Pricy Lobbying and ‘Spilled Blood’: The Inside Story of How Arlington Won a Veto in Richmond

(Updated at 10:45 p.m.) About a year ago at this time, Arlington looked to be in serious trouble down in Richmond.

In mid-March 2018, county officials faced the decidedly unpleasant prospect that they’d come out on the losing end of a bruising legislative battle with two local golf and country clubs.

One of the county’s foremost foes in the General Assembly had engineered the passage of legislation to slash the clubs’ tax bills, potentially pulling more than a million dollars in annual tax revenue out of the county’s coffers.

Arlington had spent years tangling with the clubs, which count among their members local luminaries ranging from retired generals to former presidents, arguing over how to tax those properties. Yet the legislation from Del. Tim Hugo (R-40th District) would’ve bypassed the local dispute entirely, and it was headed to Gov. Ralph Northam’s desk.

That meant that Arlington’s only hope of stopping the bill was convincing the governor to strike it down with his veto pen.

In those days, long before evidence of Northam’s racist medical school yearbook photos had surfaced, the Democrat was well-liked in the county. He’d raised plenty of cash from Arlingtonians in his successful campaign just a year before, and had won endorsements in his primary contest from many of the county’s elected officials.

Yet the situation still looked dire enough that the County Board felt compelled to take more drastic steps to win Northam to their side. The county shelled out $22,500 to hire a well-connected lobbying firm for just a few weeks, embarking on a frenetic campaign to pressure the governor and state lawmakers and launch a media blitz to broadcast the county’s position in both local and national outlets.

“It became apparent to all of us that every Arlingtonian had something at stake here,” then-County Board Chair Katie Cristol told ARLnow. “At a time when we were making excruciating decisions about our own budget, the idea that you would take more than million dollars and put it toward something that wasn’t a priority for anyone here was so frustrating.”

That push was ultimately successful — Northam vetoed the bill last April, and the county struck a deal with the clubs to end this fight a few weeks later.

An ARLnow investigation of the events of those crucial weeks in spring 2018 sheds a bit more light on how the county won that veto, and how business is conducted down in the state capitol. This account is based both on interviews with many people close to the debate and a trove of emails and documents released via a public records request (and published now in the spirit of “National Sunshine Week,” a nationwide initiative designed to highlight the value of freedom of information laws).

Crucially, ARLnow’s research shows that the process was anything but smooth sailing for the county, as it pit Arlington directly against the club’s members. Many of them exercise plenty of political influence across the region and the state, and documents show they were able to lean heavily on Northam himself.

“One would expect a Democratic governor to be highly responsive to one of most Democratic jurisdictions in the state,” said Stephen Farnsworth, a professor of political science at the University of Mary Washington in Fredericksburg. “But this was a matter of great concern to a bunch of very important people in Virginia, and that may well be the reason why additional efforts were necessary.”

And, looking forward, the bitter fight over the issue could well have big implications should similar legislation ever resurface in Richmond.

“Structurally, this bill could absolutely come back someday,” Cristol said. “And the idea that a bill that has such deleterious consequences for land use and taxation in jurisdictions across Virginia could come back and garner support because of an effective lobbying interest is very much a real threat.”

A risky precedent?

Hugo kicked off the fight over golf course taxes in the state capitol by filing his bill in fall 2017, but the dispute had been percolating long before then.

Both the Army Navy Country Club (located along I-395 just past Pentagon City) and the Washington Golf and Country Club (near Marymount University along N. Glebe Road) had been fighting with the county’s real estate assessor for years.

Arlington officials sought to value the clubs’ based on the “highest and best use” of the land: in this case, as space for residential or commercial properties. That meant the county assumed that each square foot of land was worth about $12 — the two clubs control more than 370 acres of land, combined.

The county reasoned that land is exceedingly valuable in the 26-square-mile locality, where officials have trouble finding sites for schools and other public facilities, and ought to be treated as such. Residential properties near each club have often been valued at many times that amount, for comparison.

That means Army Navy was generally assigned a value of well north of $100 million over the years, with an annual tax bill hovering around $1.5 million, county records show. Washington Golf ranged in value from $42 million to $60 million, with a tax bill of $838,000 for 2017.

The clubs argued those tax bills were wildly unfair compared to other Northern Virginia golf courses, some of which are valued at a much lower rate. They claimed the high tax bills were forcing them to raise membership rates, putting a strain on members — in Army Navy’s case, many are active duty military or veterans.

So Hugo filed legislation to slash the valuation rate to around $0.50 per square foot, reducing the clubs’ annual tax burden by roughly $1.5 million, combined. The clubs also filed suit against the county in December 2017, challenging their 2014 property assessments.

