The Land Lawyers Blog

City of Fairfax Approves Multi-Family Redevelopment

Posted on by Admin

Layton Hall Image

In recent years, the City of Fairfax has been reluctant to support multi-family development; however, in a significant decision on May 14, 2013, the City of Fairfax approved redevelopment of 110 existing and outdated garden-style units in the Layton Hall Apartment complex with a 360 unit, multi-family development. The approved development is comprised of high quality, 4 and 5 story residential buildings, structured parking and an urban walkable environment with high-quality streetscape elements, including landscaping, a brick sidewalk, and improved trail along University Drive, pedestrian crosswalks, and pedestrian refuge islands. By creating these pedestrian features, the redevelopment will create walking opportunities for all pedestrians, not just for those residing in the development. The result is that the redevelopment of Layton Hall will create a renewed synergy with downtown Fairfax City, which will enhance the vitality of the downtown area.

In addition to a pedestrian-friendly environment, Transportation Demand Management strategies will be implemented with the redevelopment, including the addition of on-site bike storage, the establishment of bike lanes on adjacent public roads, the distribution of Smart Trip Cards to new residents, and an electric vehicle charging station for use by the residents. These varied techniques will promote a reduction in the number of vehicle trips to and from the property.

The proposed architectural style is traditional, in keeping with the character of the City of Fairfax. The proposed buildings will be primarily constructed of brick, and incorporate universal design features and sustainable design elements.

A number of site design features influenced the City’s decision including environmental considerations as the building layout removes existing buildings from the floodplain, stormwater management will be installed when none exists, and environmentally beneficial materials are encouraged, such as the use of pervious pavers in the final design.

Given the affordable nature of the existing apartments, the City Council raised concerns about the preservation of affordable housing. The redevelopment includes a robust tenant relocation plan and a set aside of five percent of the total number of units as workforce housing. Subsequently the City Council directed the Planning Commission to evaluate and draft a formal policy and/or ordinance for the provision of affordable and workforce housing in the City.

Design Professionals Can Now Limit their Liability Through Contract

Posted on by Admin

These provisions typically limit a party’s liability to the amount of the contract or some predetermined amount. Historically, such provisions have been generally enforceable in Virginia for everyone except design professionals — that is, engineers, architects, and/or surveyors.

Until recently, provisions limiting the liability of design professionals were often held unenforceable, because Virginia law prohibited firms engaged in the business of professional engineering, architecture, and land surveying from “limit[ing] the liability of any licensee or certificate holder for damages” arising from its actions. However, a recent amendment to the Virginia Code not only eliminated the above-referenced language but added language providing that design professionals shall NOT be prohibited from “limiting liability through contract.” We note that this amendment is not retroactive, however.

While the amendment allows limits on the liability of design professionals, another Virginia Code section prohibits certain indemnification and hold harmless provisions that are designed to completely insulate a party from liability, rather than limit their liability. This rarely used code section invalidates certain contract provisions commonly used by owners or general contractors when they attempt to impose “indemnity or hold harmless” obligations on their architect or engineer. The bottom line is that consulting professionals may be agreeing to contract indemnity provisions that are actually unenforceable.

These laws will provide ammunition for consultants to better protect themselves through their contracts. Design professionals are encouraged to take advantage of these changes and have their standard contracts reviewed and revised. Please feel free to contact Garth Wainman or Matt Westover to discuss any questions you may have regarding these statutes.

Arlington County Zoning Update

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Realize Rosslyn Underway

In December 2012, Arlington County kicked off the review and update of the Rosslyn Sector Plan with a community visioning workshop. A long range vision for Rosslyn was first created in 1977 with the adoption of the Rosslyn Transit Station Area Study. Subsequently, in 1992, the Rosslyn Station Area Plan Addendum put forth a vision of a Arlington’s downtown, urban center. With significant development since 1992 and anticipated development on the horizon, the current process will update the 1992 Addendum and provide solutions to some of the present challenges in Rosslyn. The update process, referred to as “Realize Rosslyn,” will be a highly public process that will engage and encourage participation from a wide group of stakeholders, but also draw on the professional services of several planning and traffic consultants. The community process will focus on four key planning areas:

  • Creating an enhanced urban design framework;
  • Refining, and improving transportation options;
  • Recommending a building heights strategy;
  • Developing a more cohesive, functional parks and open space network.

