If you build it, the funds will come.
So say Arlington County officials, who project that new tax revenues will more than cover the redevelopment costs in Crystal City once property values begin to rise with the addition of better roads, bus lanes and, eventually, a streetcar.
The Arlington County Board will vote Tuesday at 7 p.m. on a plan to capture a portion of that new property tax revenue to use exclusively for the $200 million projects as a part of the Crystal City 40-year development plan.
The tax increment finance plan — known as a TIF — calls for the county to assess current property values in a designated district to set a base for measuring growth. Then as property values increase with the district, a third of that additional revenue would be funneled into a special fund to pay for Crystal City improvements. The remaining two-thirds would go into the county’s general fund.
Under the county’s worst-case scenario, total TIF revenues would generate $82 million through 2016, leaving only $27 million dedicated as Crystal City funds.
First, Arlington must find a way to pay the up-front costs to get redevelopment started. Over the next six years, improvement projects will cost $72 million, and even the county’s best projections for tax revenue — $122 million by 2016 — wouldn’t cover the first phase of the plan. Arlington will seek federal and state funding and use its own transportation investment fund to finance start-up costs if the projected revenue falls short.
Once the projects are underway, the county expects TIF revenues of $798 million through 2028, even by its most modest projections — 33 percent of which would more than cover the $200 million total costs for all the proposed transportation improvements.
“TIF allows taxes that would already be collected anyway to actually stay in the area where they’re collected from,” said Angela Fox, president of the Crystal City Business Improvement District. “Before the Crystal City plan, there’s never really been a concentrated, direct investment in Crystal City.”
The proposed TIF area includes most properties in the Crystal City Metro area, as well as parts of Pentagon City and Potomac Yard.
While Crystal City will gain the most from the redevelopment plan, Pentagon City and Potomac Yard were included because they should also benefit from the improved transportation options, officials said.
“This ensures the overall health of the long-term plan, to ensure that it moves forward,” Fox said. “I think it makes sense to spend tax money in the place it’s collected.”
Calls to Vornado/Charles E. Smith and Lowe Enterprises, two of the largest property owners in the area that would be affected, were not returned.
