Some last-minute doubts raised late Monday afternoon about the “payment in lieu of taxes” agreement offered by developers of the Kensington Assisted Living project caused yet another delay Monday night.
The proposal for the current Burger King site at 700 W. Broad in Falls Church, faces another delay in the F.C. City Council’s plans to send the proposal out for more public scrutiny and consideration by relevant City boards and commissions Monday night.
“I am extremely disappointed that we are not prepared to vote (a preliminary approval) tonight,” stated Council member Dan Sze. “It has been nearly a year since this first came before us, and it still hasn’t gone to first reading.”
Echoing Sze were Vice Mayor David Snyder and Council members Phil Duncan and Marybeth Connelly. They instead deferred a vote until March 10 while recessing at the conclusion of tonight’s meeting to a closed session to discuss some potential legal ramifications of the proposed deal with the City’s interim legal counsel.
Despite the impatience of some on the Council, however, the project developer, Ed Novak of Nova-Habitat, issued a statement Tuesday morning expressing appreciation for the Council’s legal concerns, adding “We wish to state for the record that our good faith intention on this matter remains firmly in place…We look forward to cooperating with the City to address and resolve the legal implementation issues, and to facilitate a first reading vote by the Council on March 10.”
Moreover, he added, “We pledge to continue to work with Council and staff following first reading to further address other project details prior to a future second reading.”
The hesitation was caused by the City’s interim attorney’s uncertainty about the project’s “PILOT” funding’s compliance with Virginia law.
Novak explained the proposal: “We have offered to accept an assessment for our proposed project of $18 million that approximates the full land and construction costs, rather than a substantially lower one, similar to that of Sunrise Assisted Living, the only other assisted living facility in the City (assessed at $4.6 million). This is, to the best of our knowledge, an unprecedented offer in which a developer has voluntarily proposed to accept a higher assessment, and pay higher property taxes, than would otherwise be determined by the City Assessor.”
Council member Nader Baroukh called the calculations of the net revenues to the City expected from the project (estimated by the City staff at $313,000 annually over the $125,000 annually that currently comes from the Burger King on the site) into doubt, saying that they could result in the City “losing a lot of credibility” because “apples are being compared to oranges.” His criticism was met with a forceful rebuttal by City Manager Wyatt Shields, who defended the calculations, saying they are consistent with what the City has used as a model on numerous other projects.
Rich Palmer, a principal developer of the Hilton Garden Inn now going up adjacent to where the Kensington project would go, spoke to the Council in glowing terms of how there is a synergy between his new hotel and the assisted living facility, saying that visits by relatives to those in the assisted living facility would be likely to stay at the hotel next door “increasing room nights and thus bringing secondary revenue to the City.”
He also spoke highly of Kensington developer Ed Novak based on many years working in the development industry. “I know Ed Novak,” he said. “They will do a quality project.” Novak has worked 13 years on projects in Falls Church, including on The Broadway and The Byron.
Others who testified Monday were not in favor of the plan, including former City Councilman Ira Kaylin, who critiqued the claims of net revenue to the City, nearby residents Teresa Cooper and Gary LaPorta, and the owner of an adjacent commercial property.
Novak reminded the City Council Monday his project is “100 percent commercial, under the definition of health care and professional services,” and that the 88 assisted living units will be on four floors above Broad Street retail to include a corner cafe with outdoor seating wrapping around W. Broad and Lee Streets and a second 1,000 square foot retail space.