Reflecting Back, Looking AheadI recommend you read the entire article. It looks in greater depth at the drivers for this trend in housing and transportation, and outlines what the National League of Cities is doing to address it.
by James Brooks
People who earn large cash profits from developing residential and commercial real estate suggest that retiring baby-boomers and young couples with or without children want to live in walkable, mixed-use neighborhoods. “We in real estate are fundamentally re-tooling how we design, plan, regulate and finance to serve this pent-up demand,” says land use developer and strategist Chris Leinberger.
The evidence points to a willingness for many to give up thousands of square feet of living space and open land in exchange for more compact residences close to shopping, dining and entertainment. The trend also suggests that people will pay higher prices for housing in denser communities in exchange for reductions in time, distance and costs associated with traveling by car to reach an employment destination.
The trend line is moving in the direction of urban community models. If borne out over the next decade or two, this shift will represent the most dramatic change in land use, housing and transportation patterns since the completion of Levittown in 1951.
Reston Spring
Reston Spring
Tuesday, January 31, 2012
A Time of Transformation in Housing and Transportation, National Cities Weekly, National League of Cities, January 30, 2012
Monday, January 30, 2012
Notes: RA DRB Workshop on Fairway Apartments Redevelopment, January 25, 2012
Wednesday’s DRB / JBG workshop was interesting. Before the workshop began, I read my Oct. 22, 2011, letter to Cathy Hudgins (see link) citing the reasons a senior oriented development would make great sense and followed up with the stat from last the January 24 Reston Task Force meeting by Lisa Sturtevant of GMU that 60% of retirees stay in Fairfax Co. and probably that percentage is larger in Reston due to its unique flavor. I stressed the win/win philosophy of Reston 2020.
JBG stated that they can’t afford to keep going back to the drawing board and wanted some direction from DRB as to what would be approved. JBG’s John Schlicting was there and stated that he is retiring Feb. 1st. He introduced Greg Trimmer who was there with his project partner, Bailey who would be taking over from him.
Nothing majorly new was presented by JBG except contemporary façades on the buildings. DRB member Richard Newlon wasted no time in pointing this out. He is not subtle and put JBG on notice early on that he was disappointed. Other board members followed suit.
During a two hour discussion and back/forth, some on the DRB board gave passing thought to approving Texas Donut construction. Comments were made that those cheaply constructed buildings do not age well and are miserable mass housing options not suitable for the community-focused Reston landscape. Ed Abbott was particularly opposed to the Texas Donut and pointed out that when the DRB first met with JBG many months ago, it stated categorically that Texas Donuts were unacceptable structures for Reston .
Jennifer Byl was very concerned with the height at 3 ½ floors of the townhouses bordering the complex. I was thinking that wasn’t as important and may even help integrate the bigger buildings in the complex except for the units directly adjacent to the Clubhouse Cluster. Too tall townhouses would block their western light. Since there are only 8 of those units, not too many of the Fairways units might be affected if sited correctly.
At the end, I spoke up again and said to JBG, “Ditch the donut and pay attention to whom you are marketing. If it’s young and singles, you will want one type of development but if it’s seniors and handicapped, you will design to another style.”
I was trying to facilitate a win/win by having JBG realize that seniors wouldn’t want or need a Texas Donut which would’ve helped the DRB get the substantive changes it needs to approve JBG’s plan, but Mike Miller commented that the DRB wasn’t concerned with JBG’s marketing focus. Jennifer Byl did speak up in favor the senior concept, however.
What we need here is a classy development with superb architecture that will be welcomed with open arms and not devalue the neighboring properties by creating a traffic nightmare and overburdening of the surrounding infrastructure.
Another workshop is scheduled for February. I don’t know if the BOS meeting (to approve the JBG proposal) will remain as scheduled. That will be decided later. Clearly Supervisor Hudgins is mediating between the DRB and JBG regarding comments made by the DRB who felt they had been taken advantage of by JBG’s going to the county P & Z before getting concept approval from the DRB.
I spoke to Greg Trimmer after the meeting briefly as well as wishing the JBG architect good luck and telling them both to not even consider a donut as it would never be approved in Reston .
Tammi Petrine
Co-Chair, Reston 2020
Friday, January 27, 2012
RCA Study Shows Wilbur Smith Toll Revenue Forecast Errors Put Dulles Toll Road at Risk
PRESS RELEASE Point of Contact:
January 27, 2012 Terry Maynard
703-476-5376
RESTON CITIZENS ASSOCATION STUDY SHOWS MASSIVE OVERESTIMATES IN WILBUR SMITH FORECASTS UNDERMINE FINANCIAL VIABILITY OF TOLL ROADS; CALLS FOR INDEPENDENT FORECAST BEFORE PROCEEDING WITH PHASE 2 OF THE METRORAIL SILVER LINE.
