Independent public-purpose facilities or public facilities within private-sector developments

Broad Street in Richmond, Virginia
• Active result: Convention Center, Marriott and more

703-246-6500

• Allows special assesments or special real estate taxes to finance public infrastructure, such as the construction of roads, streetscape improvements, parking and utilities
• Requires a petition signed by 51 percent of the area's landowners (by land area or assessed value)
• Special real estate taxes or a special assessment within the CDA can provide for services and public investment over $3 million, which is not to exceed 25 cents per hundred of assessed value unless petitioned each year by all property owners in the district
• Issues revenue bonds, including bonds with installment payment features for up to 40 years
• CDA notes stand ahead of bank financing and equity; security in bonds comes from the real estate
• The Board of Directors of the CDA would be appointed by the Board of Supervisors from among property owners in the CDA district
• . (See Appendix for a case study on the Broad Street CDA in the City of Richmond.)

Opportunities:

• CDA obligations would not be included within bonded indebtedness ceilings for Fairfax County
• Security for CDA bonds rest in the real estate itself; CDA notes also stand ahead of bank financing and equity
• The district can also commit future revenues generated by facilities owned and operated by the CDA
• Possible future use for CDAs in conjunction with tax increment financing.

Limitations:

• Uncertainty remains: i.e., The “Short Pump” legal challenge (Short Pump Town Center Community Development Authority v. Taxpayers, Henrico Co. Circuit. Court) was vacated and dismissed by the State Supreme Court on November 2, 2001. The summary of the Court’s decision says: “Because a community development authority was not authorized to bring a bond validation action under the Public Finance Act, the judgement of the circuit court invalidation of a bond issuance undertaken to finance development of a retail shopping mall is reversed, and action is dismissed.”
• The 2002 General Assembly did not take any corrective action to allow CDAs to be treated as entities or extensions of local government who would be able to seek bond validation suits.

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