Tag Archives: economic development

Parking Is Driving Charlottesville’s Future

By. Neil Williamson, President

See the source image

Georgia Tech Hotel & Conference Center

Prediction: In 2056, Charlottesville’s Market Street Garage and City Hall Complex will be razed to make way for a new Hotel and Conference Center.

There are two distinctly different paths to this prediction, economic dislocation/collapse [think Detroit 2013] or a capstone of a visionary community investment program – interestingly, parking will be a leading indicator on the City’s direction.

Please let me explain.

The City’s recent decision to abandon their parking meter “pilot program” makes good sense in the short term but the long term issues surrounding parking are significantly larger than a few on street meters.  Currently, the existing garages are effectively full, with greater than 350 potential parkers on waiting lists for the opportunity to buy a monthly parking pass.

Commercial development activity continues in downtown with four prominent parking demanding projects currently in the pipeline. Conservative estimates place the new parking deficit [parking demand less parking provided] created by these developments to be 844 spaces [(386) Charlottesville Technology Center, (213) West 2nd Street, (160) Dewberry Hotel, (85) Vault Virginia].

If there is a future parking deficit exceeding 800 spaces based on projected demand, what would be the cost of building a parking deck to meet that need? It is widely accepted that structured parking costs roughly $25,000 a space to build (absent land costs). Thus, just the construction cost for an 850-space garage would be $21.25 million (absent land costs).

Last week, I had an over simplistic epiphany regarding the future of transportation. With the advent of self-driving cars (which will be a reality sooner than we realize), “park and ride” parking lots will be replaced by more efficient and less land demanding “ride and park” lots surrounding more walkable business and commercial districts. The car will drop you at your destinatSee the source imageion and drive to a nearby, but not too close, parking area.

This no longer science fiction and will completely rework the highest and best use of the land within the business district and increase the value of parcels currently too distant to serve as parking alternatives.

The average life of a parking deck is 50 years; with this pending innovation of self driving cars, the need for close in parking is reduced so how should Charlottesville deal with the next 33 years of market parking demand exceeding supply. The easy answer is build more parking but make the building flexible for reuse.

Progressive parking experts are now contemplating designing parking buildings with the clear vision of conversion to mixed use buildings later in their useful lifetime. By designing parking decks with higher ceilings, roughed in plumbing mains and central elevators (rather than on the corners). The infrastructure investment is higher than building a standard deck but it serves as insurance that the investment is not lost as demand shifts from parking storage to office/residential space.

If we accept that there is a parking deficit (for the next 30 years), what should be the role of the City in remedying this situation?

Option 1 – Charlottesville City Council could choose to do nothing.  Parking availability could go from bad to worse as downtown employees and customers are forced into mass transit (if available) or parking further from employment centers.

Option 2 – The City could build a lot on the recently acquired Guadalajara/Lucky 7 lot.  Based on the current political reality, I fail to see Charlottesville City Council showing the leadership vision necessary to spend $21+ million to address this clear and present danger to downtown economic vitality.

Option 3 – Charlottesville could enter into a Public Private Partnership (3P or PPP) on the Guadalajara/Lucky 7 lot.  The PPP Knowledge Lab defines Public Private Partnerships as:

a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance. PPPs typically do not include service contracts or turnkey construction contracts, which are categorized as public procurement projects, or the privatization of utilities where there is a limited ongoing role for the public sector.

The PPP option would require a challenging, lengthy process (likely 3+ years) to seek and identify appropriate partners, develop mutually beneficial agreements including financing options all prior to construction.

Back to our prediction:

If the Charlottesville selects the ostrich method of Option 1, the downward economic spiral that was exacerbated by the events of August 12th will continue.  Enterprises see the City failing to address the paring infrastructure issue and flee the City to locations in Albemarle County (Shops at Stonefield, Fifth Street Station, Reimagined Albemarle Square, Peter Jefferson Place, etc.) or elsewhere with ample free parking. This exodus would significantly reduce Charlottesville’s vitality, as well as its real estate and sales tax revenue.

The loss of revenue creates a reduction in City provided services; resulting in a citizen revolt and resignation of City staff and City Council.  After a special election, a new City Manager is hired and recommends (and council agrees) to sell off the City’s real estate assets (City Hall and Market Street Parking Garage) to raise much needed revenue.  The buyer gets the property for a song, demolishes the existing structures and builds a 15 story hotel and conference center (with parking deck).

or, in an alternative reality

https://i0.wp.com/www.savannah.com/wp-content/uploads/Aloft-Savannah-Hotel-Rendering.jpg

Savannah Aloft Hotel

Charlottesville chooses either Option 2 or Option 3, as well as other investments in the community. Enterprises and neighborhoods thrive, tax revenue continues to climb as the City’s business and residential density increases; autonomous cars and an enhanced transit service reduce the need for structured parking downtown.  As an economic development catalyst, Charlottesville chooses to move City Hall to the Strategic Investment Area (SIA).