“Our analysis of a number of Wilbur Smith Associate’s forecasts for toll facilities indicates they frequently overestimate the toll revenues,” Colin Mills, President of the Reston Citizens Associations (RCA) Board of Directors said. He continued, “These overestimates have led to major financial restructurings and even toll road bankruptcies in the cases we looked at, resulting in major losses to investors and bondholders as well as often requiring new public funding and higher tolls.” RCA completed the study as Wilbur Smith Associates (WSA) is about to complete its third traffic and revenue forecast for the Dulles Toll Road and the “funding partners” for the Silver Line are preparing to approve a decision to move forward with Phase 2 of the line’s construction.
The 81-page analysis, entitled Wilbur Smith Associates’ Traffic and Revenue Forecasts: Plenty of Room for Error, examines the widely recognized phenomenon of “optimism bias”—overestimating traffic and revenues—in toll road forecasts and how Wilbur Smith Associates’ (WSA) work fits into that context. Data from a national study of toll road overestimates indicates WSA’s forecasts averaged a 127% overestimate of revenues—more than double—for the first five years for twelve projects it supported. Other forecasting groups performed nearly as poorly, but WSA’s forecasts did not improve over that time span while the others improved markedly. RCA made no broad judgments that WSA’s studies were better or worse than any of its competitors since it didn’t study its competitors’ work in depth.
RCA looked at four cases where WSA seriously overestimated near-term future revenues, sometimes by more than half, with adverse results. In two cases, the toll roads filed for bankruptcy; the others required major financial restructuring. All ended up with major losses to owners and bond holders as well as larger, longer debt servicing arrangements that saw local taxes and/or tolls climb further.
In looking at these toll road cases and two cases involving pending toll bridge construction decisions, RCA discovered several disturbing trends in WSA’s forecasts.
- The initial forecast by WSA in a series of reports for a project tended to underestimate the revenue maximizing toll. Subsequent reports forecast that much higher tolls were needed.
- It routinely used the most optimistic population and employment forecasts available to drive its forecasts upwards, resulting in significant errors when compared with 2010 Census data.
- The four toll roads that used WSA’s forecasts usually saw the shortfall in revenues within one or two years. Nonetheless, they tended to continue to use new WSA forecasts for some time with few improvements in results.
The RCA assessment notes that WSA’s work in its two studies of the Dulles Toll Road so far (2005 and 2009) show the same disturbing trends. Its 2005 forecast put the revenue maximizing toll at $2.00; its 2009 study called for tolls to reach $11.25. It used the highest available population and employment forecasts in both forecasts, overestimating 2010 Fairfax employment by 25% in 2005 and 52% in 2009.
The pattern of overestimates in WSA’s forecasts suggests a substantial risk in proceeding with the Metrorail line’s current financial plan. The report notes risks that:
- Lenders will not fund the three billion dollars needed to finance Metrorail construction, or will require state guarantees or funding for an investment grade rating.
- Tolls may double those forecast by WSA to meet debt servicing requirements, compensate for the revenue overestimate, pay higher interest rates, and offset reduced traffic demand.
- Much higher toll rates on the Dulles Toll Road will discourage economic growth along the Dulles Corridor and force a substantial flow of traffic to already congested nearby highways and roads.
- MWAA may have to use airport revenues to pay Dulles Toll Road debt servicing obligations.
- MWAA may face default or restructuring of its Dulles Toll Road debt at a greater debt servicing—and greater toll— expense over a long period of time.
In its recommendations and a cover letter to Virginia Governor McDonnell, FHWA Administrator Mendez, and the Silver Line funding partners—MWAA, and Fairfax and Loudoun counties—RCA calls for an immediate independent traffic and revenue forecast overseen by Virginia’s Department of Transportation. It further calls on the funding partners to defer any decision on proceeding with Phase 2 Metrorail construction and FHWA to withhold approval of any financing until the independent forecast is prepared and differences between it and the WSA forecast are resolved. It also calls for MWAA to release the upcoming traffic and revenue study as soon as possible, and for all the funding partners to engage the public in a dialogue on whether and how to proceed with Phase 2 under the current financial plan. Longer term, it calls on FHWA to oversee a process that would lead to a substantial improvement in traffic and revenue forecasts.
