MWAA Starts Move to Open 3,000 Dulles Airport Acres for Commercial Development

In a report entitled "Dulles seen as potential engine for revenue" on this morning's meeting of the MWAA Board of Directors meeting, Washington Post reporter Mark Berman says,

(One) options looks beyond the airport. The land managed by the authority around Dulles is largely undeveloped, and when Metro’s Silver Line extension reaches the airport in several years, McKeough said, that land will become more vital — and valuable.

“As far as I’m concerned, when it comes to Dulles, the sky’s the limit,” Jack Potter, the authority’s president and chief executive, told board members.

In an interview after his presentation, Potter stressed that there are no specific plans for development of the 3,000 acres surrounding Dulles.

Still, the MWAA board took a step in that direction Wednesday, approving an amendment to the lease that transferred control of the airports from the federal government to the authority in 1987.

The amendment loosens the lease’s restrictions on business in and around the airports. The lease largely restricts land use to business relating to air travel. But under the amendment, as long as the U.S. transportation secretary approves, the authority can use the land around Dulles to generate revenue. . . .

The 3,000 acres is roughly the same acreage as is available in the Tysons and Reston TOD areas and could provide both significant non-aviation lease revenues to MWAA and keen competition for developers in the two key Fairfax County development sites.

And yet the forecast demand for future commercial and residential demand along the Dulles Corridor is shrinking as part of a broader region-wide slowing of growth according to GMU's Center for Regional Analysis.  The greater availability of space and the shrinking growth in demand may make it difficult for significant development throughout the Silver Line corridor all the way to Loudoun County.  

UPDATED: Va. lawmakers turn cold shoulder to Fairfax transportation pleas, Washington Examiner, December 11, 2012

UPDATE:  Here's Reston Patch's take on lack of state support for local road funding.  Here is how the article begins:

Fairfax County’s transportation needs loomed heavily over a joint meeting of county supervisors and representatives from the Virginia State Senate and General Assembly Tuesday night.

Officials sat down to discuss priorities for the legislature’s fast-approaching 2013 session, and the county’s widely publicized road funding woes—a $3 billion need for road projects and improvements over the next decade—took center stage. The county faces a $300 million per year funding shortfall for the next 10 years.

“I know that we’re all aware Fairfax County and the Commonwealth are facing a transportation crisis,” said Sharon Bulova, chairman of the Fairfax County Board of Supervisors.

Fairfax County’s 10-year needs lie in the redevelopment of Tysons Corner, traffic-calming measures as a result of the Base Realignment and Closure (BRAC) process and transit projects for Dulles Rail and South County.

But nobody is quite sure where the money will come from. The Commonwealth’s Secondary Road Program, from which the county used to get $29 million annually, is dry. . . .

Click here for the rest of Patch's article.

By Taylor Holland

Virginia is unlikely to give Fairfax County any money to bridge the county's $3 billion transportation funding gap, based on the response the County Board of Supervisors received to its pitch for those funds Tuesday.

Board members spoke for nearly an hour on the county's self-dubbed "transportation crisis" to members of Fairfax County's delegation to the General Assembly, only to learn that lawmakers are divided on the topic and expect no transportation-related funding to come from the state next year.

"We cannot afford to take any more money out of the general fund," said Sen. Dick Saslaw, D-Springfield. "I mean not one penny."

Some legislators proposed possibly raising the gas tax or increasing sales taxes by 0.5 percent, but Saslaw said he wasn't confident that would pass . . . .

Click here to read the rest of the article.

Our take:  Fairfax County's own state legislators are unwilling to push hard to win additional state money for the county to address the $3 billion deficit in its transportation fund.  Is this how they represent the county's interests in Richmond?  No wonder we have a county-wide transportation funding crisis. 

On the other hand, the state will be more than happy to take all the added income tax revenues the new jobs in Tysons and the Dulles Corridor generate because of their rail-related urbanizing development.  Who knows where they will spend it, but apparently not in Fairfax and not on transportation.

UPDATED: More Bad News for Toll Road Forecasts: Orange County (CA) Toll Roads

 UPDATE:  Planetizen has more on the Orange County toll roads.  Here's the lede:

Two southern CA toll roads are so severely underperforming that the state treasurer is investigating whether the bondholders can be paid their interest. The San Joaquin Hills toll road's bonds are rated at junk status. Widening I-5 & 405 didn't help.

