For Immediate Release
Tuesday, October 26, 2010
Contact: Mary Curtius 703-228-7943 (voice) 703-228-4611(TTY)
ARLINGTON, Va. – The Arlington County Board today approved the creation of a tax increment financing area and fund to help pay for infrastructure improvements in support of the Crystal City Sector Plan. Board members emphasized that this is not an additional or new tax.
This will be the first time that the County uses this tool in support of large scale infrastructure improvements. Approval of the funding mechanism is an important initial step toward realizing the vision for a more transit-oriented, walkable, lively Crystal City as laid out in the Crystal City Plan.
“This mechanism will help us fund a streetcar and other infrastructure improvements that will help transform Crystal City, an area vital to the ongoing economic health of the County,” said Board Chairman Jay Fisette. “It means that initially, a third of the revenues generated by growth in property assessments in this area will be used to make improvements within the area. This reflects our commitment to turn our vision for Crystal City into a reality.”
The Crystal City Plan, adopted by the Board in September, includes approximately $207 million of public infrastructure improvements in streets, transit and public open spaces over the next 20 years. Tax increment financing will pay for a significant portion of these costs, particularly in the plan’s latter years.
Tax increment financing (TIF) is a mechanism frequently used across the nation. It supports development and redevelopment projects by capturing the increase in property tax revenues created by the development or redevelopment area and investing a portion of those funds in improvements associated with the projects. Unlike a special district, it is not an additional or new tax; it redirects and segregates a portion of the net new property tax revenues for a specific purpose.
The amount of TIF revenue is determined by setting a baseline assessed value on a certain date (January 1, 2011, in this case) and in each subsequent year tracking the incremental increase in assessed values relative to the base year.
For an example: A hypothetical property in the redevelopment area is valued at $1 million as of January 1, 2011. The following year, the same property is valued at $1.1 million, an increase of $100,000. All, or a portion, of the real property tax revenues attributable to the $100,000 increase would be segregated in a separate fund. Under the action taken today by the County Board, property tax revenues up to $33,000 of the incremental increase would be dedicated to the TIF fund.
The Board voted 5-0 to approve creation of the TIF. For more information on how tax increment financing works, read the staff report (Item #38 on the Oct. 26, 2010 Agenda).
Arlington, Va., is a world-class residential, business and tourist location that was originally part of the "10 miles square" parcel of land surveyed in 1791 to be the Nation's Capital. It is the geographically smallest self-governing county in the United States, occupying slightly less than 26 square miles. Arlington maintains a rich variety of stable neighborhoods, quality schools and enlightened land use, and received the Environmental Protection Agency's highest award for "Smart Growth" in 2002. Home to some of the most influential organizations in the world - including the Pentagon - Arlington stands out as one of America's preeminent places to live, visit and do business.