Virginia Real Estate, Land Use & Construction Law : Virginia Construction Lawyers & Attorneys : Bean Kinney & Korman Law Firm : VA Real Estate, Land Use & Zoning

Arlington County has been widely criticized for its aggressive lawsuit over the proposed Interstate 395 HOT lanes expansion, which includes allegations that individual state and federal officials committed civil rights violations in approving the project. In a time of significant economic troubles and governmental budget challenges, the county has reportedly paid over $1 million in legal fees advancing this case.

The county may now be reaping an ugly harvest from the negativity it is sowing. Arlington County, with the support of the business community and in particular the Arlington Chamber of Commerce, is currently seeking renewal of a transient occupancy tax that charges Arlington hotel guests and uses those funds directly to promote tourism. In a hearing on the bill in front of the General Assembly’s House Committee on Finance chaired by Del. Timothy Hugo, R- Fairfax.

Del. Hugo reportedly punted on action on the bill until a representative of Arlington County would appear and defend the County’s action on the HOT lanes lawsuit.

The Washington Post quoted Del. Hugo yesterday as saying, "If they have so much money to spend on frivolous, intimidating, abusive lawsuits on private individuals," then the tax is not needed. The Post indicates further that Del. Hugo filed three budget amendments prohibiting state funding for the Columbia Pike Streetcar produce, reducing Arlington transportation funding, and requiring an audit of Arlington’s road maintenance funding.

The Chamber and others have tried to get Arlington to drop this suit. I have previously been strongly critical of the Arlington lawsuit, especially the civil rights claim stating they should have avoided the suit “instead of further killing Arlington’s credibility in Richmond.” That appears to be exactly what has happened but the County does not seem to appreciate this prescience. This lawsuit, particularly the civil rights claims, needs to end. Still, picking this bill as the target for Richmond’s ire seems like misplaced aggression.

Reprinted with permission from the Washington Business Journal

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According to a good source, GSA and WMATA are working on a new policy to allow GSA to modify its rent caps for sites that meet certain transit oriented development criteria (i.e. sites within a certain proximity to Metro stations, etc.).  As many of our readers know, GSA caps its rents as a result of negotiations with OMB per rules created to implement the Budget Enforcement Act of 1990. OMB (through Circular A-11) created a set of rules which are used to determine whether a federal lease is an "Operating" or "Capital" Lease. To make a long story short, GSA and OMB have agreed to rent caps to make it easy to stay within "Operating Lease" guidelines. The current Operating Lease rent caps are $34/SF in Maryland, $38/SF in Virginia, and $49/SF in the District of Columbia.  With vacancies finally falling and rental rates starting to rise, the natural effect of these caps will be to push federal office space development away from mass transit locations, which yield the highest rental rates.  Currently, big chunks of space for federal agencies just aren't normally available below these price caps where there are mass transit services available.

This clearly goes against the current policies for transit oriented development being advocated by the current administration, the EPA, HUD, pretty much all of our regional localities, and our state level transportation agencies.  So enter the solution: GSA and WMATA are working together to achieve modify current guidelines to be in line with modern transit oriented development goals to allow GSA the flexibility to adjust rent caps upwards to allow large government employers to locate in areas where there is mas transit systems available to handle the commuter volumes they will create.  Apparently, GSA and WMATA are about five months away from realizing this new policy.  This has the possibility of having sweeping impacts to how and which localities and private interests can capture federal tenants/departments/agencies and the resultant collateral economic development benefits these opportunities provide.  How these new transit oriented development guidelines/policies will define which sites are eligible for upward flexibility for rent caps remains to be seen, but we'll keep on top of it and keep you posted.

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This is the second posting in my station by station land use analysis of Northern Virginia's new Silver Line.  The first station (at the Silver Line's eastern terminus) is the East Falls Church Metro Station, which will serve as the transfer station from the Silver Line to the Orange Line.

The East Falls Church Plan is currently undergoing its public review process, and is a collaborative effort between the City of Falls Church, Arlington County, VDOT, WMATA and the community.  It has been in the works for several years at this point and has been a hard plan for everybody to get behind, not because everyone doesn't want to prepare for the inevitable fact that the East Falls Church Metro Station will need to be able to handle the increased number of commuters funneled into the Orange Line from as far out as Loudoun County, but instead because they can't start from scratch, and are trying to provide a solution to a difficult set of existing circumstances.

