Guest Commentary: An Economic Development Opportunity for The Little City

December 27, 2012 9:48 AM6 comments

Last Spring I attended a City Council Candidate Forum at the Creative Caldron which was attended by several City Council candidates and approximately 25 community members. During a discussion on economic development, I suggested that the City could initiate commercial office development if it would stop its current plan to spend millions on a significant renovation/repair/expansion of our 50 year old City Hall building, and relocate City administrative functions into a new office building.

As a commercial real estate developer and former City Planning Commissioner, I know that this new building could be designed to the City’s exact requirements for efficient office space, a courtroom/Council Chambers, and Police Department. It would be designed to current building codes and American with Disabilities Act requirements, and could also be designed to LEED standards for sustainability. It could have underground parking and street-level retail. It would certainly have a more efficient layout than the current building, and would have reliable, adjustable air conditioning and heating systems, non-leaking windows and roofs, and would likely contribute to City employee retention. In addition, such a building could be designed to meet the currently unmet Federal security requirements for the Courtroom, and provide the space and security not currently provided to our Police Department.

I suggested that this “build-to-suite” development should also include additional space for commercial office tenants to lease at market rates. This new building could be one in which the City simply leased space, or the City could decide to become a financial partner with the private developer. There are many ways for the City to contribute to such a venture, including creating a public-private partnership whereby the City owns the land and a private developer is responsible for delivering and leasing the building, or the City becomes a joint venture partner and contributes equity to the development. In this way, the City can recognize a financial return on an investment in the development, rather than simply paying rent. The City could also consider Tax Increment Financing and other financial vehicles to encourage the development.

The development of such a building would be an important step forward for commercial office development in the City, and would provide new office space in a market which currently has none. It could demonstrate to the market that there is a demand for such office space, which would lead to additional developments. It is very difficult for private developers to obtain financing to build an office building without already having a significant portion of the space already leased, and that is a significant factor in the lack of new office construction in the City. With the City executing a lease for space, a new building, larger than the City needs, could be financed and constructed, with the balance of the space available for commercial tenants to lease at market rates.

I told the Forum that I believed that City’s issuance of a Request for Proposals to commercial real estate investors and developers would send an important message to the real estate market and to its citizens and employees: The City of Falls Church is investing in a new commercial office building development, City Hall and Police Station, instead of again renovating its outdated facilities.

Next, I noted that we could then build a new school on our City Hall land, and not have to spend millions of dollars on the renovation/repair/expansion of another of our 50 year old public buildings: Mt. Daniel School. Mt. Daniel needs to expand, but due to its site, expansion options are extremely limited, and it sits outside of the City, which brings Fairfax County into the decision-making process for expansion. Having done my homework, and told the Forum that the land is currently zoned R-4 (4 houses per acre), and the 8 ½ acres indicated on the plats which I had obtained from Fairfax County could thereby yield 34 homesites. The value of the homesites, at a value estimated by two local homebuilders to be $300,000 to $400,000 each, could result in the City realizing $9 million to $12 million from the sale of the land to invest in the construction of the new Mt. Daniel School at the center of the City, on the current City Hall land.

Since that Forum, I have discussed this plan informally with many in the City, including citizens, neighbors, Council members, the City Manager, City Planner, and City School Board, on which my wife serves as Chair. Responses to this economic development possibility have ranged from enthusiastic to negative, but I think all recognized that this is the type of “out of the box” consideration we should be committing to our City’s economic development needs. I believed then that this was a plan which we should investigate, debate, and perhaps initiate, and I believe that now. Let us consider all options before going further into debt to fund renovations and expansions to our 50 year old City Hall and 50 year old school buildings, lest we miss a terrific opportunity to create a new school, a new City Hall, and new commercial development in The Little City.


Michael Kearney, a former member of the Falls Church City Planning Commission, is an architect and commercial real estate developer.

  • philduncan

    Thanks very much, Mike, for writing this forward-thinking piece. Falls Church citizens, I hope you will give Mike’s concepts serious consideration, discuss them with neighbors and friends, and share your views with members of the City Council, School Board and Planning Commission. As soon as the calendar turns to 2013, these bodies will be rolling up their sleeves to work on plans for operating and infrastructure spending for our City and Schools in FY 13-14 and beyond. We have the opportunity to make decisions that are both visionary and cost-conscious, charting a course toward construction of a new high school, a new K-2 school, and a new municipal building — facilities designed to serve our community’s needs for the next half-century.

  • andyrankin

    This sounds like a good idea. I understand the schools have initiated a study of the current City Hall site to see what options are available if Mount Daniel were to be relocated there. Other than that has any action been taken on any of these ideas? What are the next steps?

    The needs (City Hall updates and increased capacity at Mount Daniel) are real and fairly urgent, but an idea like this will take a while to put into action. For this idea to have any chance we need to move quickly.

  • Jeff Weaver

    Very interesting article. Once all the details get a good public airing perhaps it will prove wiser to proceed with new structures rather than revamps. And it may make sense to rearrange the locations. But if the citizens want these things we should be prepared to pay for them.
    The type of lease arrangement suggested for the municipal complex is not novel. These deals are taking place in states and municipalities around the country. Usually they provide some very concrete short term benefit but often with excessively high long term costs. They are all a little different but they share one characteristic. They create a long term stream of cash from taxpayers to private individuals. If there is a need for office space in the City and if such space would help the bottom line of a future municipal project wouldn’t it make more sense for the City to build and own it with its lower cost of borrowing? Perhaps the City could benefit from a new income stream from the space leased to private individuals instead of inefficiently subsidizing the higher borrowing costs and bottom line profit of the developer.
    Granted everything is in the early stages but if we as a community decide to proceed let’s be cautious that we don’t end up trading the prospect of low- interest bonded debt for a decades-long lease obligation that siphons off money from the future needs of our schools and our City.

    • philduncan

      How best to pay for a new municipal building — this is indeed an important matter for citizens to discuss, Jeff. Thanks for highlighting the “traditional” option: when a community identifies a public need, it makes a public investment, for the very sensible reasons you outline. Those who advocate for other options — such as some kind of public-private partnership — let’s hear that fully argued, too.

  • james george

    what a crock.

  • Mark

    What a joke. Under the banner of helping the city … this is a proposal to help a land development firm. More important, what gut the center of the city (a landmark) for a school! City Hall is the heart of the city. We now have a land deal per the Fairfax water case settlement; plus, will Fairfax object to expansion of Mt. Daniel?

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