To continue the discussion, Arlington County has scheduled a two-part community workshop series for March 13, 2013 (7:00 pm at the Artisphere) and March 14, 2013 (6:30 p.m. at the Artisphere). Additional information on the planning efforts can be found by clicking here.

Fairlington and Shirlington

On Monday, March 4th, Arlington’s Planning Commission revised a draft update to the Fairlington-Shirlington Neighborhood Conservation Plan, which was last updated in 1987. The draft Plan addresses citizen concerns and visions for future redevelopment in the Fairlington and Shirlington communities. The draft can be viewed online by clicking here.

Zoning Ordinance Rewrite

Following the County Board’s adoption of the new Sign Ordinance in July 2012, Comprehensive Planning staff forged ahead with the second phase of the County’s effort to update the Zoning Ordinance. Initiated in December 2010, Arlington County is in the process of comprehensively revising and transforming the Zoning Ordinance (most recently comprehensive reviewed in 1950) into a more user-friendly document. The second phase will be completed in two parts: A and B. Part A is currently underway and will include a reorganization and removal of the pyramid structure of the Zoning Ordinance. According to staff, these changes will include:

  • Creating individual use lists for each zoning district, which will remove the references to uses permitted in a previous district.
  • Incorporating graphics and tables to illustrate and summarize important regulations, such as minimum lot size, height and density.
  • Embedding links to make the Zoning Ordinance more web-friendly.

Staff anticipates that the reorganized Zoning Ordinance will be presented to the County Board in May 2013. Upon completion of Part A, Part B will undertake minor policy changes to the Zoning Ordinance. Part B will revise definitions and inconsistencies, incorporate administrative practices and Zoning Administrator determinations and resolve any conflicts presented by the reorganization of Part A. As is typical for Zoning Ordinance changes, the Zoning Committee of the Planning Commission (ZOCO) will provide review and feedback of staff’s proposed changes.

Change of Outdoor Café Regulations

Arlington County is proposing a Zoning Ordinance Amendment regarding outdoor cafes on private property. Given the increased number of outdoor cafes in Arlington, the County is seeking to codify its policies and practices. As proposed by County Staff, the key characteristics of an outdoor cafe are: accessory to primary restaurant use, lacking permanent walls and fixtures, containing fewer seats than the primary restaurant, and being open the same or fewer hours than the primary restaurant. The Zoning Ordinance Committee of the Planning Commission discussed the amendment in February and public hearings on the amendment will likely occur in May.

North Quincy Street Plan Addendum Approved

On February 23, 2013, the Arlington County Board approved the North Quincy Street Plan Addendum after a lengthy staff and community planning process. Over the past three years, 12 Long Range Planning Committee and community meetings were held to review the framework and specific recommendations of the Plan. The Plan Addendum serves to supplement the 1995 North Quincy Street Plan which covers a larger land area.

The approved Addendum focuses on the east and west sides of Glebe Road, between North Carlin Springs Road and Henderson Road. The new Plan assumes larger scale redevelopment to occur on the east side of North Glebe Road and provides for a base density of 1.5 FAR on the east side of the study area with guidance suggesting that additional development may be achieved through application of the County’s bonus density provisions up to a maximum of 4.0 FAR. The Plan anticipates redevelopment on the west side of North Glebe Road at approximately the same level of intensity as currently planned, but allowing flexibility for a potential change to the General Land Use Plan along the Glebe Road frontage and recommends that the tallest building heights be located along North Glebe Road. The Addendum provides for future improvements to the transportation network, both vehicular and pedestrian, in order to break up the two large ‘super–blocks’. A significant open space area is depicted in the center of the west block.