The City enters into a Public Private Partnership with a developer to raze the Market Street Garage and City Hall and construct a seven story conference center hotel.  The four star hotel fronts on the Downtown Mall and the newly branded “Uber” Pavilion.

Both paths of these paths seem to end in the same place but the courage of City Council making long term infrastructure decisions drives the successful community while a lack of such vision creates economic uncertainty and possible municipal failure.

Charlottesville future will be decided by those in power at present.  Parking, and other municipal decisions, will determine which path the city travels.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credits: Savannah.com, Tripadvisor.com

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Free Enterprise Forum 2017 Top 10

By. Neil Williamson

top ten listWell, 2017 is the year many in Central Virginia would like to forget.  Beyond the far reaching ramifications of the year when Charlottesville became a verb on the national stage, The Free Enterprise Forum remained focused on monitoring local government, reducing regulatory burdens, promoting market based solutions, protecting property rights, and encouraging economic vitality.

None of this could be accomplished without the generous support of our donors and our regular readers. Thank you.  As we embark on our fifteenth year of operation,we remain vigilant, and “pleasantly” persistent.

Each year, we select the top ten blog posts for our year in review.  There were many other blog posts that reached honorable mention status.  I would be remiss if I did not thank our Field Officers Brent Wilson (Greene County) and Bryan Rothamel (Fluvanna County) for their significant reportage in 2017.

With apologies to the now retired David Letterman, here are our Top 10 posts for 2017:

#10 Albemarle’s $52 Million Rain Tax Department December 4, 2017

rain gifFarmers count on rain to feed their crops; Albemarle County is counting on the Rain Tax (AKA Storm water “fee”) to grow government with a 10 year budget that exceeds $52 million.

 

#9 Charlottesville’s Paid Parking ‘Canary in the Coal Mine’ ? March 14, 2017

canary in coal mine photo credit share.america.govWhile it is heartening to see Charlottesville position parking meters as a “pilot” and only a part of the parking solutions considered.. . Available parking is the life’s blood of most small businesses.

… The Free Enterprise Forum hopes the City Council will pay attention when the canary stops singing – local businesses (as well as the jobs and taxes they generate) will be at risk.

#8 The Wizard of Oz and the Rio/29 Small Area Plan March 1, 2017

Scarecrow, tin man, lionOver the years, some have considered the Cowardly Lion, the Tin Woodsman and the Scarecrow in The Wizard of Oz to be less than perfect heroes – I beg to differ I find them to be the best kind of heroes – those that must work together to achieve a goal.

Today, (3/1) as the Board of Supervisors considers the innovative Form Based Code land use planning for Rio/29 small area plan I believe this unlikely trio could provide important guidance

#7 Frederick Fleet and Charlottesville’s Form Based Code Charrette Sept. 7, 2017

Frederick Fleet photo credit 123people….Considering the current [Charlottesville] climate, I am reminded of Titanic crewman (and survivor) Frederick Fleet who was on duty when he saw a black mass ahead of the ship. He struck three bells and telephoned the bridge. Though the ship swung out of the way, he watched as an iceberg scraped the starboard side.

The Free Enterprise Forum is ringing the bell.

We fear this ill timed, but worthy, Form Based Charrette exercise will be met with a similar fate.

It is a shame.

#6 Fixing Charlottesville NDS Engine Light February 16, 2017

car-check-engine-lightIf you have ever driven with a “Check Engine” light illuminated, you have an idea of where Charlottesville’s Neighborhood Development Services (NDS) Department has been for some time.

Everyone (land owners, neighborhood associations, developers, etc.) agrees that something is seriously wrong but no one knows specifically what it is or, perhaps more importantly, how to fix it – until now.

#5 Albemarle Economic Development X Files March 29, 2017

i want to believeAlbemarle County says that it is in favor of economic development.  The former County Executive Tom Foley went so far as to say it is a “new day in Albemarle” regarding being open for business.  A couple of supervisors have even gone on the road attempting to drum up public support for economic vitality.

I find myself thinking of the 1990’s science fiction series the X-files where two FBI agents, Fox Mulder the believer and Dana Scully the skeptic, investigate the strange and unexplained, while hidden forces work to impede their efforts.

Just as Fox Mulder in the X-Files, I want to believe Albemarle, but the facts keep getting in the way.

#4 Changing Charlottesville Philosophy to YIMBY July 25, 2017Image result for yimby

…This is not a development problem, it is a political problem, and it exists nationwide.

