Updates from Letty – June 15, 2018

Posted on by Letty Hardi

Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council 

Dear Friends,

This week, we had one of the most momentous meetings in awhile, likely since the FY19 budget vote in the spring. For those following the Founders Row development project, we passed it at a (new) first reading. Read on to understand what this means and what happens next, especially if you’d like to share your feedback with us before our final vote. For those new to how we analyze fiscal benefit in development projects (among many other considerations), do read on.

We also voted on the downselect of the 6 proposals for the West Falls Church campus project to a shortlist of 3, and we authorized the City Manager to issue the next phase of the RFP to those 3 bidders. Together with the construction of a new high school, this will be the biggest undertaking in the city to date. With those decisions behind us, we have a small lull until the 3 finalist bidders submit their detailed proposals to us at the end of the summer.

Happy summer to fellow parents with FCCPS students! Two important callouts for the official first day of summer next week:

Best,
Letty

 

What Happened This Week:

(1) Founders Row

With two previous work sessions on the revised application for Founders Row already, our decision this week was whether to send the project to board and commission review and public hearings before a final, second reading in August. As you recall, the main change since our original 2016 approval is a swap of 72 age restricted/senior apartments in lieu of the hotel. The developer has also recently lengthened the term of the affordable dwelling units (ADUs) from 20 years to perpetuity and added another 5K square feet of restaurant space to 25K square feet total.

The key discussion was around the fiscal impact of the new, revised project. Besides revitalizing our commercial corridors, a large benefit of mixed use development is the positive fiscal benefit and diversification of our tax base. Mixed use projects contribute a benefit of approximately 7+ cents on the tax rate (see my 2017 FAQs post).

Based on the various fiscal model analyses done for Founders Row since 2016, here are a few key takeaways:

  • The original 2016 fiscal impact was between $1.3M-2M, which is approximately 3-5 cents on the property tax rate. The change from a hotel to an age restricted apartment results in an approximately 20% decrease in net annual fiscal impact, which were the numbers we reviewed in recent work sessions.
  • However, the model has been re-run as we’ve had two projects come online since the original 2016 approval. With the Harris Teeter/301 W. Broad and Lincoln/Target buildings now occupied, we have real data on operating costs for how many people and students live in the 500+ units in those two buildings (November 2017 school data shows 19 pupils at Lincoln and 27 pupils at 301 W. Broad after stabilization). That new data and updated inputs were used for the Broad and Washington project we analyzed and approved recently this spring, so the same methodology was re-applied to Founders Row and a new model run was conducted.
  • In the most recent model run, the new annual fiscal impact for Founders Row, even with the change to age restricted housing, is $1.7M to 2M in net annual impact, which is between 4-5 cents on the property tax rate. You’ll notice that it’s a much tighter range than 2016’s numbers because of the better data on pupil costs we now have. The details of the new fiscal analysis is available here.
  • It was also insightful to see a comparison of Founders Row vs the built/approved mixed use projects.
    • One of the concerns with the revisions to Founders Row is the decrease in commercial %, from 67% residential/33% commercial when we had both hotel and theater anchors to 82%/18% with one theater and then the conversion of the hotel to senior apartments. From the chart, you can see that the % of commercial from 10 projects across the city varies from 7% to 33%, with no direct correlation to the fiscal impact. In other words, higher commercial % and lower residential % doesn’t necessarily mean more net revenue.
    • Because each project varies in size, we usually use net fiscal revenue per acre as the metric to compare projects. With the revised fiscal analysis for Founders Row, the net fiscal revenue per acre will be the highest out of all mixed use projects in the city, if the projections come to fruition.

Letty’s thoughts:

For me, the fiscal impact was a key threshold question for the revised project to progress at first reading. That doesn’t mean there aren’t other improvements many of us would like to see in the final iteration, but given that the analysis showed that the projected revenues were very compelling, I voted to move the project forward so we can hear comments from our boards and commissions (the final vote was 5-1-1: 5 yes, 1 no, 1 abstention). As I said in my comments: mixed use, density, apartments and residential should not be bad words. Yes we would like to add more commercial revenue to diversify our tax base. If a 100% commercial project is submitted, we’d likely approve it at lightning speed! However that is not what the market wants to build currently. Good mixed use is actually important urban planning strategy for the future of our city and many urbanizing areas. Our vision to be a walkable, vibrant community with a mix of interesting restaurants and retailers requires more people living and working here to sustain those businesses. Businesses can’t thrive without a daytime population or enough customers patronizing their business. Mixed use also has environmental and transportation benefits; the more people who work and live in an transit oriented area, the less cars and long commutes we’ll have. The DC area will always have the outer suburbs, but if we can create more and diverse housing types here, businesses are better able to hire workers who have shorter commutes which in turns makes it more desirable to locate here. (The same argument applies for workers of all kinds – if we had more housing stock for teachers, for example, that would be an attraction to teach in FCCPS.)

I did offer few words of “scolding” to the developers. I did not want to see any more 11th hour submissions to the project especially with summer schedules upon us. The project is important and impactful enough that the public deserves adequate time to review before a vote. Also, I’d like to see better neighborhood engagement so that their concerns are heard and there is thorough opportunity to address them. Finally, given that we have waited 2.5 years for the theater lease to be signed since the original 2016 approval, I am not wed to the final approval date in August as proposed and would rather we get have enough time to get it right.

What are your thoughts? You can email all of City Council at cityclerk@fallschurchva.gov and/or speak during public comment at our regular meetings. Now that the project is in the hands of the boards and commissions, we’ll publish a schedule for when Founders Row will be discussed in those meetings if you’d like to attend and speak to those groups directly, as they’ll be making recommendations for revisions to Council before August.

(2) Downselect for West Falls Church Project & RFPD Issuance

Out of the 6 proposals received, we voted on Monday to downselect 3 to proceed to the next phase: Comstock, EYA, and Rushmark. We have been fortunate to receive proposals from so many qualified and outstanding teams. I encourage you to at least skim through the proposals online (not much has been redacted for confidentiality), as the 6 proposals represent real data points of what the market would like to do with the site, especially in context of adjacent neighborhoods, transit, economic cycles, etc. We also continued discussion on the next RFP – termed RFDP (detailed proposals) especially around affordable housing and environmental requirements and authorized the City Manager to release the RFDP to the 3 shortlisted proposers at the end of this week.
(3) $15M Transportation NVTA Grant

Late breaking, good news! Thanks to strong grassroots efforts, our application for $15.7M to improve the Haycock/Shreve/Broad and make it more safe and walkable (which ultimately provides regional congestion relief), was approved by the NVTA last night! See my April post for a recap of what the grant money will fund.

 

What’s Coming Up:

(Council’s summer schedule – we will be off the first two weeks of July and the second two weeks of August):