The first thing you'll notice about the plan is that the station area is located in a predominantly single family home neighborhood.  The second thing you'll notice about the plan is that the East Falls Church station area is cut up by a number of multiple lane highways and major arterial roads (click here for a full size vicinity map of the plan), including I-66, Lee Highway, Washington Boulevard and Sycamore Street, and their associated merging/ramp systems.  This creates a number of complicated problems from the start - a single family community obviously does not want to have a ton of density dropped into the middle of its neighborhood, and because the neighborhood is already fractured by these major roadways, it makes it very difficult to connect density to the Metro Station.  Separating density from mass transit clearly goes against what many consider one of the basic tenants of modern urban planning. 

As you can see from the plan, the planned upgraded metro and transit station is not really centrally located within the plan.  Instead, density is planned along Lee Highway on both sides of the I-66 overpass.  The result has been a bit of an identity crisis about whether this is the Lee Highway "gateway plan" or whether this is in fact a new plan for the East Falls Church Metro Station, and no real defined sense of "place" when it comes to East Falls Church.

Setting all of those issues aside, the plan itself is pretty limited in scope, with only a little over a dozen sites planned for redevelopment (the redevelopment sites are shown here).  The plan keeps most of the planned redevelopment sites to 5 to 6 stories, with a few sites on the Falls Church side of the line having the potential to creep up to 8 stories (click here for the Building Heights Plan).  The plan is for a mix of uses, though given the location I imagine (here's the use plan) the market will demand more residential uses than commercial, and, except for the new planned transit station, there is not a lot of retail planned.

The plan for the upgraded station itself is really the highlight of the plan.  The station (projected to be a 450,000 SF facility) is planned around a 30,000 to 38,000 SF public plaza that will be framed by retail to serve the surrounding neighborhoods, and will provide an additional 75 to 100 spaces of retail parking.  Here's an elevation of what it might look like.  A massing study was also prepared which helps give it some context, and can be viewed here. 

Next stop: Tysons East.

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It is no secret that the Commonwealth of Virginia is the first choice for business in the Washington-Metro Region (being exceedingly more pro-business than the District of Columbia and Maryland), and for the past several decades, Arlington County and the City of Alexandria, with a few exceptions, have had a virtual monopoly over the Metro in Northern Virginia, access to quite a bit of DOD and other federal bucks (in part because of the access this mass transit provided to federal agencies for businesses and federal employees, etc.)  But let’s be blunt; while good urban planning has played a serious role in the urban expansion across the river from DC in Virginia, good urban planning is basically a symptom of great location, location, location.  Arlington and Alexandria have had the benefit of being immediately adjacent to the federal trough in the most business-friendly state in the region with a monopoly over mass rail transit.  These are the core reasons that they have enjoyed their prosperity and growth.  

Recently, however, quite a lot of changes have occurred in Northern Virginia, which cumulatively will eventually have sweeping impacts on inter-locality competition for businesses and economic development, a lot of which we still haven't really begun to feel the effects of.  Often, many of these changes are dealt with as solitary issues by journalists, self-pronounced experts, the person talking the loudest, etc. and I often wonder whether they can see the forest for the trees. 

Our current sequence of evolutions has been underway for years, the seeds being planted even before Eisenhower picked Burke Lake Park for the location of Dulles Airport and the construction of the Beltway began. Then I-66 was constructed, then the toll road and the Greenway. Now, finally, the Silver Line is being constructed, allowing metro to extend as far out as Dulles, which will effectively make the East Falls Church Metro Station the transfer station to the Orange Line, much like Rosslyn serves as a transfer station today. 

Not only are our western counties now well situated to be connected to the DC federal market more competitively, many of those federal agencies and related businesses, which have subsidized the Arlington and Alexandria economies and helped them weather recessions and unemployment disproportionately well for so long, are relocating to western and southern localities due to the Base Realignment and Closure Commission’s recommendations, taking jobs and federal money with them.

The Tyson’s Corner Plan is also the first really modern, mega-urban plan to be located just a few short metro stops from Arlington County and the District of Columbia on the Silver Line, which, once realized, will offer over 1,200 acres worth of the benefits that good urban planning can provide to businesses and residents, literally on Arlington and Alexandria’s doorstep.  In Virginia, Arlington and Alexandria have never had to deal with this kind of competition and I’m not sure they are prepared for this eventual reality, however distant it may seem.  If there is any doubt, just look at the impacts Arlington and Alexandria have had on the DC market.  They've been able to offer an alternative for businesses not to have to be located in the District of Columbia in business-friendly Virginia, with metro and federal access, for less money, etc.  How are the western counties not going to eventually be in the same position in relation to Arlington and Alexandria?

