New Dulles Rail Financing Plan Unveiled

A group of commercial landowners in the Reston-Herndon area has a plan for a special real estate tax to finance Fairfax County's portion of the cost of the second phase of Metrorail's planned extension to Dulles International Airport.

The Western Alliance for Rail to Dulles has proposed that commercial property owners pay the tax in three stages and that revenue from the tax be capped at $214 million.
The plan also builds in money-back safeguards for the property owners in the event the second phase of the project falls apart or is not funded by the federal government. Commercial property owners in the Tysons Corner area already have agreed to a tax to pay for the project's first phase from West Falls Church to Tysons Corner. The second phase would go from Tysons to Reston, Herndon and the airport.
Members of the alliance said the plan, in the form of a petition, will be circulated among commercial property owners soon. The alliance needs 51 percent of the owners to sign the petition before it can go before the Fairfax County Board of Supervisors for consideration.
"There is no time frame for gathering the signatures," said Jeff Fairfield, the vice president of the alliance and a trustee for Launders Trust, a charitable trust with land holdings along the rail route. "I think we are all going into this with open eyes. This is not something you can accomplish in a week or two. This takes months."
The plan calls for an initial tax rate of five cents for each $100 of assessed value that would go into effect when the first phase of the project received federal funding and regulatory approval, according to a summary of the plan released by the alliance.
The second of three tax rates would be 22 cents for each $100 of assessed value and would kick in if the Federal Transit Administration recommended to Congress funding the plan for rail service from Tysons to Dulles. The third tax rate -- as much as 29 cents for each $100 of assessed value -- would begin if the second phase of the project received federal funding and regulatory approval.
"This is another piece of good news for rail to Dulles," said Gerald E. Connolly (D), chairman of the county Board of Supervisors. "We are almost finished with preliminary engineering studies, we have one tax district in place already collecting revenue and, hopefully, we will get another in the western portion of the district approved."
Ken Reid, leader of a group that supports a dedicated busway, arguing it would be cheaper to build and just as efficient as rail, said: "I think the fact that they want to start at five cents per $100 and scale up shows that they are pretty much confident that the project is not going to be built in the second phase. And I don't blame them. There is a lot of consternation about the first phase."
The cost of extending Metro's Orange Line from West Falls Church through Tysons Corner and to Dulles has been estimated at as much as $2.4 billion, although last month project managers made revisions to the plans to reduce the projected cost to $1.8 billion.
Planners of the 23-mile rail line have split the construction project into two phases out of cost concerns. Half of the money would come from the federal government, about one-fourth from tolls on the Dulles Toll Road and other state revenue, and one-fourth from commercial property owners along the route.
Property owners in the tax district along the route for first phase of the project have agreed to pay an extra 22 cents for each $100 of assessed value this year and coming years to finance the county's portion of the bill.
Property owners in Reston and Herndon did not want to be included in the Tysons tax district and formed their own group. For more than a year, they have been working on a plan and negotiating with the county to form their own tax district.
"It has been extremely difficult because I don't think we have ever had a tax district where the project is so far in the future," said Mike Cooper, a founding member of the Western Alliance for Rail to Dulles and senior vice president of Prentiss Properties Trust, which owns a significant amount of property in both special tax districts.
Getting the necessary number of signatures on the petition will not be easy, Cooper said, because "a lot of our landowners are sitting in offices in other cities, and those who have to sign the petition might not be intimately familiar with our politics. There is also a lot of turnover in the properties in the Dulles corridor now, and so just tracking who owns what property now is difficult in itself."
The precedent for special tax districts comes from a plan in the 1980s to pay for widening Route 28. Property owners along the route, frustrated by the state's inability to fund the project, created a special tax district to help pay for widening.
Commercial property owners along the proposed Dulles rail line say the expansion to the airport is an important step in easing Northern Virginia's transportation woes.
"We have a pretty desperate transportation situation," Cooper said. "I think all of us agree on that, and this is an important step. It will not solve our problems but is one piece of the puzzle and an important piece of the puzzle."
Peter Johnston, a senior vice president at Boston Properties Inc. and one of the alliance's organizers, said that the alliance's board members represent about 40 percent of the assessed commercial taxpayers in the district and that that should give the group a jump start in getting signatures.
"I'm happy with it [the plan]," Johnston said, "and I will be very happy when it is all signed, sealed and we are back to doing real estate again. It is a somewhat extraordinary thing to ask people to tax themselves, and I think this is a recognition on the part of the landowners in Tysons and in the western district that if we don't do something to solve our traffic problems we are going to choke on our own success."

By Steve Fehr |  September 22, 2005; 5:16 AM ET  | Category:  Transportation
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