Landowners Vote To Tax Themselves for Rail
Board receives petition asking for additional commercial property taxes to help finance Rail to Dulles.
From the McLean Connection
By David Harrison
Oct. 30, 2003

A razor-thin majority of commercial landowners in the Dulles Corridor have agreed to raise their real estate taxes to help finance the Dulles Rail project.
On Monday, a group of landowners representing 51.12 percent of the assessed value of the corridor's commercial property presented a petition to the Board of Supervisors, asking the county to let them pay higher taxes. That represents a tenth of a percent more than the 51 percent legally required to impose the additional tax.
If the board signs off on the plan, owners of office buildings and rental properties between the West Falls Church Metro station and the Loudoun County line will pay an additional 22 cents in property taxes a year. That 22 cents will grow to 29 cents after 10 years and be phased out after 30 years, when, presumably, heavy rail will be running throughout the corridor.
The money is supposed to be used to pay for Fairfax County's share of the $3.4 billion Dulles Rail project. The first phase of the project is expected to reach Wiehle Avenue in Reston by 2009 and cost $1.5 billion. The second phase, to Dulles Airport, is not scheduled to be completed for at least a decade.
Fairfax County must pay for 15.6 percent of the rail extension with the rest of the money coming from the other localities, the state and the federal government. The state is considering doubling the tolls on the Dulles Toll Road to pay for its share.
By a vote of 9 to 1, the board scheduled a public hearing on the special tax for Dec. 8.
Many board members said they were delighted by the proposal, which, they said, represents a significant step forward in the decades-long goal of bringing rail to Tysons Corner and to Dulles Airport. Board Chairman Kate Hanley (D), who is retiring from the board to run for Congress, said the petition was "a landmark step forward."

NOT EVERYONE was as enthusiastic as Hanley. As he has in recent weeks, Supervisor Stuart Mendelsohn (R-Dranesville), who found himself on the short end of the 9-1 vote, defied the board's majority and argued that there were problems with the petition that warranted putting off the public hearing until the new year. For instance, the language of the petition said the special tax will not raise more than $625 million before it is phased out. This means that if the Dulles Rail project runs over budget or takes longer than anticipated to complete, the county may have to make up the difference, said Mendelsohn.
" Ultimately, the citizens are left holding the bag," he said.
He also said the shape of the district in which landowners will pay additional taxes was "gerrymandered" to ensure support.
Also, a provision in the petition states that the petition will have to be circulated again if the second phase of the project, from Wiehle Avenue to Dulles Airport, is not built as soon as the first phase is completed. But Tysons Corner landowners who have agreed to raise their taxes to bring rail to Tysons Corner could balk at signing another petition, raising their taxes to build rail for their competitors in the western part of the county, said Peter Johnston, an official with Boston Properties, which owns real estate in Reston and Herndon.
Johnston calls that "a poison pill."
" Why would you vote to raise a tax on yourself to build your competitors a transit system," he said.
Johnston called the petition "flawed" because it requires that landowners in the Reston and Herndon area pay for a transit system that will benefit Tysons Corner long before it benefits them. The extra tax should be phased along with the rail's construction, he said.
Johnston also noted that the petition had only garnered the bare minimum of support among landowners.
" If this is such a good deal. why don't you have 60 or 70 or 80 percent?" he asked.
Francis McDermott, an attorney with the law firm of Hunton and Williams, who is working on the details of the tax district, said there is more support for the tax than appears on the petition.

"It was not possible, with property owners being all over the world to get every signature," he said.
Mendelsohn asked that the public hearing be put off until January to work out some of these problems. Board members did not receive a copy of the petition until Friday evening, barely two days before they had to vote on it on Monday, which did not give them enough time to understand what it was they were voting on, he said.
" This sets a new land speed record," he said.
McDermott, attorney with Hunton and Williams, said it was necessary to hold the public hearing in December in order to start levying the taxes by July 2004. If the board waits until January to vote on the matter, it will have to wait until 2005 to raise the money.
" It's truly a viability of the bond issue," he said.
Mendelsohn has another explanation.
" Why else would you be pushing it through except for politics?" he said. "I assume Kate [Hanley] wants to vote on it before she leaves office."
At Monday's board meeting, Connolly, who has been sparring with his Republican colleagues for several weeks, derided Mendelsohn's concerns as "rhetorical excess."
" There is no surprise here," he said. "We've known this petition was coming for months. This is one of the longest gestations I've seen since the birth of an elephant."

WHETHER OR NOT a special tax is set up may be a moot point if the federal government does not come through with its share of the project. Under the project's financing plan, half the money to build the rail is supposed to come from Washington. But Washington is not in the mood to spring for a public transit project in one of the country's most affluent jurisdictions, said U.S. Rep. Jim Moran (D-8) who represents a large part of the Dulles Corridor.
Lawmakers in Congress "aren't predisposed to give [money] to the urban areas and particularly the Washington area," he said. "There's a lot of demand from rural areas for roads."
He added that the Chairman of the House Transportation Committee, Alaska Republican Don Young, has not shown himself to be a major supporter of the project. At the same time, there is a lot of competition from other transit systems around the country for scarce transit dollars, he said. If Congress does not allocate enough money to the project, the special tax would be eliminated and all the unspent tax revenue returned to the property owners.
Hanley agreed that getting the feds to finance the rail was "not a slam dunk" but said that the local business community's commitment, as evidenced by the petition, would help sway lawmakers in Washington.

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