Collectively, this really is all a lot of large-scale change underway for Northern Virginia.  So what will the cumulative impacts be, when will we start feeling them and what will all this mean for real estate interests in Northern Virginia?  Well, one thing is certain - the cat is out of the box.  I guess all that we can know is that the market will change, and, provided the regional economy continues to grow, it is clear that the western counties have no way to go but up.  It seems to me, though, that Arlington and Alexandria will likely also benefit from being in a central location between all this new density and the District of Columbia, although it will get more competitive to retain and attract new private business interests and federal agencies once things in the western counties start to come into focus, as the western counties find themselves in a better position to aggressively pursue those opportunities which used to be disproportionately available solely to Arlington and Alexandria. 

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Cherry, Bekaert & Holland has released a completed audit of the Virginia Department of Transportation that detailed almost $1 billion of unspent money. "McDonnell's Millions" will run this holiday season as Gov. Bob McDonnell announced that VDOT would award $800 million to $900 million in maintenance and construction contracts by Dec. 31.

Not surprisingly, my good friend at ENR, Bruce Buckley pointed to poor management of available resources. The Washington Post opined that the found money was nice, but that accurately, "this money is a drop in the bucket and will hardly make a dent in Virginia's long-term transportation needs."

We have already written about Virginia's regional delays in spending stimulus transportation funding, and also in more detail at the here. Having a sense of urgency to create jobs seems self evident. The VDOT audit points to federal data that for each $100 million spent on highway construction and maintenance projects, 3,000 jobs are created or supported, $250 million in economic activity is generated and $7.2 million in state revenues is created.

I had an initial impulse to condemn VDOT. On reflection, I think the Northern Virginia Transportation Alliance has it right in its quote of the audits "final thoughts" in a recent NVTA e-mail blast:

In order to put the challenges facing the (Virginia) Department (of Transportation) over the last couple years in perspective, both external and internal events need to be considered. First, the Department had to deal with (an) unprecedented drop in revenues, requiring a number of mid-term adjustments that cut billions out of the six-year capital budget, and a painful downsizing and reorganization. Second, in the middle of the downsizing effort, the Department received $650 million in new federal funding with a short turnaround time (to invest). Finally, there have been seven changes in leadership at the Commissioner level over the past 12 years, each with its own set of strategic priorities.

Maybe asking VDOT to dump tons of people and revenues only to follow that demand by insisting they spend piles of money instantly was just a little too much. Still, $900 million unspent dollars amounts to 27,000 very badly needed construction sector jobs, so let's get it done!

This article is copyrighted 2010 by the Washington Business Journal, used by permission and originally posted here.

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As many of our readers know, the new Crystal City Sector Plan was considered last night (see here for our prior analysis of the proposed plan), but did you know it contained a proposal for a Tax Increment Financing ("TIF") fund  to include the Crystal City, Potomac Yard and Pentagon City areas at the same time?

So what is a TIF fund?  It is actually a very common and pretty straightforward tool used by localities nation-wide to finance area-specific public improvements, however, this tool often makes many people nervous because it essentially is based upon using future, anticipated tax revenue increases to finance current improvements.  Said another way, the County has projected a certain "incremental" increase in property values, and will use this projected incremental increase to finance debt issued to pay for specified projects.  The County has projected these incremental tax revenue increases based upon planned new densities and several projected build-out timeline possibilities.

The Crystal City Sector Plan anticipates about $207,000,000 in costs for public infrastructure improvements in streets, mass transit and public spaces over the next 20 years (such as the proposed new streetcar system, etc.).  According to County staff, the recently adopted FY 2011 - 2016 Capital Improvement Program already relies on the TIF as a funding source for these three geographic areas.  TIF fund programs have been critical components to many regional revitalization efforts, including Arlington's Columbia Pike Revitalization Initiative.  The County believes, over the next six years, this tool will provide approximately $27,000,000 of funding for dedicated TIF capital improvements.

Here's a link to the County Manager's report on the Crystal City, Potomac Yard, and Pentagon City TIF fund proposal.

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The Virginia Supreme Court has released its opinion in the first of the pending Case Watch. Commonwealth of Virginia v. AMEC Civil, LLC, and the companion case of AMEC Civil, LLC v. Commonwealth of Virginia had twenty-two assignments of error on AMEC’s part, along with two assignments of error and seven assignments of cross-error on VDOT’s part.

At issue was a $72.5 million contract to construct the Route 58 Bypass in Mecklenburg County, and AMEC’s demand for over $21 million. The trial court – which issued two letter opinions – awarded AMEC its full $21 million. The Court of Appeals – which issued its own published opinion – and the Supreme Court were not as kind to AMEC.