But it was the legislative push that unnerved county officials the most. Losing the court case would impact just two property assessments in isolation (albeit valuable ones) — seeing the legislation pass could’ve opened the door for other landowners to follow the same playbook, they feared.

“It would set a risky precedent where any property owner who does not agree with their assessment could run to Richmond for a legislative fix,” then-Board member John Vihstadt warned a state Senate committee in February 2018.

Smooth sailing for Hugo’s bill

Cristol says the Board took the prospect of Hugo’s bill passing “incredibly seriously” from the moment it was introduced. She remembers the entire Board frequently checking in with the county’s state legislative delegation, and other lawmakers representing Northern Virginia, to make the county’s position clear.

Del. Rip Sullivan (D-48th District), who represents parts of Arlington, spoke forcefully against the bill in a Feb. 7, 2018 committee hearing in the House of Delegates. At the time, Sullivan said he “probably spent more time on this bill than any other bill this session.”

“To my way of thinking, a resolution between the parties is always better than this body imposing an outcome,” Sullivan told his colleagues on the House finance committee. “I believe the parties are on course, pardon the pun, to a resolution of this.”

Sullivan cited “ongoing, good faith negotiations” between the clubs and the county, arguing that two sides were in the process of settling the valuation dispute and averting the need for any lawsuit.

At the time, however, Arlington had yet to offer a settlement of the lawsuit to the clubs, or hold extensive negotiations with them.

A timeline drafted by County Attorney Steve MacIsaac for use in later lobbying efforts notes that the county didn’t hold its first sit-down meeting with club officials until mid-March. The two sides discussed some inspections of the properties over the month of February, while the legislature was in session, but offered no terms to resolve the matter until later.

And Hugo argued that his legislation was the only reason any negotiations were happening at all.

“The ‘ongoing talks’ never really started until the bill was introduced,” Hugo told the finance committee.

Hugo’s colleagues saw things his way. The bill easily passed the committee with bipartisan support, passing both the Senate and the House with a mix of Republican and Democrat votes a few weeks later. The bill was sent to Northam by March 16.

Four days earlier, the County Board signed a $15,000 contract with Capital Results, a Richmond lobbying firm, documents and emails show. The firm’s past clients range from the National Rifle Association to Major League Baseball to Tesla Motors, according to state records.

Capital Results’ duties would include “message development,” “thought leader engagement,” and “media relations,” according to the contract. Partner Bea Gonzalez took point on the operation.

Cristol says the decision to hire the firm was partly out of desperation, as the Board recognized that heavily Democratic Arlington might have trouble winning sympathy from the Republican-dominated General Assembly without some extra help.

“We knew we’d need members of the majority caucus, which can be a little hard for Arlington,” Cristol said. “This was an opportunity for some outside help to reach some in the other party.”

Plus, the county had to face off against plenty of lobbying from the clubs themselves — Washington Golf employed two lobbyists for the legislative session, while Army Navy retained four of its own, state records show.

Gonzalez gets going

Emails show that, by March 14, 2018, Gonzalez had leapt into action.

She began coordinating closely with both Cristol and Pat Carroll, the county’s main government affairs staffer in Richmond, with one main opening goal: funneling a slew of letters opposing Hugo’s bill to Northam’s office.

Not only did Gonzalez help draft a resolution for the Board to pass condemning the bill, but she helped craft letters for all manner of Arlington politicians and community leaders about the country club legislation.

Sheriff Beth Arthur, Clerk of Circuit Court Paul Ferguson, County Treasurer Carla de la Pava, former Del. L. Karen Darner, the School Board, the heads of firefighter and police unions and local PTA presidents all communicated with Gonzalez about sending letters to Northam.

She drafted the letters and, in many cases, local leaders would send them onto the governor as their own, the emails show.

“At this point it is a numbers game [with] the number of letters and emails received,” Gonzalez wrote to Carroll on March 27.

Gonzalez also worked extensively with state Sen. Barbara Favola (D-31st District) to draft an op-ed and then place it in the Washington Post. It eventually ran on March 30, under the headline, “Virginia country clubs don’t need these tax breaks.” Gonzalez also helped Cristol draft her own op-ed on the matter, though it’s unclear if it was ever published.

Farnsworth said that, given the outsized influence of lobbyists around the capitol, it should hardly be a surprise that they may also be doing a little ghostwriting for politicians.

“Lobbyists draft bills, so why wouldn’t they draft op-eds?” he said. “Cynicism with respect to the authors of opinion columns or legislation is not generally misplaced.”

