Tysons is an overall financial boon for Fairfax County, generating more tax revenue than it takes, a recent analysis commissioned by the Tysons Community Alliance (TCA) found.
Presented on Nov. 21 as part of the TCA’s first Tysons Quarterly Market Report, the net fiscal impact analysis conducted by the consulting firm HR&A Advisors suggests that Tysons is generally living up to its reputation as the county’s “economic engine.”
Over the past year, Tysons has generated $342 million in tax revenue for the county, primarily from property taxes, while receiving $188 million in return to fund county infrastructure and services, such as schools and police and fire support, according to HR&A Director Rachel Waldman.
That amounts to a net fiscal surplus of $154 million, or $1.82 in revenue for every dollar invested by the county.
“A positive net fiscal impact illustrates a region’s ability to provide high-quality services,” Waldman said during a webinar to present the report. “… What this was telling us is that Tysons really is a key driver to one of the things that makes Fairfax County one of the premier destinations to live, work and play in the D.C. region.”
About 70% of the tax revenue produced by Tysons is from real estate taxes, with sales and business taxes then combining to contribute about $50 million, Waldman said. Per the quarterly report, the area’s real estate currently has a total assessed value of $18 billion, up from $14 billion in 2018, though it has stayed relatively flat since 2021.
While the overall amount of revenue generated by Tysons has increased by $12 million since 2019, sales tax revenue actually dropped over the past year — a change that Waldman attributed to declining car-related sales.
Tysons remains home to its fair share of auto dealerships — perhaps most prominently, the sprawling Koons Chevy and Chrysler sites off of the Route 123 and Route 7 interchange, but the landscape along Leesburg Pike (Route 7), where the businesses long concentrated, has shifted in recent years.
With the arrival of Metro’s Silver Line signaling a push to transform Tysons into a more transit-oriented community, many dealerships have closed in anticipation of redevelopment, though not all projects have come to fruition yet. The Koons property, once circled by the developer Comstock, hit the market earlier this year as a potential mixed-use “village center.”
The drop in tax revenue from auto sales, in other words, may be a promising sign for Fairfax County’s vision of Tysons as an urban downtown where people live as well as work and visit, TCA CEO Katie Cristol observed.
“When we think about the future of Tysons and how the base is shifting from being a place that has plenty of car dealerships and other kind of major retail centers, it really is becoming more of a 24/7 community with a lot of residential development,” Waldman said.
According to Waldman, over a third of the property taxes generated in Tysons now come from residential development, a share expected to increase as more projects materialize.
Tysons has over 19.7 million square feet of residential development, totaling 16,064 units, the TCA’s quarterly report found. The Somos at McLean Metro and Exchange at Spring Hill affordable housing projects currently under construction will deliver 976 more units, and the area could get another 27,380 units from developments that are either approved but unbuilt or under county review.
Waldman anticipates that Tysons’ tax base and economy will continue to diversify in the coming years, with residential growth easing pressure on the commercial sector, which is more of a mixed bag right now.
“I think it’ll be really fascinating in a few years, once some of those mixed-use residential sites do develop and stabilize, to do the point-in-time comparison,” she said. “I bet you’ll be able to see, while certain types of tax revenues may have declined, you’ll start to see … property tax revenues from these residential properties kind of offset that.”