The Virginia Supreme Court did an excellent job narrowing down the case to five main issues:

1. Did AMEC gave timely notice of its claims to VDOT?
2. Were unanticipated sustained high water levels a “differing site condition”?
3. Was AMEC entitled to home office overhead damages?
4. Should AMEC have been able to use the Rental Rate Blue Book to establish damages related to equipment costs?
5. Was AMEC entitled to prejudgment interest?

Notice was the primary focus of the case, requiring an in-depth look at Virginia Code Sections 33.1-386, which says that a

… claim shall set forth the facts upon which the claim is based, provided that written notice of the contractor’s intent to file such claim shall have been given to [VDOT] at the time of the occurrence or beginning of the work upon which the claim and subsequent action is based.”

Section 33.1-387 makes this claims process a condition precedent to filing suit against VDOT.

The trial court, which awarded the full judgment of $21 million to AMEC, found notice of AMEC’s claims to VDOT in various meeting minutes, emails and other documents. The trial court reasoned that these “writings” gave VDOT actual notice of the claim and VDOT suffered no prejudice with that notification. The Supreme Court wasn’t buying it, and directly held that actual notice is insufficient to satisfy Section 33.1-386. As to form, the Supreme Court held that:

At a minimum, to satisfy the written notice requirement, the written document at issue must clearly give notice of the contractor’s intent to file its claim and must be “given to [VDOT]” by letter or equivalent communication directed to VDOT at the appropriate time. As to timing, the Court looked to Section 33.1-386 (A) to say that notice has to be given either: (1) “at the time of the occurrence” of the claim; or (2) at the “beginning of the work upon which the claim…is based.”  The Court split the baby on these claims, finding at times AMEC gave sufficient notice, and at times not.

As to the second issue of “differing site conditions,” AMEC argued that the water level of Kerr Lake fluctuated so far outside of the U.S. Army Corps estimations that its sustained elevated water levels constituted a “differing site condition” that delayed the project to the point that AMEC was entitled to delay damages. VDOT granted two work orders extending the project, but refused to give AMEC delay damages.

The contract between AMEC and VDOT contained a specification called “differing site conditions” that would entitle AMEC to delay damages for: (1) subsurface or latent physical conditions differing materially from the contract; or (2) unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the contract.

The Supreme Court found that, as neither subsurface nor latent, the elevated levels could not be a Type 1 differing site condition. But they were a Type 2 differing site condition. The contract adopted the U.S. Army Corps estimates, and the the lake levels remained above those estimates for a length of time that even VDOT’s witnesses agreed was “unusual.” VDOT benefited from accurate bidding by allowing the contract to adopt the U.S. Army Corps’ estimates, and therefore bore the risk on this issue.

Regarding home office overhead damages, the Supreme Court noted that, for a contractor to prove it suffered unabsorbed overhead damages, the contractor need not show its overhead increased due to delay, but only that it could not otherwise reasonably recoup its pro rata home office expenses incurred while its workforce was idled by the delay. AMEC’s expert merely calculated a per diem rate multiplied by the number of days of delay. The Supreme Court rejected this model, finding that AMEC failed to prove it was entitled to overhead expenses because no fact or expert witness presented evidence that AMEC could not have recouped its home office overhead from some other revenue-producing work.

As to equipment costs, AMEC used the “Rental Rate Blue Book,” just as Specification 109.05 (d) in the contract allowed it to do. The parties agreed that “actual costs” were the proper measure of damages, but disagreed as to whether AMEC could just rely on the Blue Book, without making adjustments such as for the equipment’s age. AMEC also presented expert testimony – unchallenged by VDOT – that the Blue Book represented the industry standard to determine equipment costs. That was enough to satisfy the Supreme Court.

For the last issue, the Court had no problem affirming both the trial court and the Court of Appeals, which refused to grant prejudgment interest to AMEC. The only way AMEC could prevail on this issue was to show statutory or contractual waiver of VDOT’s sovereign immunity, which it failed to do.
 

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As promised, just wanted to circle back with the results of yesterday's Commonwealth Transportation Board hearing.  It is official, the Commonwealth Transportation Board passed the actions necessary to transfer Columbia Pike to Arlington County, with assurances from Arlington County staff that they would preserve the functionality of Columbia Pike and that there were plans to do so in place.  This action is a major step for the Columbia Pike Revitalization Initiative, giving Arlington County the control it has wanted over streetscape, pedestrian, transportation, street and intersection alignment, and its street car planning.

All this comes despite the ongoing lawsuit between Arlington County, VDOT and others.