Earning some eyeballs

Earning media attention was another key part of Gonzalez’s strategy. The emails show she worked to secure Cristol interviews with TV and radio outlets alike and prep her for each one — she even worked with county staff to draft news releases on each stage of the legislation’s development.

And Gonzalez also endeavored to generate some more grassroots opposition to Hugo’s bill. While she reached out to a variety of different community activists, she found the most success with Annette Lang, who worked with the progressive group “We of Action Virginia.”

Lang and Cristol had chatted extensively about the golf course issue during the “March for Our Lives” gun safety demonstration in D.C., and Cristol forwarded her contact information to Gonzalez. From there, Gonzalez and Carroll provided her with talking points against Hugo’s bill and Lang whipped up support as part of a new group: “NoTaxSubsidies4Clubs.”

“It struck me that it’s really inappropriate for the General Assembly to step in on something like this, so I got kind of jazzed about it,” Lang told ARLnow. “Which is strange, because it’s a rather dry issue.”

Lang and her fellow activists began writing to state lawmakers about the issue, and sent letters to the editor along to local news outlets. They even took out ads blasting the bill in the Sun Gazette, including one pictured at left.

And when it came time for one of Northam’s regular appearances on WTOP’s “Ask the Governor” radio show, Gonzalez convinced Lang to call in, at Cristol’s urging. The hosts took her call during the March 28 broadcast.

“My question is, do you think real estate tax assessments should be established by local elected officials with disputes resolved in the courts, or should they be imposed upon by state legislators with disputes resolved by the state legislators that are not elected by the locality?” Lang asked.

Northam commended her for having a “good grasp of what we’re dealing with right now,” and vowed to “step in and take action” only if the county and the clubs couldn’t strike a deal.

Northam feels the heat

The governor’s tone during the radio show provided a good indication of how his staff was approaching the situation behind the scenes.

Emails show that Northam’s chief of staff, Clark Mercer, wrote to Cristol later on March 30 to get contact information for the clubs’ leaders. He said he planned to send an email “out to the group to encourage dialogue between the parties.”

But Northam’s appearance during the WTOP program also hinted at some of the pressure he was feeling to let the bill become law.

“Something I am sensitive to is a lot of these members are veterans,” Northam said. “A lot of them have protected our lives and have limited resources, and so the memberships have gotten fairly unreasonable, and that’s why this needs to be addressed.”

Emails between Gonzalez and Carroll indicate that the governor, himself an Army veteran and Virginia Military Institute graduate, was hearing the argument quite frequently that, without a slash in tax bills, the clubs would become unaffordable for their military members.

“[Former Arlington Del.] Bob Brink says that the governor is hearing from veterans,” Carroll wrote to Gonzalez on March 23. “Not sure yet how many.”

“Yes, veterans are calling in — and all of the VMI network too,” Gonzalez replied.

Cristol remembers being confused at hearing such arguments. “The idea that we would support veterans by giving tax breaks to country clubs, rather than investing tax dollars in services to support veterans felt bizarre to me,” she says now.

Nevertheless, it was clearly a powerful argument in the clubs’ favor. Hugo referenced the issue several times during committee debate; a March 3 op-ed on the conservative Virginia politics website Bearing Drift accused Arlington of “using an unfair application of tax policy to willfully run United States military veterans out of the county.”

Lang recalls several legislators telling her that they’d heard similar overtures. Del. Kaye Kory (D-38th District) told Lang in an email that “I am receiving voicemails from veterans urging me to support this bill and angrily demanding to know why I voted against it.”

“This misleading campaign is hypocritical and disappointing,” she wrote on March 25.

Some of the pressure from veterans was even directed Cristol’s way.

Someone tweeted at her on March 28 urging her to support Hugo’s bill based on what it would mean for veterans. She responded that “I’m honored to represent the >12k veterans living in Arlington County. I don’t think asking them to foot the bill for tax breaks for country clubs is a sign of respect.”

That tweet did not go unnoticed among the country clubs’ supporters. A few days after Cristol’s social media post, Carroll wrote to Gonzalez, saying she’d heard about the tweet directly from Suzette Denslow, Northam’s deputy chief of staff.

Denslow had gotten a call from Edward Mullen, one of the lobbyists representing Washington Golf, who was upset about that message. And Mullen is no stranger to the Northam administration — he served on the governor’s transition team, and personally donated $1,500 to Northam’s gubernatorial campaign.

Carroll wrote to Denslow to reassure her that the clubs and the county were working together and making progress on a settlement.

After the veto, a ‘good relationship’?

Regardless of any heat Northam might’ve been feeling, the governor came through on Arlington’s side by April 9, his deadline for acting on the bill.