During the motion to approve the Addendum, Board Member, Jay Fisette, stated that the new Plan was a “huge success of the process” and that while the hearing discussed some of the finer points, “the big picture was all very positive”. Board Members Garvey and Hynes concurred with his remarks. Approval of the Plan Addendum was unanimous. For more information, contact Liz Nicholson in WCLEW’s Arlington office at 703-528-4700.

Town of Leesburg Adopts Crescent Design District

Posted on by Admin

The Town of Leesburg adopted the Crescent Design District as part of the Zoning Ordinance on January 7, 2013. The goal of the Crescent Design District is to achieve a more urban style of development reminiscent of historic downtown Leesburg in the part of town located adjacent to the historic downtown. As such, the Crescent Design District calls for creating new street connections to create a grid pattern within this area, buildings located closer to the street with parking located behind the buildings, and staff-administered (as opposed to Board of Architectural Review approved) architectural design standards. This new district presents opportunities for greater densities, mix of uses and building heights than previously has been possible in this area of Leesburg.

Crescent District Image
Link to Crescent District Vicinity Map with Legend

The Crescent Design District encompasses approximately 428 acres and its general location is along East Market Street, Catoctin Circle and South King Street north of the Route 7/15 Bypass. In order to assure consistent implementation of the provisions of the new zoning district, the Town also passed amendments to the Town Plan, the Design and Construction Standards Manual, the Subdivision and Land Development Regulations, as well as amendments to the H-1 and H-2 architectural control overlay districts, since the Crescent Design District overlaps those two districts. A map of the Crescent District and the ordinances and amendments can be reviewed on the Town of Leesburg website at http://www.leesburgva.gov/index.aspx?page=1692.

For more information on the foregoing bills, please contact Andrew A. Painter or Christine Gleckner of the Loudoun office if you are interested in learning more about this innovative planning and zoning effort in the Town of Leesburg.

Tax Code Changes – Will They Impact You?

Posted on by Charles E. McWilliams, Jr.

by Charles E. McWilliams, Jr.

As tax season approaches I receive more frequent questions from my clients about what impact, if any, the American Taxpayer Relief Act of 2012 (“ATRA”) will have on them this year. The short answer is, “it depends”, but for some clients, the impact may be dramatic. For those of you who do not know about this legislation, ATRA is the new tax legislation that was signed into law on January 2, 2013, and it includes some very significant changes, some of which are summarized below.

Estate Taxes. The unified credit against estate taxes remains indexed for inflation and will be $5.25 million per person in 2013, with a rate of 40% on the excess. Fortunately, “portability” — the ability of spouses to share their unused exclusion amount — remains intact, but just as before, you must file an estate tax return (Form 706) to elect portability of the deceased spouse’s unused exclusion amount.

The annual gift tax exclusion amount increased to $14,000 per person for 2013, and Congress remained silent on family limited partnerships and other discounting strategies which still remain viable.

Investment Income. The 15% long-term capital gain bracket is retained for many taxpayers, but the ATRA also enacted a 0% bracket for certain low-income taxpayers, and a 20% bracket for taxpayers with an adjusted gross income (“AGI”) in excess of $400,000 for single taxpayers and $450,000 for couples. Worse yet, these capital gain brackets are combined with a new Medicare Tax on Investment Income equal to 3.8% for individuals with AGI in excess of $200,000 and couples in excess of $250,000. That means you could pay up to 23.8% on long-term capital gains in 2013, not including state taxes — that is a 59% increase in the tax rate on long-term capital gains!

Income Taxes. The ATRA added a new top tax bracket of 39.6% for single taxpayers with AGI in excess of $400,000, and $450,000 for couples. The phase out of itemized deductions beginning at $250,000 of AGI will also serve to increase the effective tax rate for many taxpayers, and the new Hospital Insurance Tax of 0.9% will be deducted from the payroll of single taxpayers making more than $200,000 ($250,000 for couples). Combining the above changes with an end to the payroll tax holiday and additional limitations on itemized deductions, most taxpayers earning more than $200,000 will pay several thousand dollars more in taxes in 2013.