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The Commonwealth Transportation Board is scheduled to finalize the deal and take the necessary actions to convey Columbia Pike to Arlington County tomorrow, being the culmination of many years of urban and transportation planning by Arlington County, the Columbia Pike community, and the Columbia Pike Revitalization Organization.  This is in response to the Resolution passed by the Arlington County Board back in July of 2009 to acquire Columbia Pike from the Commonwealth in order to clear the way for construction of the planned street car system along Columbia Pike in Arlington County and to help realize the goals and visions of the Columbia Pike Revitalization Initiative. 

Arlington is one of only two Counties in Virginia that owns and operates its own local street system, with the Commonwealth operating the rest of the roadways in all other localities.  Once the transfer is complete it will be up to Arlington to maintain and operate Columbia Pike on its own.  Mike Estes' recommendation to the CTB is for the CTB to authorize the Commissioner to execute the transfer agreement with Arlington County this month, have the CTB transfer Columbia Pike from the Primary Road System to the Local Road System, and then in October to have the CTB approve the 2011 fiscal maintenance payment to Arlington County include Columbia Pike.  It is my understanding that the Commonwealth Transportation Board is moving forward with the transfer of Columbia Pike despite Arlington County's ongoing lawsuit against VDOT and the Commissioner of Transportation over the environmental and civil rights claims surrounding the "Hotlanes Lawsuit" (click here for my posting on this lawsuit from last year, which was updated and opined on by one of our co-bloggers last week here)

The hearing will occur down in Richmond at the VDOT Central Auditorium at 10:00, but if you cannot attend or observe here are copies of Michael Estes' presentation and the hearing agenda.  Also, here is the proposed Resolution for action by the CBT, and here is the actual proposed Memorandum of Agreement if you are interested in some of the finer the details.  We'll keep you posted on the results of the hearing, though I imagine the press releases will be flying around pretty quickly tomorrow. 

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For those of you out there who are following whether commercial real estate can be taxed at a different rate than residential property, FFW Enterprises v. Fairfax County, et al. has been slated for the Supreme Court's September arguments docket.  Like most other states, in the Commonwealth of Virginia the Constitution contains a "Uniformity Clause" which was intended to prevent the General Assembly from allowing the taxation of different classifications of real property in an inequitable manner.  Specifically, Article X, Section 1 of the Constitution of Virginia provides:

"...All taxes shall be levied and collected under general laws and shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, except that the General Assembly may provide for differences in the rate of taxation to be imposed upon real estate by a city or town within all or parts of areas added to its territorial limits..."

The core of the dispute is whether Fairfax County may tax only commercial property owners, such as FFW Enterprises, without taxing residential property owners, to fund transportation projects.  The General Assembly, through Section 58.1-3221.3 of the Code of Virginia, granted authority to Northern Virginia localities to levy special taxes for  transportation projects, and in combination with this authority, Fairfax County created a special tax to fund portions of the Silver Line metro project using Section 33.1-431 of the Code of Virginia.   In a nutshell, Fairfax County taxed commercial property owners a special transportation surcharge and exempted residential property owners from having to do so to fund metro improvements.

Last summer, the Circuit Court of Fairfax County (see here for opinion) held that the Uniformity Clause does not prohibit localities from "...provid[ing] for differences in the rate of taxation to be imposed upon real estate..." so long as these differences are not imposed upon the "same class of subjects."  However, in 1947 pursuant to City of Hampton v. Ins. Co. of North America, the Supreme Court has already held that the test to determine the constitutionality of such a tax is:

"[Alre there others, who are benefited as much or more than those smarting under the tax imposition, who go unwhipped of its burden?"

FFW Enterprises plead just that, asserting that residential property owners will benefit as much from the construction of the Silver Line as commercial property owners in Fairfax, however commercial property owners will bear the sole brunt of the costs and taxes.  Nonetheless, the Circuit Court of Fairfax County found FFW Enterprises failed to establish this, and that the 1947 standard is no longer relevant or applicable.  These questions will now be put to the Supreme Court in just a few weeks - we'll keep you posted.

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Arlington County has moved to sue yet another individual transportation official in its pending HOT lanes project in federal court in the District of Columbia.  The pending case, a fight over the HOT/HOV lanes in I-395, argues that VDOT and the US Department of Transportation failed to undertake appropriate traffic, environmental, and other studies in approving the northern section of the project.

In its inital papers, Arlington elected to not only sue the various governmental agencies, but also the highly regarded Pierce Homer, then Secretary of Transportation for the Commonwealth of Virginia, individually.  The primary thrust of the case relates to an alleged failure to consider environmental, traffic and other impacts of the project during the review process.  Arlington County sued Secretary Homer individually for engaging in civil rights violations by allegedly favoring suburban white people over less affluent minority residents of Arlington County.  The Complaint alleges, in a remarkably long, rambling, ninety plus pages, things like:

The use of public funding, to serve the interests of wealthy, predominantly white Virginia residents from the southernmost counties affected by the Project and at the obvious expense of the largely less affluent, predominantly minority and ethnic populations that reside in and along the corridor of the Northern Section, in particular in Arlington County.