Here's a link to the post.  

Los Angeles Times, December 11, 2012

Orange County toll roads under review by California

With ridership and revenue on Orange County's toll roads falling short of projections, the state of California has launched a formal inquiry into their economic viability.

A view looking west from Aliso Viejo at the San Joaquin Hills Transportation corridor toll road where it crosses El Toro Road and snakes up the hill in Laguna Beach towards Newport Beach and Irvine. The photo was taken in 2004. (Don Kelsen / Los Angeles Times / February 19, 2004)

 By Dan Weikel

When it opened during the 1990s, Orange County's $2.4-billion tollway system was touted as an innovative way to build public highways without taxpayer money.

Today, the roads offer smooth sailing for gridlock-weary commuters willing to pay the price. But far fewer people are using the turnpikes than officials predicted, which means the highways generate far less revenue than expected to retire their debts.

There have long been questions about the long-term financial viability of the San Joaquin Hills and Foothill-Eastern corridors. But those concerns have now heightened, and a government oversight panel chaired by state Treasurer Bill Lockyer has launched a formal inquiry into whether the roads can cover mounting interest payments to private investors who purchased tollway bonds. . .

To meet expenses and debt payments, the corridor agency has refinanced the San Joaquin Hills bonds, raised tolls more than originally planned, slashed administrative costs and obtained repayment concessions from bondholders. Early next year, officials plan to refinance about $2.4 billion in notes issued to build the Foothill-Eastern tollway.

In 2011, ridership on the San Joaquin Hills, which has never performed as predicted, was only 43% of original forecasts, and its revenue was 61% of projections. The road parallels the Orange County coast, slicing south from Irvine through Newport Beach, Laguna Beach and Aliso Viejo to the San Diego Freeway.

Motorists on the Foothill-Eastern last year numbered 33% less than projected, and revenue was 75% of forecasts. Previously, the part of the corridor between Yorba Linda and Rancho Santa Margarita had a revenue surplus and ridership that was often 8% to 10% ahead of projections. The extra money was used to help shore up the finances of the San Joaquin Hills road. . . .

Click here for the rest of this lengthy and alarming article.  

The forecasts for both of these tolls roads were prepared and revised by Wilbur Smith Associates, now CDM/Smith, the company that has prepared three similar forecasts for the Dulles Toll Road.   An excellent article in TollRoadsNews (May 15, 2012) shows that, over a 15-year history, the forecasts for the Foothill-Eastern toll road went from on target to off by 25% after the recession hit in 2007.  The forecasts have never been close for the San Joaquin Hills toll road.  The article shows the annual results for the two toll roads and discusses the possible causes for the errors.

Given the history of experience with the two toll roads, the LA Times report raises questions anew about the viability of the latest CDM/Smith Dulles Toll Road traffic and revenue forecast.    Will the already outrageous forecast tolls have to go higher if CDMS has over-estimated traffic on the toll road?  So far, CDMS' latest traffic forecast has been very close to the mark--as it should be in forecasting behavior on a toll road that has been in operation for two decades.  It is unclear why the experience in Orange County hasn't led to forecasts with lower traffic and revenue outcomes.

It is a cause for worry about future toll increases on the Dulles Toll Road. 

Reston Task Force Phase 1 Report, Preliminary Draft, V1, November 28, 2012

11-28-2012 Preliminary Tfreport Draft v1

Transit ridership rises nationally, drops in the DC region; Rebuilding Place in the Urban Space, December 10, 2012

By Richard Layman

According to "Use of public transportation jumps" from the Los Angeles Times, transit ridership is increasing nationally, likely in response to tighter household budgets, gasoline price increases, etc., using the most recent data from the American Public Transportation Association.  Ridership is up 2.6% nationally, and a bit less, under 2% in Los Angeles.

But after raising fares last year, WMATA reports ("Metrorail ridership drops 5 percent below agency's target" from the Examiner) that ridership has dropped.  Also see "If not Metro fare increases, what does it take to unite riders?" from the Post's Dr. Gridlock column.