He vetoed Hugo’s legislation, but delivered a warning in a statement attached to the decision: “I encourage the parties to continue negotiations to find a solution so that similar legislation will not be necessary in the future.”

This prompted rejoicing from the Arlington contingent, with one cautionary note.

“I spilled blood on this one,” Favola wrote to Gonzalez, Carroll and other county officials. “There is nothing left for a redo, so please reach a settlement with the clubs.”

Cristol followed up the next day with proposed strategies on how to sustain the governor’s veto, fearing that Hugo might try to muster the votes to override Northam’s decision. That would require a two-thirds majority in the House of Delegates, a heavy lift considering the bill didn’t originally pass with that much support.

Still, emails show Carroll and Gonzalez exchanged ideas about which local lawmakers might be well positioned to whip support for the veto.

Meanwhile, Gonzalez feared that Hugo was marshaling his own opposition to the veto as late as April 16.

“Been texting with Hugo, and he may be leaning on giving a long [floor] speech I think,” she wrote to Carroll. “So we need to be sure to be prepped.”

The county even agreed to extend its contract with Capital Results that same day. Gonzalez charged Arlington another $7,000, documents show.

“The veto being sustained was not at all something we took for granted,” Cristol said.

Ultimately, Gonzalez’s fears weren’t realized. On April 19, she wrote to a group of county officials that Hugo had decided not to contest the veto.

Six days later, the clubs and the county struck a deal to avert the lawsuit, according to an email from Army Navy’s chairman to his members.

The county agreed to reduce its valuation of the courses, and refund some of their past tax bills — the changes cut Army Navy’s tax bill by about $600,000 last year, while Washington Golf saved about $400,000. Word of the settlement made it to ARLnow by May 2.

Cristol says the ultimate outcome was undoubtedly the one the county had hoped for, but she added that there were certainly moments where county leaders felt “great frustration and disappointment” about the how the debate proceeded. Plainly, the whole saga left some hard feelings all around.

“[The clubs] chose, unfortunately, to take their case to Richmond and sue us at the same time,” Vihstadt told ARLnow. “Not the way to make friends and influence people, in my view.”

That’s not to say the experience left the clubs and the county entirely on bad terms, however.

“We are trying to maintain a good relationship with the county and hope to maintain that good relationship in the future,” Raighne Delaney, Army Navy’s secretary-treasurer, told ARLnow. Washington Golf’s representatives did not respond to a request for comment.

That being said, Cristol remains wary that the county could find itself doing battle with the clubs in Richmond once again, should that relationship deteriorate.

After all, she notes that Hugo — a Fairfax Republican who has frequently clashed with the county on all manner of issues — “is still in the General Assembly.”

“People in Clifton or other parts of the state could always decide they know better how to tax open space in Arlington,” Cristol said.

Main photo via Facebook

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Changes to Washington Golf and Country Club Fireworks This Year

Members of the public who want to watch the Washington Golf and Country Club fireworks display will have to stand this year.

Due to renovations, the golf course is an “active work area” and seating is not available, as it has been in previous years.

“The fireworks are still happening but unfortunately the general public will need to stand outside the clubhouse to view the fireworks,” said Member Services Coordinator Jordan Marks.

Marks said the club is trying to make sure residents are notified in advance of the change. The club also issued a statement about the situation.

The golf course at Washington Golf & Country Club is currently undergoing a renovation. During the renovation there is no access to the golf course because it is an active work area.

As a result of this ongoing work, there will unfortunately be no seating available on the course to view the fireworks display. We apologize for any inconvenience and hope you have a wonderful 4th of July.

Washington Golf and Country Club, along with Army Navy Country Club, recently settled a tax dispute with Arlington County.

Flickr pool photo by Kevin Wolf

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Morning Notes

Family Wants to See Relative Shot By Police — The family of Steven Best, who was shot by police last week after allegedly trying to ram a police cruiser with a van, says they have not been allowed to see him nor have they been given information on his condition. [WJLA]

Legislative Threat Helped Country Club Tax Deal — “The decision by two Arlington country clubs to take their case to the General Assembly helped get all parties to come together on a deal more expeditiously than otherwise might have been the case, the Arlington government’s top legal official said,” reports the Sun Gazette. Arlington clubs, meanwhile, “came away with most of what they were seeking in assessment reductions.” [InsideNova, Washington Post]

Local Sixth Graders Make Headlines — A fourth-period, sixth-grade class at Gunston Middle School is the May Class of WaPo’s KidsPost. [Washington Post]

Marymount Employee’s Boston Marathon Journey — Katie Sprinkel, a lab coordinator and adjunct professor at Arlington’s Marymount University, overcame knee and leg injuries — and a battle with breast cancer — to finish this year’s Boston Marathon. She was back at work the next day. [Marymount University]