RCA Board member Tammi Petrine added, “We are particularly concerned that the upcoming Wilbur Smith forecast will not consider recent GMU’s authoritative research indicating regional growth over the next two decades will be much more slower than they had previously forecast. Both the continuing hard climb out of the recession and coming cutbacks in federal spending will slow Fairfax County growth significantly for a number of years. The new WSA report should be carefully read to see how it treats these variables. Given the WSA record of ‘optimism bias,’ particularly its past use of excessive Fairfax County employment projections, this may become a major problem.”
“RCA has long been enthusiastic about Metrorail to Dulles via Reston,” said Terry Maynard, the report’s principal drafter, “but we do not want a rail line at any price, especially one that forces Dulles Toll Road users to absorb most of the financial burden and area communities to absorb added traffic on already crowded local roads. The prospects are even worse if the WSA forecasts overestimate revenues as much as our research suggests. We hope that an independent forecast, combined with ‘value engineering’ for Phase 2 and restructuring the financial arrangements will lead to a better outcome for everyone.”
RCA Study--Wilbur Smith Traffic & Revenue Forecasts--012712
RCA Study--Wilbur Smith Traffic & Revenue Forecasts--012712
Thursday, January 26, 2012
Moody's: "In light of the ongoing rise in debt, our outlook for the toll road sector remains negative"
Announcement:Moody's medians show large increase in toll road debt
Global Credit Research - 25 Jul 2011New York, July 25, 2011 -- The rated debt of the U. S. toll roads rose 19.2% in 2010, to $72.7 billion from $61 billion, which will exert negative credit pressure on the established toll roads, according to a new report from Moody's Investors Service.
"In light of the ongoing rise in debt, our outlook for the toll road sector remains negative," says Moody's Senior Vice President Maria Matesanz, author of the report.
"As the economy recovers, toll facilities are going to issue debt to finance both upgrades for aging infrastructure and new projects to increase capacity," said Matesanz. "Both cash-strapped state and local governments will look increasingly to their toll roads to finance transportation projects that they can't or are unwilling to fund with tax revenues."
On the positive side, says the Moody's report, traffic has been stabilizing, and even recovering in some regions, and gasoline prices have declined from their peak in early 2011. In addition, increases in toll rates and cuts to operating expenses have offset some of the pressure of the higher debt service and preserved the liquidity and operating ratios of most toll roads.
Furthermore, many toll road operators are forecasting a resumption of slow-but-steady traffic growth, which is consistent with Moody's global macroeconomic GDP growth forecast for 2011 of 2.5% to 3.5%; over the long term, rekindled traffic and revenue growth are going to offset the additional leverage needed to fund new capital projects and update an aging infrastructure.
"However, " said Matesanz, "any positive, stabilizing trends have been tempered by the growing servicing costs for the rising debt, especially as, since the 2008 crisis, many issuers have had to replace their liquidity providers at higher costs or refinance debt with higher fixed rates, which raised their servicing costs and made for lower DSCRs."
At the same, despite declines, fuel prices are still volatile and could depress traffic growth, and as the toll roads start to rely more on rate increases to support their escalating debt service costs, they face the rising risk of traffic loss or diversion.
An omen as MWAA looks to add $2 billion to that top line total to finish Phase 1 and begin Phase 2 financing?
Moody's "U.S. Toll Road Sector Medians for Fiscal Year 2010: Heavy Debt Issuance Continues to Pressure Metrics" is available at www.moodys.com.
Wednesday, January 25, 2012
Loudoun County may back out of Dulles Rail Project, WTOP.com, January 25, 2012
Hank Silverberg, wtop.com
FAIRFAX, Va. - The first phase of the new Silver Line is well underway, but now there's concern Phase 2 of the 23-mile Metro expansion to the airport may run into money troubles again.
Loudoun County Supervisors, with seven new members in a budget-cutting mood, have talked about possibly dropping out of the project and canceling the last two stations of the $2.8 billion project.
It's a prospect that has Fairfax County supervisors, including Pat Herrity, asking a lot of questions. . . .
 |
| Rail construction is well underway in Tysons, along Route 7. (WTOP/Colleen Kelleher) |
The article identifies a number of issues a Loudoun back out would pose for Fairfax County. Check it out here.
Monday, January 23, 2012
Continuing Sizeable Commercial Real Estate Vacancies in Fairfax, Reston
Commercial real estate broker Avison Young has published its quarterly update for the Washington region and it paints a picture of malaise in the northern Virginia CRE market, especially in Fairfax County and Reston. Here's what we found:
Fairfax County's Economic Development Authority (FCEDA) reports similar data for the county and Reston as of mid-2011, but its reports are usually printed five months after the fact and are not particularly valuable in looking at the current state of the CRE market.
For more data on Washington metro area CRE markets, read the full report below.