I recently reviewed the YIMBY (Yes In My Backyard) San Francisco platform and I believe there are many parallels to Charlottesville….

We believe that San Francisco has always been, and should continue to be, an innovative and forward-looking city of immigrants from around the U.S. and the world. San Francisco is not full, and the Bay Area is definitely not full. Ours is an inclusive vision of welcoming all new and potential residents. Anyone who wants to should be able to afford housing in the Bay Area.

#3 Hindsight Report Asks ‘What If?’ August 1, 2017

…The Hindsight Report indicates that over the study period (2001-2016), Albemarle County received, from the study area, over $277 million in local tax revenue compared with the $212.9 million revenue sharing payments made to the City of Charlottesville (+$64.1 million).

….Had Charlottesville been successful in the annexation and the revenue sharing agreement not been in place, the City would have received $304.7 million in tax revenue from the study area during the study period compared with $212.9 million in revenue sharing payments from Albemarle County (-$91.8 million).

 

#2 A Tradition Like No Other–Albemarle Again Seeks to Ban Golf  April 5, 2017 and

Sunny Day? Albemarle Prohibits Greens, Endorses ‘Green’ April 24, 2017

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….By our back of the envelope calculations, rural recreation is an economic driver in the community representing nearly 2,000 jobs and an annual payroll of $40 million dollars.  In addition, rural recreation is a part of the fabric of Albemarle County.  The Free Enterprise Forum asks you to abandon this folly and utilize your limited staff resources to meet real needs of the community.

#1 Sayonara Shucet March 31, 2017

Shucet - Photo Credit CvillepediaLate yesterday afternoon (3/30), the embattled Elizabeth River Crossings (ERC) named former Virginia Department of Transportation (VDOT) Commissioner Philip Shucet as their new Chief Executive Officer.

In our three years of observation, we have grown to appreciate the charming manner in which Shucet manages (some might say manipulates) meetings and their outcomes…. As a facilitator extraordinaire, he has stayed true to the “Shucet Six” we first identified in 2014…. for now we say Sayonara Shucet, we wish you fair winds and following seas.

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But most of all THANK YOU, the readers and supporters of this blog and our work in Central Virginia.  Without your generous support, we would not exist, thank you!

BRING ON 2018!

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Fluvanna Ponders Proactive Rezoning for Economic Development Prospect

By. Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors will hear an application to rezone a property in the Zion Crossroads area at the December 20 meeting.  The rezoning was initiated by the Board of Supervisors in hopes of attracting a specific company looking to invest over $8 million in a new facility that would employ 30 to 40 people. The company’s name is not disclosed at this time.

The property is located along Memory Lane (State Route 698), approximately 0.35 miles south of the intersection of Richmond Road (U.S. Route 250). The parcel is within the Rural Residential Planning Area and is adjacent to AG Dillard and near the rear portion of the women’s correctional facility. It used to be part of the Cosner salvage yard.

The Cosner salvage yard use of the property was nonconforming to the zoning of A-1. For the property to become a salvage yard again, it would need to be I-2 plus get a special use permit.

The unnamed company would have to initiate a Special Use Permit (SUP), if the zoning change is approved. At that time, additional details would be released. The I-2 zoning does not allow a salvage yard by right but is a permitted use with SUP.

A county official declined to release any other information on the company other than the pictures that were part of the presentation slated for the meeting.  The pictures depict a much different salvage yard than how Cosner operated. The pictures show a cemented yard of cars and a large warehouse.Recycled-green-auto-parts-info-graphic-3

The new term of art for salvage yards is “Automotive Recycling” [See infographic to the right]. The car recycling Industry is the 16th largest in the United States, contributing $25 billion per year to the national Gross Domestic Product (GDP). The US automotive recycling industry employs around 100,000 people and earns around $25 billion a year. Nationally, there are around 7,000 vehicle recycling facilities.

During the Planning Commission meeting, officials said the company brings in cars through the warehouse for inspection then stores the cars in the parking area. Spare parts are shipped to interested buyers and there could be some local buyers. The company would pay taxes including machinery and tools.

The Planning Commission recommended denial of the rezoning on a 3-1-1 after two failed motions. First, the PC had a motion to approve that failed to get a second. Then, there was a motion to defer that did not get a second. A motion to recommend denial received a second but failed on a 2-2-1 vote. Shortly there after a motion to reconsider.

The Planning Commission had issues with the I-2 zoning in the rural planning area. The property is next to the community planning area and next to I-1 zoned property.

PC members at first started considering the economic development portion of the rezoning but then retreated to only considering the question, “Should this property be zoned I-2 on its own merits?”

