With property assessments and resulting tax revenue stagnant, changes could be coming to Arlington’s trio of business improvement districts, better known as BIDs.
It remains to be seen what, if anything, might shift. Danette Nguyen, CEO of the Ballston BID, told County Board members that her organization is not currently interested in any changes to the tax-revenue status quo.
“We have not explored increasing the tax rate,” she said during a March 26 work session focused on economic development.
But the organization is considering the possibility of expanding its boundaries to capture other parts of the Ballston community beyond its existing 25-block area.
Such an expansion would have precedent. In 2019, County Board members widened the boundaries of what was then the Crystal City BID to incorporate 80 parcels in the nearby Pentagon City and Potomac Yard areas. A year later, the organization was renamed the National Landing BID.
Any changes — to boundaries or tax rates — would require County Board action, and would be addressed after county leaders get through this year’s budget process.
“After the budget is done, there may be a desire for some meetings that would explain this whole piece in detail,” County Board Chair Matt de Ferranti said.
At the meeting, county officials touched on potential changes coming to the Ballston, National Landing and Rosslyn BIDs, each of which is largely funded through a real-estate tax surcharge on properties within defined boundaries.
Commercial properties represent the core of each district. With vacancy rates elevated, property valuations diminished and the tax surcharge unchanged, each has seen lower revenue in recent years — with further declines expected this year.
Any potential changes would have to bubble up from the organizations themselves, County Manager Mark Schwartz told Board members.
“We do take our lead from the BIDs on that conversation,” he said.
Over the past decade, Schwartz said, tax rates for the three organizations have held steady.
“Their intent is to try and have some stability,” he said. “They try to adjust to the circumstances.”
At the March 26 work session, a number of Board members wanted to get information about the process well in advance of any actual proposed changes.
Board member Maureen Coffey noted that changes to the Crystal City BID’s boundaries predate all but one Board member, and discussions about changing tax rates last occurred before any of the five incumbents came to office.
“How do we even go about having that conversation, if we even want to?” she asked. “It really hasn’t happened in so long.”
Shannon Flanagan-Watson, a deputy county manager, promised a future tutorial on the topic.
“There is a whole process that is laid out,” she said. “We are happy to follow up in a written response that lays all that out.”
Under the fiscal 2027 budget set for adoption later this month, tax rates and anticipated revenue for the three BIDs are:
- Ballston: A tax surcharge of 4.5 cents per $100 assessed valuation, bringing in $1.05 million
- National Landing: A tax rate of 4.3 cents, totaling $4.9 million in revenue
- Rosslyn: A tax surcharge of 7.8 cents, adding up to $3.99 million
The funding, coupled with event and membership revenue, is used to provide district-specific services ranging from marketing and special events to trash cleanup.
At this point in the fiscal year 2027 budget development cycle, existing tax rates are probably locked in. For future years, organizations can put options on the table, Schwartz said.
“I don’t think they’ve ever ruled out the possibility of either lowering or raising the rate when there’s, I’ll say, generational issues they need to deal with,” he said.
The proposal to potentially expand the boundaries of the Ballston BID is “not a state secret,” but has not been vetted publicly, de Ferranti said.
Discussion of potential boundary changes for the Ballston BID could come when the organization’s board of directors next meets. That gathering is currently slated for May 20.
Discussion with stakeholders would be valuable, said Board member Takis Karantonis, as the Ballston area operates with “a dissonance between a very successful retail environment” and “always the weakest office market in Arlington.”
“Chronically, [we] haven’t been able to attract tenants,” he said.
Before coming to elected office, Karantonis headed the Columbia Pike Partnership, then known as the Columbia Pike Revitalization Organization.
The group operates like a business improvement district and receives government support to augment member dues, but does not have dedicated tax funding to support its efforts.