Commercial RE Data for WDC Metro--4Q11
- Northern Virginia had a net negative absorption (occupied space) of 188,000 GSF in 2011 and its overall vacancy rate climbed from 13.3% to 13.7% as deliveries (space available) rose by 853,000 GSF.
- Within northern Virginia, Fairfax County had a slightly worse vacancy rate (14.5%) than the region as a whole although net absorption for the County was positive (705,000 GSF),
- Within the county, Reston had a substantially higher vacancy rate at the end of the year (17.1%) than the County as a whole, and saw a negative net absorption over the last year (-147,000 GSF), including a negative absorption of -308,000 in the fourth quarter.
- Even Tysons Corner's vacancy rate remained high at 14.9% with little absorption over the year (162,000 GSF).
Fairfax County's Economic Development Authority (FCEDA) reports similar data for the county and Reston as of mid-2011, but its reports are usually printed five months after the fact and are not particularly valuable in looking at the current state of the CRE market.
For more data on Washington metro area CRE markets, read the full report below.
Commercial RE Data for WDC Metro--4Q11
County Says Future Tysons Infrastructure Costs to Rise 24% Over Previous Estimates; Notes from January 19, 2012, PCTC Meeting
Presented below is a lightly edited version of an e-mail prepared by an observer at the most recent Planning Commission Tysons Committee (PCTC), January 19, 2012. Key news:
The ongoing debate also highlights what RCA Reston 2020 has long advocated: Implementation considerations should be addressed during the process of putting together a plan to make it realistic, not afterward when legal rights have been established for developers.
We suffered a setback of sorts at Thursday's PCTC, but first I'll open with some sobering news. The 2012 cost estimates for all Tysons transportation improvements from 2010 to 2050 went up 20%. I hope these tables come out formatted and readable.
Estimates of Total Infrastructure Costs for Tysons Corner, 2010-2050 ($MM)
1. These are 2012 planning estimates using up-to-date VDOT and county costing methodologies.
2. When the engineering starts, the costs may go up or down on a project basis, but generally the costs go up.
3. Fairfax County DOT will be revising these estimates one more time within the coming weeks. This revision will take into account the projected year of construction of each project and they will add in a 3% inflation rate.
4. These estimates do not include the cost of implementing a streetcar system in the 2030-2050 time frame which is estimated at $870,000,000. Staff does not yet know whether they will recommend a street car system, so the cost was not included in this estimate.
I think these costs could easily come to $4 billion, even without the streetcar system, once the inflation factor and, more importantly, the cost of financing bonds is added. For example, a 40-year $500M bond at 3.5% interest would cost $400M in total interest payments. By the way, no one at these meetings has speculated how much would be bonded or what the terms might be. This is my example using what I think would be a low interest rate.
The Tysons Comp Plan is based on an assumption of fairly high growth over a period of 2010 to 2050. Obviously the first two years produced next to nothing and the amount of redevelopment the in next two years will be modest. So essentially, the 40-year plan will be shifted to the right until significant redevelopment in Tysons starts. I've heard staff speculate that could be in the 2015-2018 time frame, but they were quick to note that no one knows. Staff did comment Thursday night that the pace of transportation improvements in Tysons over the next 40 years would be paced to keep up with redevelopment. If a recession occurs and redevelopment slows significantly, transportation spending would go down accordingly.
Tom Biesiadny, head of DOT, said they would model the planned growth in Tysons over the next 40 years to estimate when a sustained revenue stream from redevelopment would start and and how much it would vary over that time. Commissioner Alcorn commented that it would be interesting if they also modeled a 40-year period with a couple of recessions thrown in. Biesiadny agreed to do it.
Now, for our favorite topic, the allocation of responsibility for funding all these transportation improvements. Over the last 4 or 5 PCTC meetings, the commissioners divided the responsibility into three categories:
1. County taxpayer
2. Private sector
3. Federal and state contributions
For reasons I'm unsure, staff produced an analysis that divided the responsibility into two categories: public sector and private sector. A huge step backwards in my opinion and I said so. Commissioner Alcorn replied in a few weeks they would go back and divide the public sector into two: county tax payer and fed/state contributions.