One suggestion was rezoning on the possibility the zoning reverts back to A-1 if the interested company backs out of the arrangement. County officials said without the rezoning, the business would move on. Tony O’Brien (Rivanna District), the Board of Supervisors liaison to the commission, said there is little concern about the company’s intentions.

The Board of Supervisors will take up the issue at the 7 p.m. session on December 20.

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The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS®and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Photo Credits: Automotive Recyclers Association

Fluvanna Primes The New Business Pump

By. Bryan Rothamel, Field Officer

Fluvanna County is trying to be more shovel ready.

The Fluvanna County Board of Supervisors approved transferring $35,000 to start the Fluvanna Shovel Ready Sites Program (FSRSP). The program is set up to help Zion Crossroad area landowners move sites up the development tier.

Currently the county has no properties in the lowest of a five tier grading scale. The FSRSP will help move properties higher up the scale.

“The objective is to get as close as possible to tier five,” said economic development coordinator Jason Smith.

Steve Nichols

Staff stressed the program is assist landowners wanting to move closer to development.

“The program is not to tell citizens what to do with their property,” said Steve Nichols, county administrator.

The program would be administrated by the Fluvanna Economic Development Authority. The EDA and staff recommended a grant based program. The supervisors approved an interest free loan program to be repaid paid back after land use changed.

“There are a lot of places you can put shovel ready sites, but I think we all agree Zion Crossroads makes a lot of sense,” said Tony O’Brien (Rivanna District). O’Brien noted being briefed on a report that Virginia was losing out to development because of lack of shovel ready sites.

Also at the November 15 meeting, supervisors appropriated an additional $54,000 to construct the Farm Heritage Museum to be placed at Pleasant Grove, near the farm house.

The project includes over $250,000 from the funds raised and secured by the Fluvanna Historical Society. The historical society also pledged to give $5,000 over five years to help offset the $54,000 the county is outlaying.

The entire project is estimated at $340,000. The facility will be owned by the county. The bid for construction was awarded to Fuog/InterBuild. The company estimates it will take eight weeks to complete after building permit is issued.

Don Weaver (Cunningham District) was the lone vote against the county contributing $54,000 to complete the project. The county already gave $15,000 to complete site work.

“Should the tax payers pick up the tab,” asked Weaver.

Mozell Booker (Fork Union District) noted how much money was raised from resident and business donations. “That’s telling me there is community support,” said Booker.

Weaver voted with the majority to award the bid and accept funding from the historical society.

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The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS®and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Photo Credits: Fluvanna County

Fluvanna Water Project Out To Bid

By. Bryan Rothamel, Field Officer

turn on waterThey said the day would never come.

On November 1st, 2017, Fluvanna County put the Zion Crossroads water and sewer project out to bid.

Decades of discussion have culminated in the supervisors advertising for bid the $11.9 million project.

The request for bid will be done in three parts. The pipes, the mechanical and the water tower are all in separate requests in hops of getting better bids by companies that would otherwise have to subcontract.

After the supervisors completed a series of motions, the room applauded as the long chapter of Fluvanna politics is nearing a close. The project is expected to take 18 months to construct.

Economic Development?  Supervisors also initiated a rezoning process for an undisclosed business trying to relocate in the Zion Crossroads area. The project would be an investment of $8 to $10 million and bring about 40 jobs to the county. The business would be disclosed once the public hearings occur.

The property is currently zoned agricultural and is seeking an industrial zoning. The county is also working with the business to get a hookup to the aforementioned water project once water is flowing.

In other water news, after a closed meeting, the supervisors pledged $5,000 to Caroline County for proposed legal advice on fighting Aqua America’s proposed rate increases. Lake Monticello is served by Aqua. Caroline County has several subdivisions also served by Aqua, estimated at 30 percent of its population.

Caroline reached out to other home owners associations and locality governments for assistance in teaming together to fight against Aqua’s request. Caroline estimated the cost of legal advice and State Corporation Commission expert help at over $75,000.

Other presentations during the November 1st  meeting included one from an official from Fluvanna Girls Softball League (FGSL). FGSL wanted the county to loan $25,000 to the private organization to field improvements at the Carysbrook field. Work included leveling the infield and outfield as well as replacing the backstop and adding an outfield fence.

The proposed loan was $25,000 paid over five years with 2 percent interest. Unfortunately, supervisors were briefed by the county attorney they have no legal authority to loan money to FGSL, a private organization. Because Carysbrook is county property, the county could construct the requested work and FGSL can voluntarily contribute to the county’s coffers.

Chris Fairchild, FGSL official, said even if the supervisors said they didn’t want to be paid back, FGSL wants to pay for the improvements. Supervisors and the parks and recreation department will work with FGSL to get work scheduled as previously planned.