Arlington Among Top Walkable Places — Arlington is No. 9 on a list of the most walkable communities in the country. The list was compiled by the travel site Expedia. [Viewfinder]

Major Metro Work Starting Next Summer — “There will be no service on Metro’s Blue and Yellow lines south of Reagan National Airport for 98 days beginning in May 2019, as the transit agency embarks on a platform rebuilding project spanning six stations, part of an effort to refurbish 20 station platforms over three years.” Arlington’s East Falls Church Metro station is also on the list of platforms to be rebuilt. [Washington Post, WMATA]

Flickr pool photo by John Sonderman

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Country Clubs, County Strike Deal to End Tax Standoff

(Updated at 4:30 p.m.) A dispute between two private country clubs and Arlington County that resulted in some wrangling in Richmond seems to have come to an end.

The Army Navy Country Club (1700 Army Navy Drive) and Washington Golf and Country Club (3017 N. Glebe Road) were both pushing for property tax changes that could have cost the county roughly $1.4 million in tax revenue each year, even backing legislation at the state level this year to force those alterations. That miffed county leaders, who bristled at attempts by the state General Assembly to change Arlington’s tax policy to save money for the golf courses.

Now, the county has agreed to reduce the tax burden on each club by tweaking how it values their land, according to an April 27 email sent out by the Washington Golf and Country Club’s president and obtained by ARLnow. County attorney Steve MacIsaac confirmed that the parties have signed off on a settlement agreement, putting to bed a 2014 lawsuit brought by the clubs over the tax question.

Like any settlement, both sides give a little bit to get to a mutually acceptable outcome,” MacIsaac told ARLnow.

Gov. Ralph Northam (D) had vetoed the bill addressing the issue in the hopes that the county and the clubs would come to some sort of compromise, and his spokeswoman Ofirah Yheskel said his office is “still evaluating the details but support[s] a locally negotiated solution here.”

The country clubs had backed the legislation, sponsored by Del. Tim Hugo, R-40th District, which would have forced the county to change how it assesses the value of the roughly 630 acres held by the two clubs.

Currently, the courses are valued as “large acreage parcels” at $12 per square foot, while residential land near each course is valued as high $100 per square foot. Hugo’s legislation would have slashed the rate to about 50 cents per square foot, in a bid to meet persistent concerns from the courses that they were overtaxed.

Washington Golf and Country Club President Stephen Fedorchak wrote a letter to members explaining that the county now has agreed to reduce the club’s valuation from “approximately $93 million to approximately $47 million” in 2018, which reduces the club’s property tax bill this year to about $460,000. Arlington also plans to credit $815,000 toward the club’s current tax bill to make up for the last three tax bills the club has paid at the previous, higher valuation, MacIsaac added.

“We are gratified by this reasonable, sustainable resolution,” Fedorchak wrote to members. “It will benefit the club’s general fiscal health for years to come.”

Raighne Delaney, the Army Navy Country Club’s secretary, did not respond to a call seeking details on the structure of his course’s deal with Arlington. But MacIsaac estimated that the club will receive about $1.25 million in credits toward its tax bill, and the valuation of the property will shrink by 25 to 35 percent under the terms of the settlement.

The Army Navy Country Club was assessed at just over $149 million for 2018, and was set to owe about $842,000 in taxes this year before any credits.

Starting in 2019, the clubs’ assessments will “increase or decrease based on the average annual change in the county’s residential real estate assessments,” Fedorchak wrote. Should the assessment change “outside those parameters” the clubs reserve the right to challenge that valuation, Fedorchak noted.

Arlington officials have previously argued that land is at a premium in the 26-square-mile county, necessitating the higher taxes.

“Our community is already grappling with reductions to services in order to address budget gaps for the upcoming fiscal year and larger projected budget gaps in future years,” the county board wrote in a March 21 letter to Northam urging him to veto Hugo’s bill.

File photo

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BREAKING: Governor Vetoes Country Club Bill

Virginia Gov. Ralph Northam (D) has vetoed legislation that would have dramatically reduced Arlington County’s tax revenue from two country clubs.

HB 1204 would have reduced the tax bills for Army Navy Country Club and Washington Golf and Country Club, but would have cost the county’s coffers nearly $1.5 million annually.

The state legislature will now have an opportunity to override the veto.

More from an Arlington County press release:

“We are grateful to Governor Northam for vetoing HB 1204,” Arlington County Board Chair Katie Cristol said. “The governor, by his action to keep authority over local property assessments in the hands of local government, and not in Richmond, has shown real leadership.  This legislation had major implications for all localities across the Commonwealth.”