Staff produced a handout that I hesitate to distribute because it is busy and confusing, but I'll try to explain it. Over the prior two months, the PCTC divided responsibility into 3 categories, but many transportation projects were actually put into multiple categories. For example, the widening of Gallows was assigned 75% public and 25% fed/state and the widening of Rt.7 inside Tysons was assigned 75% private and 25% fed/state. During these discussions, the commissioners would rate each project as 'mostly public' or 'mostly private' with the remaining costs going to the feds/state. Only one project was assigned 100% to feds/state. The commissioners did not know exactly how much 'mostly' should be, but for purposes of discussion they guessed the 'mostly' meant around 75%. They asked staff to look at who principally benefits from these improvements to determine what percentage 'mostly' might be. So, that bring us to staff's handout that analyzes three scenarios where 'mostly' meant 51%, 75% or 90%. Staff's conclusion after doing all the math was, and I'm quoting here, 'the final figures didn't change significantly over the three scenarios'. I looked at the numbers only in passing and concluded the analysis added little value to the process. I was happy with 'mostly' equaling 75% as first proposed because I thought the final costs assigned to county taxpayers were not unreasonable when everything is taken into consideration. Also, whether mostly means 51% or 90%, it applies equally to taxpayers and the Tysons developers.
So where does this leave us? We still do not know how much county taxpayers will be expected to fund. The PCTC needs to break out taxpayers' costs again out of the public sector category and how they will go about deciding this has not been discussed.
The last agenda item was a report by the Tysons Partnership (TP) on how Tysons should be funded. The TP representatives actually talked about many topics, but didn't actually present a plan for paying for the transportation infrastructure. Overall, their discussion points were even more sobering than the 20% increase in costs.
1. In order to make Tysons work and to fund the much-needed transportation improvements, there needs to be a Tysons-wide tax district where the landowners tax themselves to raise revenue. It would operate much like the existing Silver Line tax district where landowners have been paying 22 cent per $100 of land value to raise $400M to help fund the Metro. As they reach the $400M goal, the tax will gradually be reduced. The TP would like to keep the tax at 22 cent tax and dedicate the excess to Tysons transportation. The problem, and it's very big problem, is that many landowners are steadfastly refusing to pay for these transportation improvements. Why, they reason, should they pay this tax when many of them do not plan to redevelopment for a very long time (10-15 years or more) and when their land lies outside of the TOD areas and does not qualify for the much higher densities being given to landowners near the Metro stations. Also, Lerner and Macerich, who are inside the TOD area, have already obtained county approval for their significant redevelopments and see no benefit in paying this tax.
The reality is the landowners outside the 1/2-mile TOD areas WILL benefit from the transportation improvements, but they don't want to pay as they feel the TOD area landowners lopsidedly benefit. These problems associated with establishing a Tysons tax district are well-known within the Tysons landowner community, but this was the first time the TP has discussed them in public testimony at a PCTC meeting.
2. Even if the landowners inside the four TOD areas decide to form their own tax district, any tax revenue raised, by state law, must be spent inside the tax district boundaries. Unfortunately, the needed transportation improvements cover all of Tysons and many of them even lie outside the border of Tysons.
3. The TP would like to create a separate tax district where landowners outside of the TOD areas would pay a very modest tax, say 5 cents, as this would create a constant revenue stream for 40 years, something everyone agrees is essential. However there may be state constitutional issues with this idea and it would most likely require supporting legislation from Richmond. In the meantime, the words 'law suit' are being thrown around by people opposed to seeing separate tax districts established. My take is this is a serious issue that will require a political solution.
4. The TP is upset with the 20% increase in transportation cost estimates. They thought the previous estimates were already very high. The TP wants the county to set a firm, fixed price for their share of the transportation improvements. Of course they want that, who wouldn't? They were able to get a fixed price of $400M for the Metro and now the Silver Line costs overruns are being passed on to the Toll Road users. That was a great deal for the Tysons landowners, but it won't happen again.
5. They reported that the cost of development in Tysons has risen 41% in the last three years, however they provided no data to substantiate this claim. Frankly, I find it hard to believe. I would like to see a breakdown of all these costs to better understand which components have increased so dramatically.
6. The TP also plans to do their own growth modeling.
- Total infrastructure costs for the next 20 years have risen 23.6%, largely on increased estimates of "Tysons-wide" transportation improvements (35%).
- With total 40-year costs now put at $3.0 billion (vice $2.5 billion), the author suggests costs could actually reach $4 billion when interest costs are included.
- Committee members suggest that, given the absence of growth in the last two years, the whole plan may "shift to the right" or later years.
- The issue of who pays for all this remains up in the air. County staff didn't help the matter by grouping federal, state, and local public payers together. (The issue has focused on how much Fairfax County taxpayers will have to pay. The PCTC has a proposal that they should pay two-thirds; the McLean Citizens Association--supported by Reston Citizens Association--has advocated that taxpayers pay for no more than one-quarter. The MCA-RCA proposal is based on who benefits financially from the infrastructure effort.)
- Besides the local taxpayer vs. landowner split, there is a split between landowners who have property close to the Metro stations and those who do not as to who should pay for the improvements.
