Arlington, VA

Morning Notes

Pentagon City Redevelopment on Pause — “Brookfield Properties has suspended plans to launch a major redevelopment of the Transportation Security Administration’s headquarters in Pentagon City once the federal agency moves to its new home in Springfield in mid- to late 2020… it’s a reflection of the new reality that Amazon’s HQ2 has created in the neighborhood.” [Washington Business Journal]

Vote on Add’l Speeding Fine This Weekend — “Currently, a ticket for going 10 mph over the speed limit in a residential zone is about $80. The additional fine would bring that ticket to $280. ‘People drive like maniacs around here. It’s about time they got some punishment,’ Arlington resident Jack Feegel said.” [NBC 4]

Arlington Resident Helps Return Lost Dog — “A lost dog was reunited with its owner thanks to a passing motorist, who noticed something unusual on their way to work, and a fellow driver farther along the road. Dashcam footage shows the unnamed motorist, from Arlington, Virginia, driving to their workplace in Silver Spring, Maryland, on January 13.” [Daily Mail]

ACFD Responds to Calls in Maryland — It’s rare for the Arlington County Fire Department to respond as mutual aid to an incident in Maryland, but it happened Wednesday morning, with several units dispatched to Prince George’s County. [Twitter, Twitter]

Arlington Tourism Tax May Be Made Permanent — “The Arlington County government looks ready to get a major present from the new Democratic majority in the General Assembly. The state Senate has passed and sent to the House of Delegates a measure that removes the sunset provision on Arlington’s authority to impose a 0.25-percent surcharge on hotel taxes to support tourism promotion.” [InsideNova]

Nearby: No Streetcar in Georgetown — “Plans to extend the DC Streetcar to Georgetown have been effectively scrapped. The District Department of Transportation is halting all work on the project ‘for the foreseeable future,’ according to documents submitted to the D.C. Council.” [WTOP]

Flickr pool photo by Rex Block

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The rise in property values in Arlington is accelerating post-HQ2.

Late last week Arlington County announced that its assessments for 2020 had risen 4.6% on average — 4.9% for commercial properties and 4.3% for residential properties. That compares to an average property assessment increase of 3.5% last year.

The rise in property values will almost certainly mean a rise in property taxes for Arlington residents. The county, in its announcement, seemingly discounted the idea that tax rates — currently $1.026 for every $100 in assessed value — would come down to offset the rising assessments.

“Although the growth will result in additional revenue, the County faces continued funding choices in the coming fiscal year,” the county’s press release says in the first paragraph. In November the County Board directed County Manager Mark Schwartz to propose a budget that either keeps the tax rate steady or slightly lowers it; his budget proposal will be released in February.

The county says Amazon’s arrival is at least partially responsible for rising property values, though apartment buildings accounted for much of the commercial assessment increases.

Commercial property values were driven by a decline in the office vacancy rate, continued new construction, demand for rental properties, and Amazon-related leasing activity. Apartment property values increased by 8.9 percent, office values increased by 2.5 percent, and general commercial property (malls, retail stores, gas stations, etc.) grew by 1.8 percent.

“Arlington continues to be a place where people want to live and work,” Schwartz said in a statement Friday. “The investment we make in our community through real estate tax revenue helps us maintain the high-quality amenities and public services that make Arlington so attractive.”

The full press release is below, after the jump.

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(Updated at 4:15 p.m.) Arlington County Board Chair Christian Dorsey says he should have, upon reflection, informed the community about his personal bankruptcy filing before November’s election.

Dorsey, who was sworn in for a second term last night, answered a series of questions from ARLnow about his bankruptcy, which was first reported by the Washington Post a few days after the election.

The Post reported in November that Dorsey, 48, “filed for bankruptcy last month after falling behind on his mortgage and accruing tens of thousands of dollars in credit card debt.” The paper noted that the bankruptcy filing came as Dorsey’s South Arlington home was facing possible foreclosure and as his wife dealt with health problems.