Over the course of the last 15 years, FGSL has invested $168,000 in field improvements including construction of dugouts and concession stand.

Supervisors were briefed on preliminary budget projections of the Fluvanna County Public Schools system. Chuck Winkler, superintendent, is projecting a request of $2.2 million over last year’s budget.

That estimate included standards of quality changes that are partially funded by the state. He included the entire figure but noted if the state implemented, it would have a huge state budget implication. He said the likelihood of being passed was slim, but included it as a precaution.

Also in Winkler’s increase were pay raises and increase in health care costs. He also had additional money for technology improvements. He noted that if technology was funded again by Capital Improvement funds, it lowers the county’s per pupil spending.

The supervisors will next meet on November 15 at 7 p.m.

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The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS®and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Unintended Consequence–Albemarle’s AirBnB Black Market

FORUM WATCH EDITORIAL

By. Neil Williamson, President

When a new business concept is successful the first thing the government attempts to do is tax it.  What is the second thing? – regulate it.  In an interesting ‘Short Term Rental’ twist of fate, Albemarle has completed the first thing ensuringBlack Market photo credit news.softpedia but is about to put those revenue sources (and others) in jeopardy by driving much of this thriving new industry out of the open and into a Black Market.

Please let me explain.

Back in June 2017, Albemarle joined many Virginia localities in updating its tax code to capture ‘transient lodging’

TAX CODE
At its June 14, 2017 Board meeting, the Board of Supervisors amended the County Code §15-900 and §15-901 to enable the County to impose taxes on residential transient lodging, previously not included in this regulation. They also amended County Code §8-616 to explicitly list short-term rentals on the list of businesses subject to the business,professions, and occupations licensing (BPOL) tax requirements.

Albemarle County has been engaged in a “community conversation” regarding the regulation of short term rentals (AirBnB, HomeStay Charlottesville, etc.).  Rather than dealing specifically with the impacts of such rentals, with ordinances already on the books, Albemarle is seeking to restrict the number of rentals any property might be able to book in any given calendar year. This is a mistake.

According to Allison Wrabel’s article in Monday’s (10/30) Daily Progress, our good friend, Travis Pietila, of the Southern Environmental Law Center (SELC) spoke out last week’ Planning Commission meeting about this very issue:

“We need to make sure that the revenue to be gained from homestays does not lead to building new houses in the rural area that would not otherwise be built, and it’s critical that the limits put in place to keep that from happening are enforceable,” he said.

Pietila said that the 90-day limit proposed for whole house rental was too high and that a 30-day limit seemed much more appropriate.

“But a more fundamental concern is that the limits based on a number of days a property can be rented would prove unenforceable,” he said.

While we firmly disagree with SELC’s position that property owners should be restricted from building new homes on parcels that have that fundamental property right, we concur that limits based on a number of days would not only prove unenforceable – it not only starts a negative domino effect on transparency and taxation – it is an unfair restriction on property rights.

Negative Domino effect – if allowed to only permitted to rent my house on a short term basis for 30 days a year, that is exactly what some savvy property owner will claim.  If there is market demand for greater than 30 days a year (ie: weekend from April 15 to December 31 = 76 days), the incentive is to rent the space and not claim the rental on the TOT form, lower the BPOL payment, don’t report the rental revenue for 46 days of occupancy on state or federal income tax forms.

This scenario fits Investopedia’s definition of a Black Market:

Economic activity that takes place outside government-sanctioned channels. Black market transactions usually occur “under the table” to let participants avoid government price controls or taxes. The black market is also the venue where highly controlled substances or products such as drugs and firearms are illegally traded. Black markets can take a toll on an economy, since they are shadow markets where economic activity is not recorded and taxes are not paid. In the financial context, the biggest black market exists for currencies in nations with strict currency controls. While most consumers may shun the black market because they consider it sleazy, there may be rare occasions when they have no choice but to turn to this necessary evil.

What is gained by this charade?

More from Wrabel’s article:

Commissioner Pam Riley said she is concerned about the impact on local housing, especially as the county considers adding apartments and townhomes.

“The more you remove what could be housing units, really at any price range, from the long-term rental, you’re really exacerbating your affordability problem,” she said.

The Free Enterprise Forum finds itself again agreeing with SELC’s Pietila’s  economic analysis, if not his property rights restriction on that analysis:

Pietila said officials should consider limiting whole-house rentals in the rural area to existing houses.

“This would give existing homeowners the ability to earn some extra income and help defray housing costs, while reducing the risk of encouraging new house construction,” he said.