The ongoing debate also highlights what RCA Reston 2020 has long advocated: Implementation considerations should be addressed during the process of putting together a plan to make it realistic, not afterward when legal rights have been established for developers.
We suffered a setback of sorts at Thursday's PCTC, but first I'll open with some sobering news. The 2012 cost estimates for all Tysons transportation improvements from 2010 to 2050 went up 20%. I hope these tables come out formatted and readable.
Estimates of Total Infrastructure Costs for Tysons Corner, 2010-2050 ($MM)
* Previous Estimate* * New Estimate * * Change *
2010-2030 $1,698 $2,099 23.6%
2030-2050 $831 $939 13.0%
Total $2,529 $3,038 20.1%
Estimates of Total Infrastructure Costs for Tysons Corner, by Type, 2010-2030 ($MM)
*Previous* *Updated* *Change*
Grid of streets $443 $519 17.2%A few caveats to bear in mind:
Tysons-wide $810 $1,095 35.2%
Transit $374 $408 9.1%
Neighborhood $70 $77 10.0%
Total $1,697 $2,099 23.7%
1. These are 2012 planning estimates using up-to-date VDOT and county costing methodologies.
2. When the engineering starts, the costs may go up or down on a project basis, but generally the costs go up.
3. Fairfax County DOT will be revising these estimates one more time within the coming weeks. This revision will take into account the projected year of construction of each project and they will add in a 3% inflation rate.
4. These estimates do not include the cost of implementing a streetcar system in the 2030-2050 time frame which is estimated at $870,000,000. Staff does not yet know whether they will recommend a street car system, so the cost was not included in this estimate.
I think these costs could easily come to $4 billion, even without the streetcar system, once the inflation factor and, more importantly, the cost of financing bonds is added. For example, a 40-year $500M bond at 3.5% interest would cost $400M in total interest payments. By the way, no one at these meetings has speculated how much would be bonded or what the terms might be. This is my example using what I think would be a low interest rate.
The Tysons Comp Plan is based on an assumption of fairly high growth over a period of 2010 to 2050. Obviously the first two years produced next to nothing and the amount of redevelopment the in next two years will be modest. So essentially, the 40-year plan will be shifted to the right until significant redevelopment in Tysons starts. I've heard staff speculate that could be in the 2015-2018 time frame, but they were quick to note that no one knows. Staff did comment Thursday night that the pace of transportation improvements in Tysons over the next 40 years would be paced to keep up with redevelopment. If a recession occurs and redevelopment slows significantly, transportation spending would go down accordingly.
Tom Biesiadny, head of DOT, said they would model the planned growth in Tysons over the next 40 years to estimate when a sustained revenue stream from redevelopment would start and and how much it would vary over that time. Commissioner Alcorn commented that it would be interesting if they also modeled a 40-year period with a couple of recessions thrown in. Biesiadny agreed to do it.
Now, for our favorite topic, the allocation of responsibility for funding all these transportation improvements. Over the last 4 or 5 PCTC meetings, the commissioners divided the responsibility into three categories:
1. County taxpayer
2. Private sector
3. Federal and state contributions
For reasons I'm unsure, staff produced an analysis that divided the responsibility into two categories: public sector and private sector. A huge step backwards in my opinion and I said so. Commissioner Alcorn replied in a few weeks they would go back and divide the public sector into two: county tax payer and fed/state contributions.
Staff produced a handout that I hesitate to distribute because it is busy and confusing, but I'll try to explain it. Over the prior two months, the PCTC divided responsibility into 3 categories, but many transportation projects were actually put into multiple categories. For example, the widening of Gallows was assigned 75% public and 25% fed/state and the widening of Rt.7 inside Tysons was assigned 75% private and 25% fed/state. During these discussions, the commissioners would rate each project as 'mostly public' or 'mostly private' with the remaining costs going to the feds/state. Only one project was assigned 100% to feds/state. The commissioners did not know exactly how much 'mostly' should be, but for purposes of discussion they guessed the 'mostly' meant around 75%. They asked staff to look at who principally benefits from these improvements to determine what percentage 'mostly' might be. So, that bring us to staff's handout that analyzes three scenarios where 'mostly' meant 51%, 75% or 90%. Staff's conclusion after doing all the math was, and I'm quoting here, 'the final figures didn't change significantly over the three scenarios'. I looked at the numbers only in passing and concluded the analysis added little value to the process. I was happy with 'mostly' equaling 75% as first proposed because I thought the final costs assigned to county taxpayers were not unreasonable when everything is taken into consideration. Also, whether mostly means 51% or 90%, it applies equally to taxpayers and the Tysons developers.
