Post #275: This ‘n’ that

Posted on May 15, 2019

Just a collection of a few items that I did not want to pass unnoticed.

Board of Supervisors Debate:  Tonight, 5/15/2019, from 6 PM to 9 PM, in the Community Center, come see the five Democratic candidates for Board of Supervisors member from the Hunter Mill District.  Odds are good that one of these people is going to be our next representative on the Board of Supervisors.  They will be asked a series of questions about how they would treat the Town of Vienna if elected.  Go to Post #271  to see my writeup, and go to this Facebook page to see an invitation for the event.

Wawa’s hours remain unknown — but not really. At last Monday’s Town Council meeting, Councilman Noble asked Planning and Zoning what the hours were going to be, for the new Wawa.  I thought it was good of him to be concerned.  But nobody knew.  I didn’t know.  But I now see that every Wawa in the DC area is open 24 hours a day.  As are both 7-11s in Vienna.  It’s a good bet, then, that the Wawa will be open 24 hours a day.

Projections of Town tax revenues under MAC — can we please have someone put down, in writing, exactly what you want? As an economist by trade, I can tell you, it’s not that simple and there’s no one right answer.

Some tax projections were presented at the last Planning Commission meeting, for the Sunrise assisted living facility.  They were criticized as being “not right”.  The issue isn’t the projected tax take from the new building (the Town’s numbers were similar to what I had guessed in this post (search BPOL), some months ago).  The issue is, what’s the correct baseline for comparison, so that you can figure out the additional revenue (or cost) from this new development?

And for that one, there is no one right answer.  And so it’s not reasonable to throw this question at the Town’s finance department without clear guidance as to what you want.

In my opinion, you need to see two or three different baselines to understand what the likely benefit or harm to the Town’s revenues would be from accepting any one particular project.

First, obviously the Town should show the expected revenues from the new project.  If there are retail sales of goods, or meals, some estimate of the Town’s share of local sales tax and the meals tax revenues should be included in that.

Next, I think the Town should show plausible revenues from the existing commercial (“by-right”), construction, which should have two parts.  Part 1, what was literally the tax take from this property, last year.  This disregards (e.g.) that the businesses may have shut down.  Part 2, what was the historical tax take from this property back when the businesses were healthy?  That might be defined empirically as the maximum tax take in any year in the past decade, inflated up to the current year using (most likely) the average annual increase in Town tax revenues (or similar) between the “healthy business” year and the current year.

This estimate might require the cooperation of Fairfax tax authorities, because Fairfax is the entity that collects the “income tax return”-type information from the property owners.  So, e.g., Fairfax may know more than we do about the revenues generated by those properties in the past.

Note that, up to this point, this is all reasonably objective data.  Plus or minus some judgment as to when the businesses on that land were last “healthy”, these are all things that can either be directly looked up, or estimated using some standard set of methods and assumptions.

But in addition, I think there should be one more scenario: Revenues under the best economically-viable “by-right” redevelopment of the property.   I.e., what would the tax take be under the best likely use of the land if there is no MAC redevelopment.

The “by-right” scenario has been so mis-used in the analysis of MAC so far (once for scare tactics on traffic for 444 Maple West, once for scare tactics on building size for 380 Maple West) that I hesitate even to bring it up. So, if the Town is going to continue to see that as merely an opportunity for scoring points, then forget it.

But, plausibly, this could be used as a way to rein in the “by-right” scenario by making it conform to some set of rules.

If nothing else, you could just average up all of Maple commercial property on a per-acre basis, multiply by the number of acres in question, and present that under the assumption that, hey, on average, new “by-right” would do about the same as existing “by-right”.  Likely, that understates what new construction should be able to generate (you’d create something to match current demand, not something that worked well decades ago).  My only solid point here is that a complete analysis of the economic benefits should include, if possible, a thoughtful and well-reasoned analysis of the best economically-feasible by-right development.

Finally, because the MAC projects include a housing component, a proper analysis ought to include both other revenue impacts (e.g., water and sewer bills, less the Town’s cost for the water), and some estimate of additional costs that the new residents might impose on the Town.  My guess is that these will likely be either too small to worry about, or too nebulous to pin down.  And so, those should be presented in a separate set of figures.  That said, if we are looking at the potential for (e.g.) 7000 new residents (70 out the 100+ MAC acres redeveloped at an average of 100 persons per acre), in the long run, you have to include some consideration of additional costs in serving that additional population.

FWIW, if you look at Falls Church’s economic analysis of tax revenues per acre, from various types of development, assisted living is very close to dead last.  I believe that’s because Falls Church collects all of the local sales tax revenue, and there is no sales tax on services.  I’m not sure how that would work out for Town of Vienna.

If you want to see some data on assisted living in Fairfax County, see Post #205.