Questions have arose in the wake of the bankruptcy revelation. For one, given that the filing was made on Oct. 16, should voters have been informed prior to the Nov. 5 election?

Dorsey tells ARLnow that he now regrets not letting people know despite how personal the issue is for him and his family.

“In retrospect, I should have had a conversation with the community, no matter how difficult, when I filed for bankruptcy in mid-October,” Dorsey said via email Thursday evening. “I do believe, however, that I will demonstrate over the next four years that those who voted for me did not make a mistake.”

Dorsey was also asked about an assertion made by the bankruptcy trustee that he had not submitted his previous year’s state income tax return. Dorsey contended that he did, in fact, file his state taxes.

“I filed, yet I discovered at my bankruptcy hearing that the Commonwealth has no record,” he said. “I have resubmitted my 2017 filing.”

(By law, Virginia’s state tax office is prohibited “from providing information or commenting on specific taxpayer situations,” a spokeswoman said.)

Court documents show that Dorsey expects $5,000/mo in “other income” besides his annual County Board salary of just over $60,000. The bankruptcy trustee objected to that, writing that the $5,000/mo figure “has not been documented or verified.” Dorsey says that income comes from consulting work.

“I do policy and communications consulting,” he said. “I am not comfortable talking about my clients within the context of your article, but attest that they are exclusively 501(c)3 non-profits, political non-profits, philanthropic foundations and universities.”

“None are foreign entities,” Dorsey added. “None do business with Arlington County. None have given to my political campaigns.”

Dorsey’s most recent conflict of interest form filed with the Clerk of the County Board discloses outside work with a pair of firms that paid him more than $5,000 annually: KNP Communications and Upswing Strategies, both in D.C.

Though serving on the Arlington County Board is ostensibly a part-time job, Dorsey’s work for Arlington extends beyond the County Board dais to representation on a number of regional bodies. Dorsey serves on the Washington Metropolitan Area Transit Authority (WMATA) Board, is a commissioner on the Northern Virginia Transportation Commission (NVTC) and represents Arlington on the Board of Directors of the Metropolitan Washington Council of Governments (COG).

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(Updated at 12:05 p.m.) The Arlington County Board is asking the County Manager for a budget that contains no property tax rate hike and maybe even a rate cut.

Members gave their Fiscal Year 2021 guidance to County Manager Mark Schwartz at last night’s recessed Board meeting.

The guidance for reducing the tax rate or keeping it steady will likely not, however, result in lower tax bills, as property assessments are expected to continue to rise in the wake of Amazon’s arrival. The average real estate assessment is expected to jump 4-6 percent next year.

A budget forecast paints a rosy picture of Arlington’s post-HQ2 economy, with business tax revenue expected to grow as well, though budget pressures of Metro, county employee compensation, needed stormwater improvements and flood mitigation, and a growing school population remain.

The Board also took action last night on the affordable housing front, asking the manager for options that could hike the county’s annual Affordable Housing Investment Fund contribution to as high as $25 million from the current $16 million. Additionally, the Board largely accepted Schwartz’s recommendation to carryover unspent funds from the last budget to the new budget and to reserve funds, but set aside $500,000 for emergency housing assistance.

“The Board understands that anticipated increases in property assessments could have a real impact on residents,” Arlington County Board Chair Christian Dorsey said in a statement. “We want the Manager to come back to us with a proposed budget with no increase in property tax rates and to consider a reduction in the tax rate if possible. Our guidance to the Manager also emphasizes the need to invest more in preserving and creating affordable housing in Arlington, including housing affordable to extremely low-income families.”

The manager will present his proposed FY 2021 budget in February, after a months-long public budget process, which will then continue through the Board’s budget adoption in April.

More from an Arlington County press release, after the jump.