The WMATA system is an odd combination of a local railroad commuter system and subway system and has a fare structure more like railroads, . . .

Click here for the rest of this blog post, which looks briefly at some possible causes for the decline in Metro use--starting with fare increases.  

Letter: Tysons Tax District Should Worry Us, Kathy Kaplan, Reston Patch, December 11, 2012

Should homeowners in Reston be worried that their property taxes could be increased to pay for roads and bridges necessary for the density planned around the Silver Line Metro stations?

The Fairfax County Board of Supervisors has just given the residents of Tysons Corner a lump of coal in their Christmas stockings. 

The Board of Supervisors is in the process of creating a special "service" tax district to pay for road and bridge improvements to support the creation of the new city of Tysons.  The current residents of  Tysons Corner will have their property taxes raised.  Since estimates on large construction projects are usually underestimated, Tysons residents can reasonably expect that tax burden will increase over time. . .

Should homeowners in Reston be worried that their property taxes could be increased to pay for roads and bridges necessary for the density planned around the Silver Line Metro stations?  They should.  This (service district)  is the mechanism the county intends to use to pay for Reston's redevelopment. . . .

For the rest of this important letter, click here.

Kathy's letter raises an important issue that should concern all Restonians:  Who pays for all the infrastructure investment that the major re-development around the Metro stations will require?

In Tysons, the proposal before the Board is that those who own property within the Tysons District (about 2,000 acres around its four Metro stops) will pay roughly two-thirds of the transportation infrastructure costs.  (The other third would be paid through County taxes and any funds coming from the state or federal government--probably none.)  In rough terms, those costs are now pegged at $3 billion in 2012 dollars and nearly $6 billion in future dollars (the dollars actually paid).  They are likely to increase.  And those numbers do not include debt service costs for bonds issued to finance specific projects.

Tysons' residents--various condominium developments in the District--are lumped in with the District's corporate commercial developers.  The proposal under consideration would force them to pay the same extra tax pro rated to their property's value as the corporations.  Unlike the corporations, however, they will not be able to pass on their added tax costs to their customers, clients, etc.--because they don't have any!  

More than a year ago, the Reston Citizens Association (RCA) approved a resolution supporting its Tysons' area counterpart citizens group, McLean Citizens Association, in calling for the developers to carry to brunt of the infrastructure development cost load, specifically 75% with the rest carried across the county.  

The infrastructure tax issue is one of fundamental fairness.  All the development in Tysons will not increase the income of its residents.  It will likely skyrocket the profits of the commercial developers in the area.  Those who profit ought to be the ones who pay the investment cost. 

As for the Reston Task Force, although the RCA representative has raised implementation and financing issues on several occasions and Reston 2020 has called for addressing these issues in its papers, the task force has so far avoided these issues all together.

While the County staff stated it did not want to make the same mistake that the Tysons staff did by including implementation and financing issues in planning discussions, the fact is that the "mistake" at Tysons was not including them in detail in the planning effort.  To have done so would have probably reduced the approved plan level of overall growth to a more realistic level.  Moreover, as a result of the failure to tackle the tough financing issues, the transportation implementation issues alone have taken more than an additional year to reach consideration before the Board.

The Reston Task Force is on course to make the same huge error the Tysons Task Force made with the implication of significant tax increases for some or all of Reston's residents.  

What Makes a Great Public Destination? Is it Possible to Build One Where You Live? The Project for Public Places, November 11, 2012

In a recent blog post, entrepreneur-turned-VC Mark Suster wrote about the necessary ingredients for a city trying o develop a successful start-up community. His advice seemed applicable to any community that’s trying to create a strong local sense of place, so we’ve retrofitted his recommendations to speak broadly to people who are working to transform their public spaces into magnetic destinations that are reflective of the diverse communities that surround them.

 Here is the list of the requirements discussed in this article from Suster's post:

• A Strong Pool of Zealous Nuts
• Place Capital
• Killer Events
• Access to Great Advocates
• Motivated Champions
• Local Press/Websites/Organizational Tools 
• Alumni Outreach
• Wins 
• Recycled Place Capital/Repeat Placemakers  
• Flagship Public Spaces 

Click here for the full article and its description of these requirements.