Arlington encourages all local governments to unify and ask their legislators to sustain the veto when the General Assembly reconvenes April 18 at the State Capitol, Cristol said.

“We are committed to resolving the assessment issue with the golf courses, and we are confident that we can find an equitable solution,” she said. “I want to thank our Arlington delegation for standing strong with us throughout this process.”

In his veto message, Northam says that he expects Arlington and the clubs to reach a compromise soon. The clubs are suing the county, fighting back against what they say is an unfair way to assess what is essentially open space — treating the many acres of golf courses as developable land.

The governor’s veto message is below.

Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto House Bill 1204, which requires the County of Arlington to assess two private country clubs within its boundaries as land dedicated to open space rather than its current method of highest and best use.

This is a local dispute over a local government’s method of assessing land for property taxation. As such, the solution to this dispute should be reached on the local level without the involvement of the state.

I have been assured that an agreement acceptable to both sides of this dispute is close to being reached. I encourage the parties to continue negotiations to find a solution so that similar legislation will not be necessary in the future.

Accordingly, I veto this bill.

Sincerely,

Ralph S. Northam

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Morning Notes

Northam Talks Golf Course Bill — Speaking on WTOP’s “Ask the Governor” program, Gov. Ralph Northam (D-Va.) addressed the country club tax bill that Arlington officials want him to veto. Northam said the taxation of Army Navy Country Club, which counts numerous veterans among its members, particularly “needs to be addressed” and that if negotiations are not successful he will “step in and take action,” though the exact action he would take is unclear. [WTOP]

How Arlington Almost Was Home to the Nationals — Boosters of baseball in Arlington almost succeeded in bringing a Major League Baseball team to the county. The Nationals, before landing near Navy Yard in D.C., were considering a stadium site in Pentagon City, but a series of unfortunate events nixed it. [Arlington Magazine]

ART Bus Turns into Sauna — From a Twitter user yesterday: “@ART_Alert my bus driver just begged me to contact you and ask to get his bus fixed. The heat is stuck on the bus and it must be 95 degrees inside.” [Twitter]

Flickr pool photo by John Sonderman

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County Board Asks Governor to Veto Country Club Bill

The Arlington County Board sent a letter to Gov. Ralph Northam today (March 27) requesting that he veto a bill adopted by the General Assembly that would provide big tax savings to two Arlington country clubs but cost the county millions.

The bill would mandate an open space assessment of golf course properties in the county, providing big tax breaks to Washington Golf and Country Club and Army Navy Country Club. According to a county press release, the assessment changes would result in a county revenue loss of about $1.43 million per year.

The hit to the county’s coffer would require “significant potential reductions in the areas of student education, public safety, transportation, community health, and social services,” the letter said, suggesting also that the “preferential tax treatment” conflicted with the Code of Virginia and the state constitution.

“This bill comes at a time when our community is already grappling with reductions to services in order to address budget gaps for the upcoming fiscal year and larger projected budget gaps in future years,” said the letter, which was signed by all five County Board members.

The full text of the letter after the jump.

Dear Governor Northam:

We are writing to respectfully request that you veto HB1204, a bill adopted by the General
Assembly mandating the open space assessment of golf course properties in Arlington County.
In an effort to provide preferential tax treatment to two golf clubs in Arlington, the bill conflicts
with the Constitution and Code of Virginia, sets a dangerous precedent for real property tax
assessment decisions to be made in Richmond instead of at the local level, and undermines state
laws related to the preservation of open space. Moreover, this legislated tax relief solely for two
golf clubs has a substantial budgetary impact on Arlington County at the expense of schools,
public safety, public services, public health, and transportation.

This bill would require Arlington County to assess the two country clubs located in the County
as land devoted to open space. It mandates an assessment for Arlington’s golf courses that
currently is only available through an optional program local governments may adopt by
ordinance. Such programs would require participating properties to pay taxes on the full fair
market value of their property for the five years prior to when they choose to leave the program
(“roll back taxes”), something HB1204 does not require.

Enacting this legislation is a dangerous intrusion into the local real estate assessment process
which has traditionally been the sole province of local decision making, and sets a dangerous
precedent of the General Assembly becoming the venue for what is at its core a local issue,
potentially leading to further future carve outs for preferred property owners through legislation
sought under the pretense of equity. Further, the legislation undermines the Use Value Taxation
Program in Virginia, which since its inception in 1972, has provided preferential tax treatment
for certain categories of real estate in exchange for their preservation. HB1204 clearly provides
the preferential tax treatment but, contrary to the Code of Virginia, does not require preservation
of the property as open space, and absolves property owners from paying any tax recapture upon
sale of their land.