Arlington has been widely and universally criticized by the business community, amongst others, for this approach.  The Northern Virginia Transportation Alliance, with virtually every significant regional business organization signing off, wrote Arlington County Board Chair Jay Fissette on May 28, 2010 and called out the County's lawsuit as an impediment to regional transportation efforts.  In particular, the letter stated the the civil rights allegations "are not credible and frankly an embarrassment to this region."

How did the County respond?  On June 22, Jay Fissette sent a reply letter to NVTC.  The silence was deafening in that the letter did not even respond regarding the civil rights elements of the lawsuit.  We now see that rather than focusing on the traffic and environmental issues in the case, the County has elected to double down on its strategy of filing suits against individual transportation officials.  The County now seeks to add Edward Sundra, a Senior Environmental Specialist for the Federal Highway Safety Administration, as an individual defendant.  The County again argues in its Motion to Amend and Amended Complaint for individual liability based on Mr. Sundra's alleged individual acts of civil rights violations.

In a time of deep fiscal challenges for state and local governments, Arlington has reportedly spent over $1,000,000 already on this lawsuit.  It is rare that I editorialize and opine rather than report, but it seems to me that money should have been used for a variety of other causes, like keeping the planetarium open, instead of further killing Arlington's credibility in Richmond.  This case, and in particular the allegations against the individual defendants, are easy fodder for the rest of the state to throw up their hands, scoff at Arlington, and say, "See, I told you so."  Continued delays in litigation threaten the Commonwealth's ability to tap into various federal funding sources and we desparately need investment into every potential transportation avenue, including roads, in the region.

For lessons learned on litigation strategy, this case brings to mind a couple of strategic litigation truisms which are worth sharing.  I will leave it for others to judge whether these can or should be applied to this case.

1. Focus on your strongest arguments, do not permit distraction
2. Never weaken a strong argument with a weak argument
3. Always keep your credibility in mind ... it is the hardest coin the gain and the easiest to spend
4. Never forget the big picture or the finder of fact, and
5. Brevity is the soul of wit, especially in drafting pleadings

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We are very enthused to announce that I have been asked to regularly post as a guest blogger with the Washington Business Journal.  WBJ is one of our very favorite sources of information, news and commentary regarding business, law and real estate.  The guest blog spots will be weekly and part of their Biz Beat page alongside posts by WBJ reporters.  Our initial post is an expansion of our previous discussions regarding how little stimulus funding for transportation has actually been spent.

We have a very high regard for WBJ and follow numerous WBJ reporters on twitter and publisher Alex Orfinger.  We regard being invited to serve in this capacity by the go-to information source as quite an honor.  For those not familiar or not as focused on the WBJ's offerings, we strongly recommend not only their print subscription, but signing up for their daily e-mail news alerts which contain critical updates for the business community.  We will keep everyone posted on further developments on this front here and invite you to check out the Biz Beat blog!

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The Arlington County Board will be deciding whether to approve a series of amendments to Arlington's Comprehensive Plan relating to Crystal City at their hearing at the end of September, after several years of evaluation on how best to react to the loss of approximately 17,000 jobs and over 4 million square feet of occupied office space due to the recommendations of the Base Realignment and Closure Commission (BRAC).  Specifically, the County Board will decide whether to adopt the new Crystal City Sector Plan 2050, and modify the General Land Use Plan and the Master Transportation Plan.

With Long Bridge Park and the Pentagon to the north, the airport and the river to the east, Aurora Highlands and Pentagon City to the west and Alexandria/Potomac Yards to the South, existing metro and VRE access, Crystal City seems well poised to make a comeback.  Here is an exhibit showing Crystal City's existing conditions.  The plan specifically outlines which sites are expected to be redeveloped, which sites have potential for redevelopment, and which sites are expected to remain for the life of the plan (click here for the comparison). Much like the Tyson's Corner Plan, Crystal City's 260 acres are broken up into proposed "districts" (shown here), including the Northwest Gateway, Northeast Gateway, Central Business, Entertainment, South End and West Side Districts, each with their own respective district-level focus.

