Guest Commentary: Facts, Not Claims, Important When Debating Mixed-Use

August 31, 2017 11:13 AM0 comments

As I read last week’s guest commentary, I was reminded of the quote attributed to Daniel Patrick Moynihan: “Everyone is entitled to their own opinion, but not to their own facts.”

I am not a resident of the City. However, for the past 15 years I have been a developer, investor, business owner and enthusiastic promoter of the City. After reading some of the claims made against mixed-use development in last week’s column, I felt compelled to provide factual clarification from the City’s own diligently compiled historical data and fiscal analysis.

Claim: “The City Council approved mixed-use after mixed use project. The problem? The inevitable growth in the population – including the drastic increase in the number of students – stretched our limited infrastructure beyond capacity”

Fact: Since 1999, (prior to the approval of the first mixed-use project in 2001), the FCCPS census increased by 993 pupils, from 1,682 to 2,675. Of that increase, only 214 (under 22 percent) new students came from mixed-use projects approved by City Council.

Fact: Four-fifths of the student population increase between 1999 and 2017 (779; over 78 percent) came from other/existing housing stock in the City (single family homes, townhomes, existing apartments).

Fact: Single-family homes alone accounted for 390 additional students (1,160 to 1,550). That increase is over 1.8 times the 214 total students coming from all new mixed-use projects combined.

Claim: “Previous (mixed-use) projects have been a net-loss”

Fact: $3,839,214 net positive fiscal impact in 2017, on gross tax receipts of $10,589,056 for the eight mixed-use projects approved and completed. The net figure is after subtracting all actual school costs and an allocation of City service costs.

Fact: Additionally, $7,036,403 was paid by developers in one time cash contributions towards school capital costs. That is over $32,000 per student based upon the 2017 census of 214 students.

Fact: Over $4 million paid by developers towards costs of public utility undergrounding, streetscape improvements, public park contributions, art space subsidies, etc.

Fact: The City’s model does not include the benefit of additional revenues such as sales and meals taxes from residents of mixed-use projects who patronize City restaurants, stores and other businesses.

Claim: “Take the Pearson Square project, for example….and others like it that fared even worse”

Fact: The much-maligned Pearson Square project is included in all of the net fiscal impact figures above. It is the only one of the eight new mixed-use projects in the City with a negative fiscal impact. It was designed as a condominium with large units and due to the recession was converted to rental apartments.

Fact: Even with 127 (60 percent) of the total 214 students in all new mixed-use projects, Pearson Square’s individual negative fiscal impact is less than 10 percent of the cumulative total positive fiscal impact of other seven.

Fact: The West Broad Residences and Lincoln at Tinner Hill projects approved subsequent to the Pearson Square “lesson” have a combined annual net positive fiscal impact of over $1.5 million.

Claim: “People chose to live in Falls Church because….you get a private school education because your class size is so small….Say no to debt. Say no to higher taxes.”

Fact: $14,898 = FCCPS cost of education per pupil per year in 2017.

Fact: $13,300 = annual property taxes for a single family home assessed at $1,000,000.

Fact: $270,000+ deficit. The net deficit to the City, in 2017 dollars, over 40 years of a $1 million single family home from which three children are sent to FCCPS for 12 years each. The math: $13,300 x 40 years = $532,000 total taxes. Allocating approximately 50% towards schools is $266,000 in school revenue. Cost of education for 3 students x 12 years x $14,898 = $536,328. Deficit = $270,328.

Fact: Given the demographic trend of existing single family homes in the City, the only way for the City to cover this growing deficit is to raise taxes and/or broaden the residential and commercial tax base to include both non-family residents and businesses that are willing to pay substantially more in taxes, than the cost of the City services they receive. Given the changing paradigms and limited market for new retail and office development, a realistic alternative is mixed use.

I respectfully agree with the previous author that the City of Falls Church is a very special place. And it deserves to remain so, even as it evolves. The City Council must consider important trade-offs as it tries to optimize tax revenues and balance the budget while maintaining the City’s unique character and valued history. However in order to have a truly intelligent debate on the alternatives for the future direction of the City with respect to economic development, it is incumbent for all participants to strive for factual accuracy and integrity.

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