So where does this leave us? We still do not know how much county taxpayers will be expected to fund. The PCTC needs to break out taxpayers' costs again out of the public sector category and how they will go about deciding this has not been discussed.
The last agenda item was a report by the Tysons Partnership (TP) on how Tysons should be funded. The TP representatives actually talked about many topics, but didn't actually present a plan for paying for the transportation infrastructure. Overall, their discussion points were even more sobering than the 20% increase in costs.
1. In order to make Tysons work and to fund the much-needed transportation improvements, there needs to be a Tysons-wide tax district where the landowners tax themselves to raise revenue. It would operate much like the existing Silver Line tax district where landowners have been paying 22 cent per $100 of land value to raise $400M to help fund the Metro. As they reach the $400M goal, the tax will gradually be reduced. The TP would like to keep the tax at 22 cent tax and dedicate the excess to Tysons transportation. The problem, and it's very big problem, is that many landowners are steadfastly refusing to pay for these transportation improvements. Why, they reason, should they pay this tax when many of them do not plan to redevelopment for a very long time (10-15 years or more) and when their land lies outside of the TOD areas and does not qualify for the much higher densities being given to landowners near the Metro stations. Also, Lerner and Macerich, who are inside the TOD area, have already obtained county approval for their significant redevelopments and see no benefit in paying this tax.
The reality is the landowners outside the 1/2-mile TOD areas WILL benefit from the transportation improvements, but they don't want to pay as they feel the TOD area landowners lopsidedly benefit. These problems associated with establishing a Tysons tax district are well-known within the Tysons landowner community, but this was the first time the TP has discussed them in public testimony at a PCTC meeting.
2. Even if the landowners inside the four TOD areas decide to form their own tax district, any tax revenue raised, by state law, must be spent inside the tax district boundaries. Unfortunately, the needed transportation improvements cover all of Tysons and many of them even lie outside the border of Tysons.
3. The TP would like to create a separate tax district where landowners outside of the TOD areas would pay a very modest tax, say 5 cents, as this would create a constant revenue stream for 40 years, something everyone agrees is essential. However there may be state constitutional issues with this idea and it would most likely require supporting legislation from Richmond. In the meantime, the words 'law suit' are being thrown around by people opposed to seeing separate tax districts established. My take is this is a serious issue that will require a political solution.
4. The TP is upset with the 20% increase in transportation cost estimates. They thought the previous estimates were already very high. The TP wants the county to set a firm, fixed price for their share of the transportation improvements. Of course they want that, who wouldn't? They were able to get a fixed price of $400M for the Metro and now the Silver Line costs overruns are being passed on to the Toll Road users. That was a great deal for the Tysons landowners, but it won't happen again.
5. They reported that the cost of development in Tysons has risen 41% in the last three years, however they provided no data to substantiate this claim. Frankly, I find it hard to believe. I would like to see a breakdown of all these costs to better understand which components have increased so dramatically.
6. The TP also plans to do their own growth modeling.
Friday, January 20, 2012
Agenda: Reston Citizens Association Board Meeting, Monday, January 23, 2012, 7:30PM, Sheraton Reston Hotel
Effective this month, the Reston Citizens Association Board of Directors will be having its monthly meetings at the Sheraton Reston Hotel, 1810 Sunrise Valley Dr, Reston, VA, next to Reston International Center, rather than at the COMCAST studios. The Board decided to make this move after several discussions late last year concluded that we needed better arrangements to facilitate its deliberations with fewer time constraints.
The Board welcomes your attendance. We will be meeting in a conference room at the Sheraton Reston Hotel and the specific location will be posted in the hotel lobby. Below is the draft agenda for our meeting Monday evening.
And thank you to the Sheraton Reston Hotel for welcoming us!
The Board welcomes your attendance. We will be meeting in a conference room at the Sheraton Reston Hotel and the specific location will be posted in the hotel lobby. Below is the draft agenda for our meeting Monday evening.
And thank you to the Sheraton Reston Hotel for welcoming us!