The areas planned for the highest densities are basically limited to certain principle areas, including the sites in proximity to the planned multimodal transit hub facility and also those sites a the center of the Entertainment District.  The "Base Densities" referenced in the plans show what the existing GLUP designations contemplate for density, and are shown on the Base Density Map.  The plan models a 61% increase in density for Crystal City over the life of the plan, but rather than calling out specific densities caps for specific sites, density under the Crystal City Sector Plan will be controlled by bulk restrictions, shown on plans for height, setbacks, bulk angles, tower coverage, massing, etc.  Land use is set forth on the plan's new Land Use Map, and required on-street retail space is shown on the Retail Frontage Map.

Of particular interest in the plan is the "...addition of a dedicated surface transit-way to Crystal City's existing [transit] system...," that will include a streetcar or trolley system.  The recommended alignment for this system is shown here, as well as a new eastern entrance to the Crystal City Metro Station.  A multi-modal transfer hub facility (shown here) is planned to connect metro, VRE, bus and trolley systems at the location of the existing entrance to the Crystal City Metro Station.

One of the most unique things about Crystal City has always been the Crystal City Underground which connects a lot of Crystal City for pedestrians via a network of tunnels, underground and interior  spaces.   While the plan guides how retail, pedestrian systems and planned open space will make use of these existing features, most of the Underground is contemplated as remaining in place.

The Crystal City Sector is also going to be one of the proving grounds for Arlington's currently developing Community Energy Plan, with carbon reduction and sustainability as some of the major plan objectives, as well as incorporating the proposed streetcar/trolley system's energy needs in Crystal City's district energy plans.

All said, it is a fairly extensive and unique plan, and I don't think a simple blog posting can do it justice.  For those of you that want all the details, here's a link to the entire proposed plan and the staff report for the September hearing.

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I know most people out there who follow land use in the DC metro area are pretty familiar with the Columbia Pike Revitalization Plan and the Columbia Pike Form Based Code.  Then, like many others, you've probably wondered what will happen to the trolley system once Columbia Pike hits the Arlington County line?  Well, instead of continuing to head west down the corridor, it abruptly bangs a left at the county line, and heads south up the hill to Skyline (here is a transit plan showing approximate station locations and here is an aerial transit plan overlay).

Actually, this is in conformance with the transit plans that have been in place for several years now, so it is no great shock to see this concept on the "Preferred Plan" which is the latest culmination of two prior land use plans presented to the community last month and updated and posted yesterday on Fairfax County's website.  Not surprisingly, the highest densities are planned along the proposed street car system, which culminates at the existing high density sites at Skyline.  As you can see on the Preferred Plan, however, the system only tracks the eastern periphery of this first portion of the Community Business Center plan area (the "CPC"), leaving much of the planned area geographically disconnected from the trolley system, and in particular the Columbia Pike corridor.

So rather than seeing higher densities planned along the Columbia Pike Corridor as might be the intuitive preconception, right now the idea is to concentrate higher densities in Land Unit C between Leesburg Pike and South Jefferson Street, with street car stations straddling both the north and south sides of Leesburg Pike on Jefferson Street.  Adjacent to the conceptual transit center and and station north of Leesburg Pike is where the highest density mixed use sites and the high density retail nodes are proposed to be located under this portion of the CPC.

While this is a revitalization plan for the Baileys Crossroads area rather than an extension of the Columbia Pike Revitalization Plan into Fairfax, it does seem, at least initially, counter-intuitive to connect the old Skyline density to the planned Columbia Pike transit corridor.  But life is not perfect, and Fairfax has to deal with the existing, built densities at Skyline, and probably needs to take advantage of the new transit system now  to alleviate some of the immediate conditions at Skyline.  I just wonder if it would not be more wise to take a longer view and realign the density and transit capability up Columbia Pike rather than focus on connecting the aging density at Skyline.  I also have to admit though, it is pretty exciting to think of Pentagon City and Skyline being connected by a street car system.

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This week we have announcement of two significant bond offerings to cover transportation funding.  According to ENR, Governor Bob McDonnell announced last Friday that Virginia will sell $500 million in bonds for transportation projects in the Commonwealth.  This will be the first in a wave of bond offerings contemplated by Virginia which will total $2.2 billion over the next six years.  Count me as an observer that says the state bonds are nice, but Virginia will not solve its transportation problems absent a steady, consistent and meaningful source of transportation funding at the General Assembly.

In separate news, the Washington Examiner reports today that the Metropolitan Washington Airport Authority announced plans for a $650 million bond sale this month.  This bond issuance is calibrated to take advantage of stimulus funding support towards interest expenses.  The MWAA bond issuance is planned to help defray costs for the Metro rail extension to Dulles Airport and will be paid down by proceeds from the Dulles Toll Road.