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Morning Notes

Amazon Tweaking HQ2 Heating Plan — “Amazon.com Inc. confirmed it will tweak some elements of its HQ2 plan in Arlington County to eliminate a carbon dioxide-emitting system. The news comes a little more than a week after CEO Jeff Bezos announced in D.C. plans to end the company’s reliance on fossil fuels in a decade.” [Washington Business Journal]

County Tax Deadline Coming Up — “Taxes are due soon! If you have moved or sold your car, you may still owe taxes for the months when your car was in Arlington. If you are waiting for account adjustments, still pay your bill in full by Oct. 5. Overpayments will be refunded.” [Twitter]

Video: Ovi at ATS — Arlington Public Schools has released a video from Caps star Alexander Ovechkin’s recent visit to Arlington Traditional School. “Hi kids, I think it’s breakfast time for you, no?” Ovechkin asked as he pushed a grocery cart full of Ovi O’s cereal into a classroom. [Vimeo]

Dorsey to Talk Racial Equity at Church — “Christian Dorsey, Chair of the Arlington County Board, will be speaking about racial equity at Rock Spring Congregational United Church of Christ, 5010 Little Falls Road, at 7:00 p.m. Monday, October 7.” [Press Release]

New Daycare Center Near Fairlington — “As Alexandria struggles with affordable daycare, a new facility is in the works near the Fairlington neighborhood. A special use permit has been filed for Our First Step Daycare Center, a new daycare center planned for 2500 N. Van Dorn Street.” [ALXnow]

Ever Have a Dream Like This?Updated at 8:35 a.m. — “Scanner: Police responding to S. Four Mile Run Drive for a report of a naked woman who walked on to an ART bus then walked right back off.” [Twitter]

Flickr pool photo by John Sonderman

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Local bookstore One More Page (2200 N. Westmoreland Street) will be able to pay the bills after all, thanks to its auction last month.

“We received donations of wine, window washing service, and many other items,” said owner Eileen McGervey, of the items the store auctioned off. “It was really quite overwhelming.”

In total, the online auction raised $20,374.32, passing its goal of $20,000.

The highest bid item was an original cartoon by the late Richard Thompson, which was donated by his wife Amy Thompson — it sold for $1,111.50. The item the fetched the second highest bit was naming rights to a character in the the Wine Country mystery series by Ellen Crosby, which sold for $725.

McGervey described the auction as a “wonderful success” to ARLnow and said the money raised was enough to cover the vendors she wasn’t able to pay after the building owner raised her rent by 30 percent in July. The spike in rent was caused largely by changes to the county’s real estate valuation method for the type of condominium building that houses One More Page.

The building’s property tax liability more than doubled this year, even after an appeal that knocked $700,000 off the valuation.

Arlington County Board Chair Christian Dorsey tells ARLnow he has been working with the parties involved to try to make sure One More Page could meet its obligations and stay in business.

“Shortly after this issue raised itself in the public eye, I spoke with the owner and we tried to see what we could do and what would be available,” Dorsey said.

Dorsey encouraged any small businesses affected by the real estate valuation change to contact Arlington Economic Development’s BizLaunch division.

Dorsey said he was “deeply sympathetic” to the bookstore’s plight, noting that the establishment is one of his family’s favorites. But he added that the valuation changes was necessary because “for years we were not taxing at the appropriate levels, which create larger issues of equity.”

In the meantime, McGervey said that the bookstore is looking into holding more events to help it stay afloat. She’s also started a Patreon membership program after would-be auction buyers said they were interested in supporting the bookstore that way.

“The whole experience has invigorated us and our customers to make sure we stay here,” McGervey said.

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Morning Notes

Arlington: Most Competitive Housing Market in U.S. — “The most competitive U.S. housing markets are the two that are closest to Crystal City, home of Amazon’s upcoming second headquarters (HQ2) in Virginia: Alexandria and Arlington. This is according to the latest ranking of cities by Redfin Compete Score.” [Redfin]

County Hits Record Low Tax Delinquency — “Treasurer Carla de la Pava announced that the delinquency rate for real estate and personal property had fallen to 0.177 percent, down from 0.21 percent a year before and the lowest not just in county history, but perhaps the lowest ever among any jurisdiction in Virginia history.” [InsideNova]

AWLA Hosts Successful Adoption Event — “40 cats and 14 dogs found their forever homes at [Saturday’s] Clear The Shelters event! Thank you to everyone who found space in their hearts and homes for our animals today.” [Facebook]

Flickr pool photo by Erinn Shirley

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A local bookstore is holding an auction to raise money after the owner says rent increased by 30 percent this year due to property tax changes.