We have seen anecdotally, the short term rental income provides the revenue needed that makes the housing ‘affordable’.  If a unit (home, apartment, townhouse) has a monthly cost (mortgage/rent) of $900 a month and it is rented four weekend days at $150 a night, that generates $600 in revenue, this income helps offset housing cost.  Anecdotally, we have witnessed families visit their parents for football weekends and pay their entire monthly housing cost with the revenue.

Commissioner Daphne Spain is quoted in Wrabel’s article questioning the property owner rights regarding short term rentals:

…Spain said she noticed that many comments said that people should be able to do what they want with their homes to generate income.

“I don’t give much credence to that, because if they wanted to open a brewery or a speakeasy to earn money, or a brothel, that wouldn’t be allowed, so there are limits for the public good on what a person can do with their home and these are all residential areas,” she said.

Spain’s argument is really comparing apples and oranges. Unlike a brewery (or even brothel), the use of the property is still residential – it is just a question of the length of stay in residential.  How are the impacts different?

Which has more impact on me as a land owner, my neighbor renting out his house on weekends or a family with 5 teenagers moving in next door?

The reality we see from the Planning Commission is a clear anti short term rental bias.  Albemarle County would be wise to focus on mitigating any impacts of short term rentals [under existing ordinances] and skip any fatally flawed attempt to strangle this thriving new business with onerous regulations that are unlikely to be followed and will be impossible to enforce.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

What Albemarle Can Learn From Amazon’s HQ2 Search

By. Neil Williamson, President

This afternoon, in an alphabet soup of a joint meeting Albemarle County’s Economic Development Authority (EDA), Planning Commission (PC), and Board of Supervisors (BOS) discussed Site Readiness from a Site Selectors Prospective in an effort to focus on growing business.

Timmons Group Joe Hines presentation “Are your sites and community prospect ready?” was eye opening to many in the room.  Hines suggested the locality should own or control parcels under consideration and that the locality needs to make infrastructure investment on the parcel to become most attractive in the site selection process.

Assistant County Executive Lee Catlin (in likely her last public presentation prior to retirement) used much of Hines Presentation talking points to present an overview of the Deschutes Brewing competition that Roanoke won.   The discussion was very good and highlighted the areas where Roanoke was better prepared for the opportunity.  (Check out  @Neilswilliamson Twitter feed for more details)

In a seemingly unrelated news event, Business Insider reports on Amazon’s search for a new 2nd North American Headquarters.

The company’s press release lays out a few details of what it’s looking for: metro areas with more than one million people; a “business-friendly” environment; a strong technical workforce; be “urban or suburban locations with the potential to attract and retain strong technical talent,” and “communities that think big and creatively when considering locations and real estate options.”

Ignoring the obvious million people hurdle, how do you think Albemarle, or Charlottesville for that matter stacks up regarding “communities that think big and creatively when considering locations and real estate options”.

Considering Catlin’s presentation,  one portion that was not mentioned was the “community” response to Deschutes.   Over two years ago, I wrote in Da Lessons from Deschutes.

4.  While the Supervisors recognize the economic reality, the public is notnimby1 yet sold on the concept of increased economic development.  This lack of public support is seen by outsiders as “unwelcoming” and is clearly a competitive disadvantage.   As Lisa Provence reported in C-ville regarding the Planning Commission denial of the CPA, some are not convinced that economic development (AKA Growth) is a good thing:

 

Watching the various states and localities compete for the Amazon 2nd Headquarters, I am amazed by the deftness of their marketing and efforts to show community support:

This challenge is actually an opportunity.  Notice Amazon did not say “governments” who think big and creatively.  They are looking for a community that will not only welcome them but allow them to become one with them.  The communities competing for HQ2 are attempting to present their community as complimentary to the creative class.  Don’t think this is only in big time economic development.  Roanoke’s “Hashtag” campaign was a big part of the Deschutes Decision.

Albemarle Supervisor Rick Randolph thought the presentation corrected a “myth” that Albemarle lost Deschutes – he said instead Roanoke won it.  Sounds like splitting hairs to me but I still have the core question.

Is Albemarle ready to energetically embrace economic development?

Randolph said he was supportive of “smart” economic development where jobs went to Albemarle citizens and no traffic was generated – sounds like a unicorn hunt to me.

Supervisors Liz Palmer and Brad Sheffield both expressed interest in redevelopment sites.

One positive suggestion came late in the meeting from Planning Commissioner Jennie More.  More thought that economic development should be a part of the community vetted Master Plan process.  This might be a first step in developing the kind of community buy in that can be more than “accepting” of economic development instead can cheer for it.

This meeting was a good first step, but I remain concerned that not everyone is equally energetic about economic development and the community is clearly not yet fully engaged.