The Washington Examiner report notes that the MWAA bonds issued last year for Dulles Rail received a A rating from Standard and Poor's and an A2 rating from Moody's.  In contrast, this latest issuance received a Baa1 and Baa2 rating from Moody's.  Moody's cited risks associated with slow toll revenue growth, construction cost overruns, and the potential loss of the stimulus bond subsidy.

Image from VDOT/VA Mega Projects

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The Washington Post reported on Sunday that the Obama administration will propose taking over safety regulation of subways and light rail, including the regional Metro system.  Metro has been taking a regular beating in the press recently for safety concerns and its anemic response to those concerns.  Metro has apparently gone so far to frustrate efforts to investigate its safety procedures and efforts that it has barred independent monitors from walking along its subway tracks, even escorted by Metro employees, to observe its procedures in practice. 

The frightening revelation is that the safety oversight is apparently imposted by a relatively powerless, "Tri-State Oversight Committee", "which has no employees, office or phone number.  It also has no direct regulatory authority over Metro."   Locally, concerns regarding Metro's safety have mushroomed following a June 22, 2009 crash that left nine people dead and injured 80.  Since then, the Washington Post has reported an another "dangerously close" near miss, an August 9 fatality when track repairman Michael Nash was struck and killed, and another fatality when a Metro technician John Moore was killed in a separate incident in September.

I believe that density based development around the Metro corridors is critical to long-term regional success, reduction of carbon footprint, reduction of use of non-renewable fossil fuels, and reversing or at least slowing down the traffic impacts of decades of sprawl.  A trusted, safe and reliable Metro system is a prerequisite to this entire style of development working.  In particular, the rail extension to Dulles Airport and the interconnected plans to redevelop Tyson's Corner into a more intelligently designed, denser urban center with improved walkability are crucial to the successful continued vitality of the entire region.  Leaving the success of these important ventures in the hands of a powerless committee with no direct regulatory authority is simply not acceptable.

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For those of you that don’t already know, Arlington County has filed a complaint against the U.S. Department of Transportation, the Secretary of the United States Department of Transportation, the Federal Highway Administration, the Federal Highway Administrator, the Virginia Department of Transportation, and the Secretary of the Virginia Department of Transportation. Apparently, the purpose of this complaint is to stall and possibly derail the HOV/HOT highway project in Northern Virginia which would add additional travel lanes along the I-95/I-395 corridor from Spotsylvania to the Pentagon. For decades, Arlington County has been tirelessly waging a war against suburban sprawl and the impacts of funneling more and more automobile traffic from outlying suburban counties through Arlington County.

 Among many other things, the complaint alleges that Federal Highway Administrator, the Secretary of VDOT, and the Secretary of the US DOT, personally and deliberately, unjustifiably defined the project so narrowly that it would be excluded from the comprehensive review and public scrutiny requirements of NEPA and the Clean Air Act. The complaint alleges that there is no defensible way that the Northern Section of the project could obtain a “Categorical Exclusion” allowing it to bypass the Environmental Impact Statement or Environmental Assessment processes which would require an in depth review and analysis of the environmental impact of the project.

The complaint also alleges that the defendants failed to adequately analyze the impact on Arlington’s communities that the significant increase in traffic volumes the project would generate. Arlington is particularly concerned about what Arlington considers some of its traditional and historic neighborhoods that are in proximity to the project.

Unexpectedly, however, the complaint also alleges that Secretary LaHood, Secretary Homer and Administrator Mendez deliberately, in their individual capacities, promoted this project to “…enable a financially-able, privileged class of suburban and rural, primarily Caucasian residents…” to the “…disparate impact of the Project on minority and low-income communities…” in Arlington. Ouch. Sounds like the gloves are off.

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A Fairfax County judge has ruled that a commercial real estate tax used to help fund the rail extension to Dulles Airport is constitutional. According to the Washington Business Journal, Fairfax Circuit Court Judge Stanley Klein approved of the structure in the context of a bond validation suit initiated by Fairfax County and related entities. Fairfax created the Dulles Corridor Phase I Special Improvement Tax District as a funding mechanism to repay bonds issued to fund Fairfax County's contribution to the rail extension project.

Virginia has seen significant challenges to its attempts to create stable funding mechanisms for transportation over the last several years. The most notable challenge was a successful appeal to the Supreme Court of Virginia to significant portions of the overall transportation funding legislation adopted by Virginia's General Assembly in 2007. In the case of Marshall v. Northern Virginia Transportation Authority, the Supreme Court of Virginia held that the General Assembly violated Virginia's Constitution by attempting to delegate its taxation powers to unelected multi-district transportation authorities in Northern Virginia and Hampton Roads.
 

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