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Stafford supervisors may boost tax incentive for Aquia Town Center project

Stafford supervisors may boost tax incentive for Aquia Town Center project

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Towne Center at Aquia

Work continues on the Towne Center at Aquia on Thursday, June 15, 2016.

A developer is requesting additional tax incentives to proceed with the plan to bring a Harris Teeter grocery store to Aquia Town Center in Stafford County.

The Stafford Board of Supervisors is scheduled to discuss the proposal at its meeting Tuesday.

Back in September 2015, the board attempted to jump-start the long-stalled redevelopment of the property by entering into a tax increment financing, or TIF, agreement with Mosaic Aquia Capital LLC.

With the creation of the TIF, a portion of the tax revenue generated by the project goes back to the developer as an incentive for redevelopment.

Under the initial agreement, the county agreed to return 75 percent of increased tax revenue, up to $6.25 million, back to the developer over a 15-year period.

However, due to a financial complication with the anchor store—Harris Teeter—Mosaic has asked the board to increase the incentive to 80 percent of increased tax revenue, up to $18.25 million, for up to 30 years.

According to a county staff report, the county would still bring in millions in new tax revenue even with the increased incentive package. It notes that an outside financial consultant estimated that the total tax revenue of the development if built as planned “could be more than $71 million over the next 30 years.”

Board of Supervisors Chairman Paul Milde said the new agreement is a no-lose proposition that will revive an area that has been in economic decline for well over a decade.

“Without this deal, we have nothing,” Milde said. “But with this deal, we see a redevelopment of the worst spot in North Stafford. This will be a catalyst creating new tax revenues above and beyond what are paid back against the TIF.”

Aquia Town Center was built in the mid-1990s on U.S. 1 near Garrisonville Road, but hit hard times in the 2000s as stores began leaving for other developments. The full build-out of the center includes shops, restaurants and office space, in addition to the supermarket.

The plan aligns with the county’s vision for the “work-live-play” development it wants on the property. But not everyone is on board with the new agreement.

Supervisor Wendy Maurer said a majority of board members appear to support the deal, but she hopes they will consider several issues at Tuesday’s meeting, including how the agreement will impact future negotiations with developers and the significant size of the incentive.

According to the net present value calculation in a county staff report, “the actual payback with current projections will be $30.7 million.”

“I am disappointed that staff would not release that we are committing not just $18.25 million but $30 to $40 million in actual payout over next 30 years,” Maurer said. “That is a significant amount of money. They are not presenting the whole story.”

Maurer also said that directing meals tax revenue—which is designated for schools in the budget—to the developer is “stealing from schools.” The TIF agreement includes real-estate taxes and meals and sales taxes.

Supervisor Meg Bohmke hopes the board will also consider the role of government in economic redevelopment, and whether providing additional incentives to a developer who runs into trouble on a project is the right course of action.

“I feel like this deal is too rich, and that it is not the government’s role to get involved in tax incentives like this in the Aquia District,” Bohmke said. “Why are we giving up that tax revenue for one grocery store?”

Amanda Vicinanzo: 540/735-1975

avicinanzo@freelancestar.com

@Avicinanzo

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