If everyone understands the net benefits of economic development and brings positive energy to support the effort, perhaps then Albemarle can be in a position to “Win”.

If not, we may want to ask if Albemarle should be (or is) in the game at all.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Fluvanna Financing Fun

By. Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors approved debt financing plan for Zion Crossroads water project at the April 19th meeting.

The project doesn’t have final design or numbers yet, but the possible funding source will be the Virginia Resource Authority (VRA).

The supervisors approved applying in the summer bond pool with the VRA. The application will be for $10 million, the latest estimated cost of the project. The deadline for the application is May 1.

The county should get a final design and cost in the next month. At that time, the supervisors can decide how much financing they want to use and amend the application. The county administrator recommends putting $4 million from the county’s cash balance to the project.

In regards to current county debt, the high school bonds have a window of about 100 days in the fourth quarter 2018 where $57 million can be reinvested. The county has two known options.

One option is to issue a ‘float agreement’ where the county contracts with an investment firm now at a locked in amount. The investment firm gives the county a set amount now with the hopes the firm can invest that money for a better return when the window opens.

If the county issued a float agreement right now, it is estimated it would bring in a $74,000 immediate payout. They could also ask for a specific amount and once a bid comes in at that price, accept it. The county can issue the float agreement at any time but as the window nears, firms will be less like to ‘bet’ high.

A second option is to purchase a state and local government series (SLGS) when the 100 day period occurs. The only issue is the SLGS are sometimes blocked to be purchased. Two years ago SLGS were not allowed to be purchased for most of the year.

Supervisors directed staff to ask more questions about possibilities to Raymond James, the county’s financial adviser.

At April 12th meeting, the supervisors approved the FY18 budget and tax rates on a 4-1 with Don Weaver (Cunningham District) dissenting.

The real estate tax rate is set at $0.907 per $100 assessed. The personal property stayed at $4.35 per $100. The business rates decreased in an effort to help local businesses.

Late changes to the budget included giving staff a 2 percent raise to start January 1, increasing the budget for county attorney, additional funds for the Sheriff’s Office and Earth Day hazardous waste collection. The supervisors also are using cash to purchase a new brush truck for emergency services.

More public was present at the meeting but overall the budget season had few county residents active in the process.

The supervisors will next meet on May 3 at 4 p.m. for a regular session. A work session on county projects, including the Zion Crossroads water project, is expected before the May 17 meeting.


https://freeenterpriseforum.files.wordpress.com/2015/10/bryan-rothamel.jpg?w=151&h=151The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS®and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

The Banana Boat and Charlottesville’s Proposed BPOL Reform

By. Neil Williamson, President

My first car was a yellow 1976 Ford Pinto Station Wagon 1977_Ford_Pinto_rear photo credit motoburg(fondly referred to as the ‘Banana Boat’).  Over time, I upgraded the stereo and dressed up the interior but it never really changed the fundamental fact that my teenage “ride” was a yellow Pinto Station Wagon.

This car came to mind as I watch Charlottesville consider important and proper changes to their Business Professional Occupancy License (BPOL) tax.

Please let me explain.

On March 6th, Charlottesville City Council will be considering changes to their BPOL Ordinance designed to promote fairness to mid-sized businesses.  Currently, any business operating in Charlottesville is required to pay BPOL based on its gross receipts. In fiscal year 2016, the BPOL tax generated $6.9 Million dollars in revenue for the City, 4.4% of all City revenue.  All 38 cities in Virginia charge BPOL.  The Free Enterprise Forum believes this is an unfair tax as it is based on gross receipts and has called for it repeal.

Staff provided several examples of the challenges under the existing ordinance:

Charlottesville businesses grossing $50,000 or less per year pay a flat fee of $35 and businesses grossing more than $50,000 pay based on a rate (established in State Code and as determined by the particular type of business) multiplied by annual gross receipts.

As an example, a veterinarian grossing $49,000 per year pays $35 for an annual business license. A veterinarian grossing $51,000 per year pays according to the standard rate for veterinarians and other similar professions ($0.58/$100), and would pay a rate-based fee of $295.80.

A graphic designer grossing $49,000 per year pays $35 for an annual business license. A graphic designer grossing $51,000 per year pays according to the standard rate for graphic designers and other similar professions ($0.36/$100), and would pay a rate-based fee of $183.60. The effect is that similar small businesses with very similar gross receipts end up paying very different fee amounts.

Meanwhile in neighboring Albemarle County, businesses earning up to $100,000 pay a flat fee of $50.  Therefore the business starting out (>$50,000 gross revenue) pays less in Charlottesville until they cross the $50K threshold and then they pay much more.

