How can the city better market itself and show the assets it is famous for? Thats a good question and Alexandria Mayor William Euille aims to find out. To that end, assets of the city were the focus of a preliminary report from the mayors economic sustainability workgroup that will present its final report and recommendations to City Council in late spring.
The group was appointed in June, 2006, by Mayor Euille. They were asked to look at the citys current economic development activities and suggest ways for improving revenue diversification to reduce reliance on residential real estate taxes. The group is comprised of local, national and international business leaders who make Alexandria their home. The chair, Nigel Morris, is the founder and former president of Capitol One. Other members are Jim Butler, Lavern Chatman, Stephen Fuller, Dennis Garcia, Charlotte Hall, Mark Kington, Greg Leisch, John Meagher and Lonnie Rich. City residents got their first look at their work so far last week at a town hall meeting.
The first issue was how the city spends its money and from where it generates revenue. Thirty-one percent of the general fund is spent on the public schools; 24 percent goes to public safety and the courts; 11 percent funds development and transportation; 10 percent supports social services; nine percent is allocated to general government; eight percent is for debt service and cash capital; six percent is spent on parks and recreation and one percent is dedicated to legislative and executive expenditures.
Nearly 32 percent of the citys revenue comes from taxes on residential property while other local taxes account for 30.2 percent. Commercial property taxes provide 22 percent; inter-governmental generates 10.2 percent and non-tax income accounts for only six percent of the total revenue.
We have known for some time that we must decrease our reliance on residential property taxes and this analysis clearly demonstrated that, said Euille. The question has always been what do we do about that?
I guess if there was a surprise it was the lack of growth in the city as that relates to job growth in the region, said Mark Jinks, assistant city manager for finance and one of the members of the city staff who is assigned to work with the group. The data has been there in plain sight but, for some reason, it was a shock. The region has shown unprecedented job growth over the past five years but Alexandria has not kept pace with everyone else.
Since 2003, the Washington metropolitan area has added more than 50,000 jobs per year, while Alexandria added a minimal number of jobs in 2004 and 2005 and is projected to have lost jobs in 2006. We concentrated in bringing the U. S. Patent and Trademark Office to Alexandria and that is the reason for our increase in jobs over the past five years, Euille said. They brought 8000 jobs and built a large office complex. Now we need to look at attracting other businesses to the city.
There are many reasons for the lack of job growth in Alexandria. Many heavy and light industrial uses are moving to Loudoun and Prince William counties because they have more land and allow for greater flexibility in constructing facilities, Jinks said. We have seen a lot of development in the past five years but most of that has been residential.
Potomac Yard is largely residential although the Town Center will have a number of offices and retail uses and hotels. We are seeing an increased amount of office and retail development in the Eisenhower Valley. Essentially, we are going to have to decide what kind of development we want to attract; residential or commercial? Our research clearly shows that, if we want to diversify our revenue, we must focus on commercial because the returns are greater, Jinks said.
There are several agencies working on economic development. We need to look at how each of those private groups is functioning and, perhaps provide greater oversight, Euille said. We might want to consider bringing economic development in-house or we might just want to ensure that all of the various groups are working together and coordinating efforts. I dont think that we will save any money; we might even have to spend more, initially. We just need to be certain that the money we are spending is being used efficiently and effectively.
Changing the way the city works with businesses is another issue that the group is reviewing. Morris showed a picture of a bowl of spaghetti to represent city processes. If businesses knew, up front, what they had to do to get a special use permit or a business license, things would go much more smoothly, said Councilman Paul Smedberg. Maybe there should be a basic check list at the beginning of the process. We hear, time and time again, that businesses dont like coming to Alexandria because city government is not business friendly. One of the keys to economic development is changing this perception.
Marketing or branding is another area of concern. We have to do a better job attracting businesses and tourists to the city, Euille said. Also, we need to find a way to encourage our own residents to spend their money here. Most people do not shop in their neighborhoods.
They also do not shop in the citys one major shopping center, Landmark Mall. In 1991, Landmark Mall was assessed at $204.9 million. The 2007 assessment was $84 million. The property has lost 59 percent of its value in 15 years.
There are many reasons for this, Jinks said. First, in-door malls throughout the country havent been doing well. Also, when Landmark was redesigned to become an indoor shopping center, it was not designed as a straight shot mall, with stores on either side of a center. It has corridors going off in several directions, which is a fatal design flaw for shopping malls.
Also, the new owner, General Growth, has undergone a number of changes since it purchased the property. They came to us about three years ago and asked us if we could keep up with their fast-tracked timetable. We rearranged a number of priorities and put the Landmark/Van Dorn corridor ahead of other planning studies we were undertaking. Since then, nothing has happened.
They have completely reorganized their development team and are now prepared to move forward with a true mixed-use project such as we all envision for Landmark. We hope that things will move forward, Jinks said.
The workgroup will present its recommendations to City Council at a work session in late spring. This will be followed by a public hearing and then Council will set priorities and develop an implementation plan. I hope that we can hold the public hearing and even set priorities before we recess at the end of June. That will give the staff time over the summer to work on an implementation plan, Euille said.