Finally, HB1204 would result in a decrease of County tax revenue by $1.43 million annually,
necessitating significant potential reductions in the areas of student education, public safety,
transportation, community health, and social services. This bill comes at a time when our
community is already grappling with reductions to services in order to address budget gaps for
the upcoming fiscal year and larger projected budget gaps in future years.

The County and the clubs had been utilizing the process established by the General Assembly for
all property owners to challenge their assessments – namely through the Board of Equalization
and the Circuit Court. While this process is not yet completed, we understand the concerns
expressed by Washington Golf and Country Club and Army Navy Country Club. The County
has, in the context of settlement discussions, proposed a revised approach to valuation of the
clubs, and has expressed our willingness to work together to identify options to reduce their tax
liability under the law. Given the good faith efforts to resolve the pending litigation with both
clubs, and to mutually agree upon a valuation approach going forward, the County is requesting
the time to address this matter locally instead of through legislative mandate. We are confident
that we can reach a mutually agreeable resolution with both clubs, preventing this issue from
returning to the General Assembly in the 2019 session.

For these reasons, we respectfully request that you veto this legislation. Thank you in advance
for your consideration and for all that you do to support counties, cities and towns throughout the
Commonwealth.

Sincerely,

Katie Cristol – Chair
Christian Dorsey – Vice-Chair
Libby Garvey – Member
John Vihstadt – Member
Erik Gutshall – Member

File photo

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Morning Notes

Dem Support for Country Club Bill Slips — A procedural vote in the Virginia House of Delegates to send the Arlington country club bill to the governor’s desk passed, but without a veto-proof margin. Some Democratic lawmakers who supported the bill the first time around voted no instead. If signed by Gov. Ralph Northam (D), the legislation would greatly lower the property taxes of Army Navy Country Club and Washington Golf and Country Club. [InsideNova]

Four Courts Four Miler Closures — The annual Four Courts Four Miler race will close roads parts of Wilson Blvd and Route 110 in Courthouse and Rosslyn this coming Saturday morning. [Arlington County]

Food Trucks Grumble About Festival Fees — “To participate in May’s Taste of Arlington festival… food trucks must pay a flat fee of between $400 and $500. Festival attendees purchase tickets worth $5 each that can be redeemed at food trucks for a few bites. When the gates close, event organizers reimburse the food truck between 25 and 75 cents per ticket… Would you sign this contract?” [Washington City Paper]

‘Women of Vision’ Awards — Nominations are now being accepted for the 2018 Arlington Women of Vision Awards. The nomination deadline is April 20. [Arlington County]

How to Do Business With Arlington — Arlington is hosting an event next week that will show small businesses “the nuances of successfully doing business with Arlington County.” Per the event website: “Experts will be speaking on topics such as obtaining opportunities to work with the County and understanding the procurement process.” [Arlington Economic Development]

Nearby: Alexandria Tops Tourism List — Alexandria is No. 1 on Money magazine’s “The 20 Best Places to Go in 2018” list, topping Anaheim, Calif., the home of Disneyland, among other destinations. Harper’s Ferry, W. Va. was ranked No. 2. [Washington Post]

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Morning Notes

Partisans Stake Out Sides on Country Club Tax Bill — There are two very different political perspectives on the state bill that would greatly lower the tax bills of Arlington’s two country clubs. On one hand, a writer on the conservative blog Bearing Drift says Arlington’s tax treatment of Army-Navy Country Club (which is covered by the bill along with Washington Golf & Country Club) is “manifestly unfair, and… impacts an especially distinguished and patriotic group of older folks.” On the other hand, progressive blog Blue Virginia says the bill, which passed the Virginia General Assembly last week, should be vetoed by Gov. Ralph Northam (D) because it would “lavish big $$$ on super-rich people, weaken local autonomy vs state AND set a horrible precedent.” [Bearing Drift, Blue Virginia]

County Launches Online Payments for Building Permits — After years of grumbles from local businesses, starting today Arlington County is accepting online payments for building permits. Payments can only be made online when one is submitting permits via the ePlan Review portal. [Arlington County]

Arlington Tourism Tax Bill Passes — “More than a dozen Republican members of the House of Delegates voted against, but Arlington’s effort to retain its ability to levy a surtax on hotel stays to pay for tourism promotion is headed to the governor’s desk.” [InsideNova]

Arlingtonian Making World Record Attempt — Crystal City resident and elite runner Tyler Andrews will attempt to break the 3o-year-old record for fastest 50K run next month. [STRIVE Trips]