The Commissioner of the Revenue has reported of hearing significant concerns from taxpayers about what can be a dramatic jump in their BPOL costs as they cross the $50K gross annual threshold.  It is important to recognize that $50K in gross revenue is the point where many businesses may be at the tipping point between viability and failure.

As the staff report outlines:

In an effort to attract, retain, and encourage small businesses in the City of Charlottesville, the Commissioner of the Revenue and City Treasurer are proposing a modest change to the fee structure used to assess BPOL:

  • Businesses grossing $50,000 and below continue to pay $35 license fee
  • Businesses grossing $50,001 to $100,000 pay a $50 license fee
  • Businesses grossing over $100,000 pay the license fee based on applicable BPOL rate

This proposed change would benefit small businesses within the City of Charlottesville by reducing the license fee paid by businesses earning between $50,000 and $100,000. Staff estimates that approximately 450 businesses would benefit from this structural change. There would also be a comparable change in the technology business incentive as well. We are recommending that these changes take place for the upcoming assessment year of 2018.

The Commissioner and Treasurer would note that this is a relatively modest proposal that seeks to provide meaningful relief to small businesses in our community within limited statutory, system, and budget constraints.

These changes do not come without cost.  Staff estimates adoption of this proposal would potentially reduce BPOL revenue by $93,000.

While the Free Enterprise Forum has consistently called for the REPEAL of BPOL, we are supportive of the reforms contained in the proposal.  In addition, we commend the Commissioner of the Revenue and the Treasurer for thinking beyond the bean counter box and seeking reform.  When properly implemented, we see these changes as leveling the playing field with adjoining localities, increasing fairness for small to mid sized businesses and promoting economic development.  1979 pinto cruising wagon

We would be remiss if we did not remind the City that regardless of changing the paint job, adding new tires and a kicking new stereo, you are still driving a Pinto Station Wagon.

Yes, repeal would be better but we support these commonsensical BPOL reforms.

Respectfully Submitted,

 

Neil Williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credits: Motorbug.com, Autospost.com

Is The Jury Still Out on Albemarle Courts Relocation?

By. Neil Williamson, President

Tonight (10/24) the Albemarle County Board of Supervisors will take “public input” regarding the albemarle-courthousepossible relocation of their courts system.  Of the five options on the table, all but one keeps the courts in the City of Charlottesville. While the Free Enterprise Forum would like to have a favored option, we do not believe the case has been made for any option — considering how far along the process is, we are astonished at the basic questions that remain unanswered.

To review here are the five options:

OPTION 1: DOWNTOWN/LEVY EXPANSION
OPTION 2: RELOCATE COUNTY & CITY GENERAL DISTRICT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 3: RELOCATE COUNTY GENERAL DISTRICT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 4: RELOCATE COUNTY GENERAL DISTRICT COURTS & CIRCUIT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 5: RELOCATE COUNTY GENERAL DISTRICT & CIRCUIT COURTS TO COUNTY SITE

As we examine the decision matrix provided by the county, we have many more questions than answers.

Here are our top ten inquiries:

  1. Has the city offered any economic incentives to support any of the City based options? (see last week’s blog post)
  2. Why does option 1 (stay downtown) cost $12,500,000 more than building in option 5?
  3. Why does it cost $18,000,000 to put the General District Court at the County office building when it appears that most of the infrastructure is already there?
  4. If you build a new county admin facility, where will it be located and, how much does it cost?  Where is that cost shown?
  5. Do options 2-5 factor in the lost property tax revenue for whatever parcel is acquired?
  6. The matrix seems to indicate that options 2-5 strongly support the County’s strategic redevelopment/urban place making priorities.   Doesn’t that really depend on where the County offices are built and how?  It could eat up a bunch of property in the urban area and create little long term value.
  7. Will option 5 allow a mix of uses on their site?  What of creating affordable housing over top of the new county offices?
  8. It seems that you are assuming any new construction by the County in the County has high economic development value.  Why?  What assumptions have been made to draw that conclusion?
  9. Is taking urban county property off the tax rolls good for economic development? Will the development area be expanded to replace this lost land?
  10. Why is the construction risk higher for option 1 than any of the other options?

The public input offered can only be as good as the information provided to them to base that input.  We forwarded these questions to Albemarle County early last week and they indicated they hoped to have answers in their presentation tonight. If that is the case, the public will have limited time to process the information before the public input session closes.

Regardless, these questions need answers before anyone should make a decision on the future location of the court.

The jury is not “still out” — the full argument has yet to be presented.

Respectfully Submitted,

Neil Williamson, President

_____________

Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website http://www.freeenterpriseforum.org

Photo Credits: Albemarle County