Arlington County Board Creates Financing Mechanism for Ballston Quart
Published on July 19, 2016
- County's first Community Development Authority
- Widely used redevelopment tool in Virginia
- Will issue bonds to help redevelop Ballston Common Mall
- Bonds to be secured by incremental tax revenues
- Will not affect County's debt capacity or bond rating
The Arlington County Board voted today to create Arlington's first Community Development Authority (CDA), a critical step in the public-private partnership that will transform the Ballston Common Mall into Ballston Quarter, a mixed-use urban retail project in the heart of Ballston.
The CDA gives the County a financing mechanism to fund certain public infrastructure costs associated with the Ballston Quarter public-private redevelopment.
"This is an exciting step forward in a project that will make Ballston a more vibrant, dynamic urban village and increase tax revenues for our community," said Arlington County Board Chair Libby Garvey. "The County has a history of making strategic investments in this mall that have paid off in the past. This new investment, in partnership with Forest City, the owner of the mall, will transform what will become Ballston Quarter and create an entirely different feel to the heart of Ballston."
The Board voted 5-0 to approve the Community Development Authority for Ballston Quarter. To read the staff report for this item, visit the County website
. Scroll down to Item #56 on the Agenda for the Tuesday, July 19 Recessed Meeting
The Board in November 2015 approved plans to redevelop the Ballston Mall
into Ballston Quarter, and approved a Letter of Intent with developer Forest City, to fund up to $55 million in public infrastructure costs related to the project, including improvements to the Ballston public garage, investments in Wilson Boulevard and North Randolph Street, and the creation of public plazas and mews.
With the establishment of the CDA, the County could fund $46 million of improvements through the issuance of CDA bonds (the bond size will be larger in order to meet investor requirements for reserves and other bond terms). In addition, the County plans to use existing transportation and garage improvement funds to pay for another $9 million in direct investment in infrastructure related to the project.
The County Board and CDA will act in late summer/early fall this year to authorize a development agreement and bond documents.
CDAs are widely used development tools in Virginia
A CDA is a development tool authorized by state statute that allows a jurisdiction to issue bonds to help facilitate redevelopment projects or public-private partnerships. In this case, the bonds will be backed with incremental tax revenues. Those are the revenues generated by additional real property, sales and meals taxes within the CDA boundaries over and above taxes generated as of an established base year -- in this case January 2015 -- and if necessary, by imposing a special assessment or tax on real property within the CDA boundaries to secure and repay CDA bonds.
CDAs have been widely used by Virginia localities in order to provide funds for public infrastructure investments and create incremental tax revenue growth.
The CDA district created by the Board will be comprised of three parcels owned by Forest City Enterprises, developer of the Ballston Quarter project. The CDA board will be comprised solely of members of the Arlington County Board.
The powers of a CDA are limited to those authorized specifically by the local governing body, and the bonds issued are not on the County's balance sheet and thus do not affect the County's debt capacity or debt rating.
In November 2015 the County Board approved site plans for the redevelopment
, and authorized a non-binding Letter of Intent that laid the framework for providing a mix of CDA bonds and direct public investments in order to achieve the redevelopment vision proposed by Forest City and supported by the County's long-term vision for the Ballston neighborhood.
Aging mall has been cornerstone of commercial development
The Ballston Common Mall, historically a cornerstone of commercial development in Ballston, has been the focus of past County investment, including funding for the mall's public garage and the construction of the Kettler Iceplex.
The redevelopment of the mall into Ballston Quarter
represents the next generation of the County's commitment and investment. The renovations will open up the existing mall, create more dynamic retail spaces along public plazas and mews, add a 406-unit residential tower with ground floor retail and improve adjacent parking and transportation facilities.
The County's investment in this extensive makeover will help reposition the retail center to better compete with other malls across the region and attract more retailers, shoppers, residents, visitors and businesses to the heart of Ballston.
The Ballston Quarter public-private partnership is projected to net the County approximately $150 million in direct tax revenues over a 30-year period.