Alexandria city officials have removed a Potomac Yard neighborhood from the boundaries of a controversial special tax district that will help finance a new Metro station in the city. Residents of Potomac Greens had argued that the more than 200 homes in their neighborhood should not have their tax bills increased by as much as $2,000 by including them in the district.
While there’s been talk of creating a special tax district around Potomac Yard since 1999, it was only a vague concept at the time, and homeowners who’ve already moved to the area should not have a new tax burden to bear, said Mark Jinks, deputy city manager.
The redrawn district, which won’t include the existing homes in the neighborhood, will only affect future residences and businesses in undeveloped portions of Potomac Yard.
“It was not something that … anybody that purchased a home there was aware of and considered when they bought into it,” he said.
The city needs the revenue from a new tax district to help operate a planned Metro station at Potomac Yard that will cost an estimated $270 million.
Once the station is built, officials will need about $20 million a year in tax revenue to cover operating costs. Officials estimate that removing the neighborhood will sap $200,000 annually from station operating funds.
The City Council had a similar change of heart during recent budget votes, when it rejected a proposed add-on tax for commercial properties that would have been used to pay for transportation projects.
“I don’t want to have any special tax districts for any existing properties in the city of Alexandria,” said Councilman Frank Fannon. “This is an existing property that has been there, and the community as a whole is going to share from the benefits of the Metro station anyway.”
The city may look to fill the funding gap through general tax revenue or transportation funds, according to Jinks. The City Council approved an increase in property tax in the 2012 budget, and directed the county manager to reserve a portion of the revenue for transportation spending.
Tax collection in the new district won’t begin until after the Metro station is built, which officials estimate could be 2016 at the earliest.
