Fairfax County is looking at Reston’s Lake Anne area and the Huntington Metro station as the next candidates for a program that offers tax breaks and other incentives to jumpstart revitalization efforts.
Both areas have proven difficult to redevelop and are seeing stagnant real estate values, despite their prime locations and the county’s overall economic growth, according to Elizabeth Hagg, director of the Fairfax County Department of Planning and Development’s community revitalization section.
If Lake Anne and Huntington are added to the Economic Incentive Program (EIP), they would join six other designated commercial revitalization districts (CRDs), including Bailey’s Crossroads and Seven Corners, McLean, Annandale, Lincolnia, Richmond Highway and Springfield.
“The Economic Incentive Program really was to look at certain areas that have not had significant development activity relative to their comprehensive plan potential,” Hagg told the Fairfax County Board of Supervisors on Tuesday (June 18). “They have been experiencing declining competitiveness, certainly relative to some of the newer areas in the county, and in general, they suffer from a kind of outmoded land development pattern and architectural designs.”
Approved by the Board of Supervisors on Sept. 15, 2020, the EIP offers developers a 10% reduction in site plan fees and partial tax abatements for up to 10 years based on the difference in their property’s value before and after it’s redeveloped.
What the Economic Incentives Program has done so far
At the board’s economic initiatives committee meeting, Hagg reported that the program has produced eight approved development applications so far, including at least one in each of the eligible districts except for Lincolnia.
“We’re very happy to see this much activity, and that they’re sprinkled all around in the areas,” Hagg said, noting that the county is “still working on” Lincolnia.
The Skyline redevelopment in Bailey’s Crossroads was the first project to reach substantial completion — the point when the developer can start getting the tax breaks. The first of three office buildings being converted into live/work units was finished last year, and the other two are on track to be substantially complete by the end of 2024.
Though construction has taken longer than expected due to “some snags with utilities and what have you,” the developer will receive an estimated total tax abatement of $18 million for all three buildings until June 30, 2032, when Bailey’s Crossroads and Seven Corners will stop being eligible for the EIP, according to Hagg.
The 10-year time frame for the tax break varies between districts, taking effect on July 1 for Richmond Highway and Springfield and on Jan. 1, 2025 for Annandale, McLean and Lincolnia.
Hagg says the EIP can be “an invaluable tool to jumpstart projects that might not otherwise have moved forward,” citing the developers behind a 439-unit multi-family residential building now under construction at Springfield Town Center and a planned residential building on Richmond Highway.
“These are real testimonials to the difference that this financial incentive has made, particularly when we’re in a challenging real estate market right now,” Hagg said.
Expansion proposed to Huntington and Lake Anne
The county now hopes to spur similar activity in Huntington and Lake Anne.
The Huntington EIP area would encompass approximately 61 acres including and around the Metro station, where topographical challenges, including “an extremely steep slope,” and potential impacts from the upcoming Richmond Highway widening, among other issues, have made redevelopment a struggle, according to Hagg.
The Washington Metropolitan Area Transit Authority enlisted the developer Stout & Teague in 2019 to oversee the sale or lease of 12 acres around its station to other developers; the last parcel was sold to Aventon Companies in 2021 for an apartment building completed last year. The Board of Supervisors also amended the Huntington Transit Station Area’s comprehensive plan in 2022 to allow more mixed-use development.
However, some projects have fallen through, including a long-sought redevelopment of the Huntington Club condominiums and an expansion of the Riverside Apartments. An application to build more housing instead of a planned office or hotel on Huntington Avenue is scheduled for a Fairfax County Planning Commission public hearing on July 10.
The stalling of the Huntington Club project was a particularly big blow. According to Hagg, the condos increased only 8% in assessed value from 2005 to 2020, and sales prices dipped from $221,000 to $185,000. In comparison, assessed property values in the county as a whole grew 112% over that time, and the market value for a multi-family home in 2020 was about $265,000.
“In the past, we have purposely avoided Metro sites [for the EIP], thinking the Metro station alone incentivized redevelopment,” Hagg told the Board of Supervisors. “This particular Metro site has some anomalies I think that need extra incentives to realize the many visions and plans we have had for it.”
Lake Anne, a 44-acre, 1960s-era village center already designated as a commercial revitalization area, was previously proposed for inclusion when the EIP launched in 2020, but county officials decided that “additional study” was needed, Hagg says.
A consultant found in 2021 that the aging village center needs over $37 million in repairs, and a “complex” ownership set-up involving multiple small residential and commercial property owners, managed by the Lake Anne of Reston Condominium Association (LARCA), has further complicated efforts to revitalize the area.
A study to establish an economic vision for Lake Anne is underway, advancing to a third phase focused on evaluating the feasibility of its proposals — and property owners’ willingness to participate — in February.
Like in Huntington, Lake Anne’s property values have been slow to rise compared to the county overall, growing by about 40% from 2002 to 2023 or as little as 21% in the case of the Washington Plaza Baptist Church site, according to Hagg.
Those assessments might’ve “looked even worse” if the Lake Anne Fellowship House hadn’t gotten replaced in 2022, Hunter Mill District Supervisor Walter Alcorn said. He stressed that any redevelopment would need to respect the area’s historic nature and preservation rules laid out in Reston’s comprehensive plan.
“Some of these [properties], they’re not keeping pace with the overall market,” she said. “They face significant financial liabilities with some deferred maintenance and infrastructure costs, so we are looking at an EIP here to help catalyze some redevelopment.”
Supervisors question criteria, potential loopholes
If approved, the Huntington and Lake Anne EIP areas would take effect on Jan. 1, 2030, a time frame based on what developers say they need to “realistically bring a project online,” Hagg says.
To qualify for the incentives, projects would need to involve commercial, multi-family, industrial or mixed-use development, and they should consolidate at least two parcels that total two or more acres. The second criteria is intended to encourage unified, rather than piecemeal, development.
However, Braddock District Supervisor James Walkinshaw questioned how the county could stop a developer from breaking up and then reconsolidating parcels exclusively to get a tax break.
“To me, if someone’s gaming the system, it damages the credibility of the program,” Walkinshaw said, suggesting the county’s ordinance may need to be tweaked to prevent those practices.
According to Corinne Lockett from the county attorney’s office, the board has discretion over whether to approve a tax abatement for a particular project, but that loophole is “something we can tighten up.”
Other supervisors pushed for more detail on how the county decides which areas to include in the EIP. Chairman Jeff McKay suggested an area could “quasi-automatically” get reviewed based on the county’s economic data to ensure the program is “fair and responsive to what’s actually happening on the ground.”
Sully District Supervisor Kathy Smith noted that sluggish property values can reflect insufficient maintenance and other factors, not just a property’s location.
“Valuation is one piece of it,” Hagg said. “We also looked at development activity and the challenges of achieving the comprehensive plan’s vision, and these areas, both Lake Anne and Huntington, have struggled mightily to achieve that vision. So, it’s a combination of factors that feeds into these selections.”