One More Page Books, located in the East Falls Church neighborhood at 2200 N. Westmoreland Street, is hosting a silent auction fundraiser from Friday, August 2 at 6:30 p.m. until Sunday, August 18 at 5 p.m. The bookstore is currently finalizing the item list, which currently ranges from artwork and chocolates, to bike tours and book manuscript consults.

Owner Eileen McGervey said she was excited for the auction, which kicks off with the store’s regularly-scheduled wine and cheese party Friday night. She told ARLnow that customers came up with the idea of the auction, which has since gathered items like handmade shawls and a dinner with media members who cover the Capitals.

The auction was arranged after McGervey said the landlord informed her last month that the real estate taxes for the building went up significantly. The end result? A 30 percent rent increase, applicable to the current year.

McGervey said that’s a challenge for the independent bookstore not only because it operates on small profit margins, but also, “unlike other businesses we don’t have the option of raising the prices because books come with prices on them.”

The tax hike was the result of the county changing the way it calculates the value of some commercial buildings, like the mixed-use commercial condo building One More Page inhabits. The change more than doubled the assessed value of One More Page’s space — and thus also its assessed taxes — even after it was lowered on appeal.

(That’s on top of the County Board approving a real estate tax hike which increased the amount owners pay by two cents for every $100 in assessed property.)

“Unfortunately, in the case of the condominium that houses One More Page, this meant an increase in the assessed value of the property from CY 2018 of $2,351,100.00 to a CY 2019 valuation of $5,591,100.00,” Board Chair Christian Dorsey wrote in a letter to McGervey, who had asked if the Board could offer any assistance to the bookstore.

Dorsey continued:

This is indeed a large jump in the assessed value of the building. The County is bound by the Constitution of Virginia and State Code to assess all real estate at fair market value, and this methodology provides a more accurate assessment of commercial condominium values than did the previous. This methodology took into consideration the actual income and expense data submitted by the owner of the property along with similar condominiums in Arlington.

While the owner chose not to appeal the assessment with the County’s Board of Equalization this year, the owner did file an administrative appeal, resulting in a $700,000 reduction in the CY 2019 assessment, to $4,907,500. With the assessment reduction, the total tax bill for the building in Calendar Year 2019 is $56,485.00, up from $26,228.67 in CY 2018.

One More Page has been able to cover the rent raise in the past month, but at the expense of paying some of its vendors. Asking for help covering these bills is awkward, McGervey said, but better than the alternative.

“You don’t want to just be gone one day and have people not know that you could have been there,” McGervey said.

She noted that she’s now exploring the idea of a membership program to cover future rent needs.

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Virginia’s annual sales tax holiday is set for this coming weekend.

Gov. Ralph Northam (D) announced this week that the tax-free weekend will last from this Friday, August 2 through Sunday, August 4. Shoppers can take advantage of it by purchasing items like school supplies and back-to-school clothes, as well as emergency equipment to prepare for hurricane season and energy-efficient home appliances, without the added expense of a sales tax.

“The annual sales tax holiday makes many important items more affordable for Virginians as they get ready for the new school year or stock up on basic supplies,” said the governor in a statement.

Per the governor’s statement the following items will be sold sans tax:

  • School supplies, clothing, and footwear:
    • Qualified school supplies – $20 or less per item; and
    • Qualified clothing and footwear – $100 or less per item.
  • Hurricane and emergency preparedness products:
    • Portable generators – $1,000 or less per item;
    • Gas-powered chainsaws – $350 or less per item;
    • Chainsaw accessories – $60 or less per item; and
    • Other specified hurricane preparedness products – $60 or less per item.
  • Energy Star™ and WaterSense™ products:
    • Qualifying Energy Star™ or WaterSense™ products purchased for non-commercial home or personal use – $2,500 or less per item.

