New Revenue Formula Projects More Founder’s Row Revenue

June 13, 2018 8:26 PM0 comments

BECKY WITSMAN, of the Falls Church Economic Develoment Office, spoke to the F.C. City Council Monday on the upgraded fiscal projections formula used by the City to gauge expected revenues from new projects. (Photo: News-Press)

An update of the City of Falls Church’s analytical formula for evaluating the potential fiscal impact of new development projects has significantly up-estimated the revenue projections for the 4.3-acre Founder’s Row project that has been revived by its Mill Creek developers who are now seeking a new special exception with hopes of a groundbreaking by late August or September.

The Falls Church City Council approved a preliminary step toward granting the new request Monday following a long list of neighbors, many the same who failed to derail the plan for the northeast intersection of W. Broad and N. West Streets two years ago. This time neighbors included a mix of opponents, and ones who said they’re looking forward to the eight-screen sit-down dining movie complex and restaurants that will go there.

But the decisive testimony brought to the Council prior to its vote came from the City’s Economic Development Office in the person of Becky Witsman, whose matter-of-fact, methodical style of presentation did not hide the big news she was bringing.

It had to do with the forecasting model, which has been developed, refined and used for the better part of the past decade to anticipate what the City can expect in the form of net tax yields from economic development projects. Factored into the model are all the fees, concessions and revenues expected from the full use of any given site, minus expenses to the City, including most importantly, the cost of providing a public education to any school aged children who might reside in it.

It was in that last category where the big change has come. Refining the model to reflect more real data, rather than educated guesses, has found that the projected costs of educating children at mixed use sites in Falls Church are considerably less than originally thought.

Since the completion of the 301 West Broad and Lincoln at Tinner Hill large scale mixed use projects in the last year or two, the actual enrollment data from those two major projects has added considerable accuracy to the model, Witsman reported.

Based on the new data, Witsman projected the net yield to the City, after school and other costs, from the Founder’s Row project will be in the range of $1.7 to $2 million annually. That is a stunning increase over earlier projections that showed as little as $818,000 annually. Before the Founder’s Row plan was presented, the site yielded about $200,000 annually to the City.

The new projections show the project will provide the highest yield to the City of all development projects to date.

Even the new projections are conservative, Witsman said, but are based on real rather than hypothetical data. The project would include $2.3 million in voluntary concessions.

Mayor David Tarter objected to the new projections, saying they created the impression of being arbitrary. But Witsman strongly defended the new formula based on solid new data, and Councilman Phil Duncan said he has “very high confidence in this data,” saying, “It is based on the fact that we have so much better data for Falls Church now.”

The new glowing projections for revenue come despite the fact that Mill Creek is petitioning to replace a hotel on the site with a senior-restricted (age 55 and up) housing project.

Duncan again chimed in on that, saying he feels that the senior housing plan “is superior to a hotel.” The City “needs more people to support the walkable, vibrant, more urban lifestyle we’re going for.” This new plan is “better than a transient hotel for contributing to that,” he said.

The people in the senior restricted building will be 55 and up, and will have a lot of energy and resources to contribute to the City, he noted. The Founder’s Row, with its upscale Studio Movie Grill complex (eight screens and 815 seats) and City Works restaurant, committed already with more to come, will attract those tenants and more young people with its vibrancy as accessibility at night.

Council members Dan Sze said that the revenues from this project are desperately needed by the City to serve as a “good buffer for getting the new high school” over and above the 10 acres of development that will go further to the west in conjunction with the school project.

Council members also expressed a new point of view, partially informed by the revised projection model, that, as Vice Mayor Marybeth Connelly said, “There is no correlation any more between the percentage of commercial uses in a project and net revenue.”

“Residential is no longer a bad word,” Council member Letty Hardi said. “This is the biggest, most impactful project we have. As it is now, we do not have enough people living here.”

The new Mill Creek request will come back to the Council at its August 6 work session, it was not decided this week whether a final vote will come either in mid-August or mid-September.

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