DRAFT Agenda
RCA Board of Directors Meeting
January 23, 2011
| Item | Time | Topic | Disposition | Presenters |
| 1 | 7:30 PM | Adopt Agenda | Action | Colin Mills, RCA Board |
| 2 | 7:35 PM | Approve November 2011 Minutes | Action | Debra Eastham |
| 3 | 7:40 PM | Treasurer’s Report | Action | Diane Lewis |
| 4 | 7:45 PM | RCA Citizen of the Year | Discussion, Action | Colin Mills, RCA Board |
| 5 | 7:50 PM | RCA Strategic Plan | Discussion | Colin Mills |
| 6 | 8:00 PM | Planning for First Community Forum | Discussion, Action | Colin Mills, RCA Board |
| 7 | 8:10 PM | Paper re: Toll Road Forecasts | Discussion, Action | Terry Maynard, RCA Board |
| 8 | 8:25 PM | License Plate Campaign | Discussion | Dan McGuire |
| 9 | 8:35 PM | RA-RCA Relationship | Discussion | Dick Rogers |
| 10 | 8:45 PM | Fairways Update | Discussion | Tammi Petrine |
| 11 | 8:55 PM | Town Center Office Building | Discussion, Possible Action | Tammi Petrine, John Hanley |
| 12 | 9:05 PM | IT Committee Update | Discussion | Gary Walker |
| 13 | 9:10 PM | Other Business | Discussion | RCA Board |
| 14 | 9:15 PM | Location and Time of Next Meeting; Adjourn | Action | RCA Board |
BREAKING: RA CANCELS BUTTERMILK CREEK WALK DUE TO INCLEMENT WEATHER
RestonOnline Reston Association
Due to potential inclement weather, the Buttermilk Creek meeting and walk are canceled for this weekend. New time and date to be announced.
Federal spending cuts to impact local economy, Fairfax Times, January 20, 2012
Expert: ‘We will not slip back into recession, but we will see much slower growth’
Shamus Ian Fatzinger/ Fairfax County Times The Dulles Corridor building in Reston. Northern Virginia is projected to lead the metropolitan Washington, D.C., area in job production in 2012, but overall it will be an “anxious” economic year, according to the Center for Regional Analysis at George Mason University. . .
. . . (GMU Center for Regional Analysis Director Graham) Fuller said during the next few of years the D.C. area’s economy is expected to continue to outpace the national economy, but cutbacks in federal spending eventually will hit the area hard.
Fuller said federal spending cutbacks likely will begin in full force after the November presidential election, and already are being anticipated by many agencies.This Fairfax Times article provides excellent coverage of Dr. Fuller's comments at the regional economic conference last week. The latest County commercial real estate report (mid-2011) indicates that direct office building vacancy rates in Reston then were 15.3% and climbing while the County-wide average was 12.8% and declining. Obviously, with the high proportion of government contractors and even government-leased space in Reston, that percentage could go higher next year--and maybe several years.
Opposing Views on Whether Dulles Rail Should Go to Dulles
FOR: Dulles Metro must go to Dulles Airport, GreaterGreaterWashington
By Dan Malouf
It seems like a no-brainer that the long-planned Dulles Airport Metro line should include a stop at Dulles Airport, but to one key decision-maker, that remains an open question.
At yesterday's meeting of the Metropolitan Washington Airports Authority (MWAA), board member Robert Clarke Brown, a presidential appointee, suggested re-routing Phase 2 of the Silver Line to skip Dulles Airport.
The airport station is expensive, he says, and so MWAA should consider simply not building it. Metro riders hoping to access Dulles would instead transfer to some kind of shuttle or people-mover from the Route 28 station, the next closest.
Skipping the airport and replacing it with a people-mover would reduce the project's overall $2.8 billion price tag by approximately $70 million. That, argues Brown, is reason to take his suggestion seriously. It shouldn't be. . . .
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| Photo by XYZ+T on Flickr. |
By Yonah Freemark
Yesterday, Robert Brown, a member of the Metropolitan Washington Airports Authority (MWAA), suggested rethinking his agency’s planned Metro rail extension out to Dulles Airport, the Washington region’s prime international gateway. Instead of the bringing this $2.8 billion rail link — frequently referred to as the Silver Line — directly to the airport, Brown noted that replacing the final 1.5-mile connection with a people mover would save $70 million thanks to a more limited right-of-way and the construction of one less Metro station.
The Silver Line is an extension of the Washington Metro’s Orange Line and will eventually reach Loudoun County. The first segment of the project, to Tyson’s Corner and Wiehle Avenue, is planned to open for service next year.
Perhaps unsurprisingly, the idea was perceived as heresy, both by local commenters and board members. Mame Reiley, one board member, said “I just don’t think that’s what we labored for… it is not rail to Dulles.” Concerns were raised that the federal government might delay the program because the board was “starting over.” And indeed the proposal appears to have been dismissed by the authority board as unacceptable.
Counter-intuitively, however, such a change in alignment could be a reasonable money-saver and may actually improve transit service for both commuters and air travelers. And though the question is immediately relevant to the Dulles Rail extension, it is equally valid to many cities, as the issue of extending rail networks out towards airports is frequently of concern for transportation planners in major metropolitan areas. . . .
Check them both out!
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