This is not a comprehensive analysis of the ATRA changes, as there were literally hundreds of other changes to the tax code, but these are the most relevant changes for most taxpayers. Unfortunately, these changes will result in a net tax increase for most of our clients, but I cannot stress enough how important it is for you to have a relationship with a knowledgeable and experienced accountant who can help you navigate through these changes. There are numerous strategies that can be used to reduce your effective tax rate both during your lifetime and at death, but neither your accountant nor I can help you if you do not seek our assistance. In that light, please let me know if you would like to discuss your estate or business tax concerns in more detail, and I will gladly refer you to a qualified accountant if needed.

Redevelopment of Old Dominion Speedway

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Redeveloping a racetrack has its own set of challenges. For the Old Dominion Speedway, Stanley Martin Homes decided to redevelop it as a TND style, garage townhome community. Not surprisingly, there was strong support from the surrounding community, which was not amused by the “rolling thunder” soundtrack playing from March through October several nights a week.

The grid pattern neighborhood layout, with a 1½ acre central green, numerous pocket parks and an 8+ acre passive natural area, with walking trails, received strong support from Prince William County staff. The project received unanimous support from the Planning Commission and the Board of County Supervisors when it was approved in December, 2012.

Developers Taking Over Troubled Projects Must Take Caution

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A problem that has come to prominence recently is the developer that has run into financial problems and is no longer able to finish the project. Often in these cases the project is taken over by the bank or another developer. Generally speaking, the documents in these projects are in a very uncertain state. Significant problems may arise if some of the lots have been conveyed to the end-user by the original developer. In many cases, the new developer, for market reasons, needs to go in a different direction. In these cases, promises made by the original developer to owners, even oral ones, may be enforceable against the new developer under the law of Equitable Servitudes.

In Virginia, a court may use its equitable powers to enforce the promises made by a developer to an end-user who purchased property under the original scheme of development, even if that scheme of development has not been fully documented in the land records. If a new developer steps in to finish the project and had knowledge of, or even the opportunity to obtain knowledge of, the promises made by the original developer, then the theory of “equitable servitude” can be used to enforce the original developer’s intent, despite the fact that the lot has no recorded covenants.

Recently, we had the opportunity to put this concept to a test. A planned 21 lot single-family residential neighborhood of million dollar plus homes stalled during the middle of the 2008 financial crisis. The bank forced the developer to stop the project. A friendly foreclosure ensued. However, the developer had sold 3 finished lots prior to the foreclosure and had promised those owners that the entire subdivision would remain single-family dwelling units only. The original developer, seeking cash to appease the bank, sold some of the parcels to Loudoun County who intended to put a massive fire station complex on the two lots it purchased. The County knew of the original developer’s original intent for the project but believed it could proceed with the fire station because the restrictive covenants, which were intended to be recorded by the original developer limiting the property to a typical residential subdivision, had not been recorded.

Using the concept of equitable servitude, our attorneys Andy Burcher and Mike Kalish filed suit on behalf of the homeowners who had purchased from the original developer. The goal was to impose an equitable servitude enjoining the County from building anything that was inconsistent with the original developer’s scheme of development: detached single family residences. After a two-day trial, the Loudoun County Circuit Court concluded that the County had actual and constructive knowledge of the original developer’s scheme of development of detached single-family residences. Based on this knowledge, the Court enjoined the County from using the property for anything other than a single-family residence. The case is Oliver, et al v. Board of Supervisors (Loudoun County 2011), Letter Opinion dated December 2, 2011 by Judge Burke F. McCahill. The County appealed the decision and the Virginia Supreme Court denied the appeal, finding no error by the trial court.

For developers, it is important to understand the nature of the property that you are purchasing. Due diligence obviously includes a proper title search. However, due diligence must include a complete understanding of the history of the property and potential obligations of the original owner beyond the land records. The possibility that adjoining parcels that were part of an original scheme of development may be able to thwart your plans through an equitable servitude should not be ignored.

