By Olivia Anderson | [email protected]
City Council unanimously approved the first reading of an ordinance proposing the creation of a Landmark Community Development Authority during the Tuesday night legislative meeting.
If passed, the Landmark CDA would facilitate $86 million in infrastructure improvement bonds for the planned redevelopment of the Landmark Mall property and serve as a “backstop entity” to levy assessments on taxable property if tax revenue is not enough to pay the debt service. The redevelopment of the long vacant Landmark Mall will involve moving Inova Alexandria Hospital to the West End site and adding potential entertainment options and housing.
“This is one of another set of milestones to help enable the redevelopment of Landmark Mall and the creation of Inova Alexandria Hospital as well as the private development on that site,” Mayor Justin Wilson said.
The $86 million allotment would pay for almost all off-site infrastructure improvements and a portion of the on-site infrastructure enhancements, including parks, utilities, open spaces, road work and site preparations.
CDAs are financing tools that enable local governments to partner with private sector entities in order to provide infrastructure improvements or other services by taking on debt in the form of bonds.
According to Julian Gonsalvez, assistant city manager for public and private partnerships, the Landmark CDA is part of the transaction of the Landmark transition and development agreement that was executed earlier this year.
“This [investment] facilitates the city’s efforts to attract new businesses and economic development to the city in the furtherance of the city’s business development and revitalization strategies,” Gonsalvez said.
The total $140.25 million city infrastructure investment will be financed by $86 million in obligation bonds and $54.25 million from private developers.
The city’s bond debt will be backed by tax revenues generated from the site – like sales, auto and property taxes – and any increase in taxes will be used to pay for the improvements, according to city staff. In case the tax revenues are not sufficient, a special assessment will occur on taxable site parcels in order to ascertain how much money will be taxed on a specific property, but Gonsalvez said this may not be an issue.
“It seems right now that the incremental tax revenue should be able to cover any debt service and we shouldn’t necessarily require special assessments, but in any case, if there is any chance of the incremental tax revenues not covering debt service then we will have special assessments,” Gonsalvez said.
Councilor John Chapman raised concerns about the possibility of community members expressing opposition to special assessments, should that option be on the table.
“The thing I would be worried about is this body kind of going back on that and saying that we’re going to do special assessments and then what happens is that once we populate Landmark Mall with people, they have strong feelings against an assessment. We’ve seen that happen before,” Chapman said. “Are they coming to city hall to say, ‘Hey, come up with the money’ – is that what we’d be looking at?”
Gonsalvez said that because there is an inherent “lean on these properties” for special assessments, property owners will know going in that this is a possibility.
He also mentioned that the CDA itself will consist of five councilors.
“There’s overlap in that sense from the CDA board members and City Council so there’s the expectation that the CDA is not going against the City Council and just applying what was anticipated in this agreement,” Gonsalvez said.
Council is expected to make a final vote on the proposed ordinance at Saturday’s public hearing.