In 2015, Virginia General Assembly combined three different sales tax holidays into one, long weekend event.

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A pair of commercial property tax hikes in D.C. may drive additional economic activity in Arlington, according to a new report.

Commercial real estate services firm JLL says higher commercial property taxes in the District — a 2.2% hike from $1.85 to $1.89 per $100 of assessed value — “will cause rent paid by office tenants to jump further, at a time when the market’s supply-demand paradigm strongly favors tenants.”

The report also says an approved 72% increase in the District’s deed transfer and recordation tax will cause commercial property sales activity to “grind to a halt in the mid- to long-term.”

The new taxes will take effect Oct. 1, at the beginning of D.C.’s new fiscal year, as part of a $15.5 billion budget that includes new investments in affordable housing.

Between D.C. making itself more expensive for commercial property owners and lessees, and the arrival of Amazon’s HQ2, JLL says conditions are ripe for increased economic activity in Northern Virginia and Arlington, in particular.

DC’s losses will be Northern Virginia’s gains. These tax hikes come at a time when Northern Virginia is heating up as an investment alternative to DC. Transaction costs were already substantially lower in Arlington County than in Washington, and now will be even more so. It is no stretch to say that this will attract capital away from DC and toward Arlington’s top-tier offerings, of which there will be many when HQ2-related demand spurs the development of new buildings and the lease-up of old ones.

Bisnow, which first reported on the study, quoted JLL Managing Director of Research John Sikaitis as saying the new dynamic could drive increased investment interest and office leasing in Arlington.

With the increased taxes on commercial property sales making deals harder to pencil in D.C., the JLL researchers expect investors will begin to look across the river. Northern Virginia has traditionally not been viewed as the same type of core market as D.C. in the eyes of outside investors, but an improving office market and expected growth from Amazon HQ2 has them taking a closer look.

“No one denies now that Arlington is a core market with a significant amount of future urban demand,” Sikaitis said. “You’re now seeing institutional investors start to look at Arlington from an investment perspective, which didn’t happen 12 or 24 months ago. Their allocation to D.C. could be allocated to Arlington.”

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Morning Notes

Another Water Main Break in Courthouse — “Emergency Water Main Repairs: Crews working on a 6-inch valve leak at 1315 N Barton St. Traffic is detoured around the work site. At least one high-rise building is affected.” [Twitter]

Business Owners Planning for HQ2 — “Dawson and Bayne said Highline is ‘a happy-hour machine’ during the week, thanks to the office buildings that surround it. But business late at night and on weekends isn’t as steady. The impending arrival of Amazon, however, is causing the business partners to rethink Highline’s concept.” [WTOP]

Break-in at Overlee Pool — “At least seven community pools were the targets of theft or vandalism late Sunday into Monday, according to police and pool managers. The crime spree spanned Fairfax and Arlington counties, yet police have not been able to connect all seven cases to the same set of suspects.” [Fox 5]

Workers Striking at DCAUpdated at 9:25 a.m. — “Several union workers for two major airlines are on strike outside of Reagan National Airport on Thursday. The workers are employed by the Delta contractor Eulen Airport. Roughly six employees protesting tell ABC7 they are not being treated fairly by their contractors and are calling for better working conditions with some claiming they don’t receive lunch breaks.” [WJLA]

Levine Challenger Fails to Qualify for Ballot — “He had an opponent, then he didn’t. And as a result, Del. Mark Levine (D-45th) is home free in the Nov. 5 general election.” [InsideNova]

Nearby: Falls Church Mayor on Tax Deduction Changes — “Mayor P. David Tarter testified yesterday before the House Ways and Means Subcommittee on Select Revenue Measures about the impact of the cap on the deductibility of state and local tax (SALT) on federal returns… ‘[The SALT deduction cap] means that tax dollars that could have gone to the city are now going to the federal government, and there is less money available for essential local services like schools, police, and fire protection.'” [City of Falls Church]

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