoun because of the rail project and the potential taxes, but did not name the developer.

Despite such assertions, the business community has largely embraced the project and the proposed tax district. And while not all large landowners have made their views clear, at least one has.

“We have never suggested nor do we believe that data centers as a business will pull up and leave Loudoun County if a special tax district is implemented as planned,” said Lammot du Pont, of DuPont Fabros, a data center developer that owns at least 77 acres within the proposed tax district. He called Loudoun a “terrific place to do business.”

The Claude Moore Charitable Foundation has preserved 387 acres near the last planned stop on the Silver Line for many, many years specifically in anticipation of rail.

The Loudoun County Chamber lauded the board’s vote as historic, offering continued support to make the project work. The chamber had previously endorsed a tax district of up to 20 cents to pay for the project, as well as a countywide commercial and industrial tax the board ultimately abandoned.

“The Loudoun business community can be very proud of the historic role it played in convincing a majority of supervisors to approve rail to Loudoun for future generations of Loudoun County businesses, employees and citizens,” Howard said. “From small business owners and young professionals to corporate CEOs and their employees, the overwhelming show of support that the Loudoun business community gave to the Dulles Rail Project absolutely made a positive difference” in the board’s vote.

The following business organizations also gave support to the project and its funding:

  • Apartment and Office Building Association of Metropolitan Washington
  • Committee For Dulles
  • Dulles Corridor Rail Association
  • Dulles Regional Chamber of Commerce
  • Dulles South Business Alliance
  • Fairfax County Chamber of Commerce
  • Greater Reston Chamber of Commerce
  • Loudoun County Chamber of Commerce
  • Loudoun CEO Cabinet
  • Loudoun County Economic Development Commission
  • National Association of Industrial and Office Properties
  • Northern Virginia Association of Realtors
  • Northern Virginia Transportation Alliance
  • Virginia Associated Builders and Contractors
  • Washington Airports Task Force

Michelle Frank, director of government relations for Orbital, said her company rarely weighs in on decisions made by local elected bodies, but that this decision was too important to remain silent. Orbital does not appear to be within the proposed Metro tax district, but it does pay into the Route 28 tax district.

“We felt that rail was important enough to make a rare exception to that policy,” she said just before the Loudoun board voted. She also said salaries average $116,000 at the $17 billion business, which she clarified “with a ‘B,’ billion dollars.”

The tax district under consideration to pay for Loudoun’s share includes all of Dulles International Airport and the commercial property near the rail line expected to benefit most from the project. The district, as proposed, is divided into three subdistricts: an airport district, station development districts within ½-mile of the proposed stations and remainder of the district minus the station development districts.

As currently proposed the maximum rate for any district would be 20 cents per $100 of assessed real estate value. For some businesses, that means a new tax in addition to the Route 28 special tax district.

That would be mean an effective real estate tax rate of $1.615 per $100 for some landowners, equal to comparable tax rates for land near rail in western Fairfax, but higher than tax rates in Tysons Corner, at about $1.405.

While the district excludes all but about 27 residential properties, new homes within the tax district would pay the district fee. As a comparison, county staff members showed that the rates for those residents would be about the same as many residents who live with the limits of a town and pay an additional town real estate tax.

Some other large landowners that may eventually weigh in:

  • TAB 1/Antigone, 268.3 acres
  • S.A. Associates South LC, 137 acres
  • Vizsla Ventures LLC, 96 acres
  • Loudoun Land Bay D LLC, 94 acres
  • Digital Loudoun Parkway Center, 38.8 acres  

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