First Down Marks Ninth Anniversary — First Down Sports Bar & Grill in Ballston is celebrating 9 years in business today. [ARLnow Events]

Nearby: Lebanese Taverna Closing in Bethesda — Arlington-based local restaurant chain Lebanese Taverna is closing its Bethesda location, citing an inability to reach agreement on a new lease with the landlord of Bethesda Row. [Bethesda Beat]

Photo courtesy Paola Lyle

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Morning Notes

Golf Course Tax Bill Passes — A bill that would provide a massive tax break to two Arlington country clubs has passed the Virginia General Assembly. The bill, if signed into law by Gov. Ralph Northam (D), would cost Arlington $1.5 million or more in tax revenue. [Washington Post]

Military Couple Fights Wife’s Deportation — The wife of a retired Army special forces veteran was to face deportation in an Arlington-based immigration court next week, but the Dept. of Homeland Security is now offering to drop the proceedings. Prior to the reversal, Sen. Tim Kaine (D-Va.) called said via social media: “Military families should not be targeted like this. It’s unconscionable.” [Military Times, Twitter]

Cherry Blossom Bloom Prediction — The National Park Service expects peak bloom for the Tidal Basin cherry blossoms to take place March 17-20. [PoPville]

Beyer’s GOP Challenger — “The Republican challenger to U.S. Rep. Don Beyer (D) used a Feb. 28 meeting of the Arlington County Republican Committee to introduce himself to the county’s GOP rank-and-file. ‘I look forward to the campaign,’ said Thomas Oh… an Army veteran and currently a contractor in Falls Church.” [InsideNova]

Marymount Joins New Conference — Marymount University in Arlington and five other schools have formed the new Atlantic East Conference within NCAA Division III. [Marymount University, Twitter]

County Seeking Budget Feedback — Arlington County is seeking feedback on its proposed budget. The online survey asks residents to weigh in on various priorities, including county employee raises, economic development, Metro funding, school funding, infrastructure investment and affordable housing. [SurveyMonkey]

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State Bill Would Provide Big Tax Breaks to Arlington Country Clubs

A state bill targeted at helping country clubs in Arlington would cost the county more than $2 million in tax revenue, an internal county report says.

HB 1204, patroned by Fairfax and Prince William County Del. Tim Hugo (R), passed the House of Delegates last week by a vote of 65-33-1. The bill would “reserve to the Commonwealth the power to classify golf courses as land dedicated to open space for assessment and tax purposes,” according to an internal Arlington County fact sheet.

More from the bill’s summary:

Requires the assessing official in any county that experienced at least a 14% increase in population from 2010 to 2016 to specially and separately assess real property that is devoted to open space and contains at least five acres based on the actual physical use of the property, if requested to do so by the owner. The measure is effective for taxable years beginning on or after January 1, 2018.

The bill only would apply to Arlington and Loudoun counties, we’re told, and it would primarily affect the tax assessments of two entities: Army Navy Country Club and Washington Golf and Country Club, both in Arlington.

The country clubs are currently suing the county, challenging their respective assessments. Arlington assesses each based in part on their potential value as developable land, meaning that the assessments — and yearly tax bills — are much higher than if the clubs were assessed only on the basis of their current use.

Army Navy Country Club, near Pentagon City, was assessed at $149 million this year, and paid $1.5 million in taxes last year, according to county records. Washington Golf and Country Club, located along N. Glebe Road near Marymount University, is assessed at $79 million and paid about $839,000 in taxes last year.

The internal county report says that the country clubs are both currently assessed as “large acreage parcels,” valued at about $12 per square foot. By comparison, some residential property near WGCC is assessed at nearly $100 per square foot. Should the legislation pass, the assessed value of the clubs is expected to drop to around $0.50 per square foot, costing the county nearly $2.4 million.

“This is a bad bill for Arlington County government and for Arlington County property owners,” said County Board Chair Katie Cristol, adding that it would set a “damaging precedent.”

The Virginia Municipal League is opposing Hugo’s bill, which is currently being considered by the state Senate. In an email, the organization urged localities to take action.

“Notwithstanding the arguments posed by the bill’s proponents, the measure shatters existing state policy,” the email said. “If approved, nothing will prevent future General Assemblies from giving away local tax dollars and disregarding land use and tax policy decisions that belong to local governments. And, for the record, HB 1204 does not obligate the Commonwealth to reimburse local governments for the resulting lost revenues.”

The state Senate’s Finance Committee is expected to discuss the legislation at a hearing Tuesday morning.

At its meeting Saturday, two County Board members supported advertising a higher property tax rate, based on the risk of lost tax revenue from the bill. A majority of the Board, however, voted against raising the rate.

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