2013 General Assembly Update and Its Possible Consequences

Posted on by Andrew Painter

Virginia Capitol Building

The Virginia General Assembly convened January 9, 2013 and is scheduled to adjourn on February 23, 2013. Much of the 45-day “short session” has already been devoted to the discussion of federal budget impacts, uranium mining, implementation of the Affordable Care Act, and Governor McDonnell’s 2013 transportation package. “Crossover,” the last day for each house to consider its own legislation (excepting budget matters) and to forward all approved bills to the other chamber, is scheduled for February 5, 2013.

Walsh Colucci’s Legislative Committee has been monitoring several bills related to the real estate industry and a comprehensive legislative list may be downloaded here. Walsh Colucci will provide periodic updates on the status of these bills and will compile a final list of pertinent legislation following adjournment.

A comprehensive list of descriptions and resolutions of all bills filed during the 2013 General Assembly session may be found on the General Assembly’s Legislative Information Service homepage.

Some legislative initiatives of note include the following:

Attorney Fees In Zoning Actions (HB1429 (Morris)): This bill provides that a court may award reasonable attorney fees, expenses, and court costs to any person, group, or entity that prevails in a zoning action brought against it or that successfully challenges the validity of a zoning ordinance.

Dulles Toll Road Rates (HB 1696 (Minchew)): This bill authorizes VDOT to enter into an agreement with the Metropolitan Washington Airports Authority whereby MWAA would reduce tolls on the Dulles Toll Road in exchange for the Commonwealth’s moral obligation backing of bonds, not exceeding an aggregate principal amount of $500 million.

Stormwater Management Ordinances (HB2190 (Cosgrove)): This bill would require localities that adopt more stringent stormwater management requirements than those necessary to ensure compliance with the minimum regulations of the Soil and Water Conservation Board to submit such requirements to the Board to confirm that statutory requirements have been met and that the locality’s determinations pursuant to the statute are reasonable.

Recorded Plats and Final Site Plans (HB2238 (Marshall)): This bill provides that a site plan shall be deemed final once it has been reviewed and approved by the locality if the only requirement remaining to be satisfied in order to obtain a building permit is the submission of any other administrative documents, agreements, deposits, or fees required by the locality in order to obtain the permit.

Cash Proffers (HB2239: (Marshall)): This bill would provide that cash proffers shall not be used for any capital improvement to an existing facility that does not expand facility capacity or for any operating expense of an existing facility such as ordinary maintenance or repair.

Cash Proffers (HB2265 (Knight)): This bill would allow localities to waive certain written notice requirements in order to reduce, suspend, or eliminate outstanding cash proffer payments for residential construction calculated on a per dwelling-unit or per-home basis that have been agreed to, but unpaid, by any landowner.

Condominium Declarant Control Periods (HB2275 (Peace)): This bill would expand declarant control periods where a declarant has reserved the power to add more units to the condominium and provides that, at the request of the declarant and a two-thirds affirmative vote, the initial declarant control period for an expandable condominium may be extended at any time prior to its expiration, provided that it does not exceed 15 years from the settlement of the first unit to be sold in any portion of the condominium.

Governor’s Transportation Bill (HB2313 (Howell)): This bill would raise registration fees for vehicles and trailers, raises the license fees for electric vehicles, raises the state sales and use tax from 4 percent to 4.8 percent and designates the increased revenues for the Commonwealth Transportation Fund. The bill also proposes the elimination of the statewide gas tax and makes several technical changes related to the administration of these provisions.

For more information on the foregoing bills, please contact Andrew A. Painter.

New Tysons Transportation Service District and Funding Mechanisms Adopted for Tysons Infrastructure

Posted on by Admin

urban traffic image

The Tysons Transportation Service District was created by the Fairfax County Board of Supervisors on January 8. Within this Tysons Transportation Service District, funding mechanisms (taxes) were approved to help pay for the new roads and public transportation that will be needed to support the future, densely developed and urbanized Tysons. These new taxes will affect the approximately 6,000 commercial and residential properties in Tysons, and will be paid based on assessed property values. The tax rates will not be set until adoption of the next Fairfax County Budget, which is generally considered by the Board of Supervisors in April of each year. More information about the newly created Tysons Transportation Service District can be located starting on Page 87 of the January 8 Fairfax County “Board Package”, and which can be found at the following location:
http://www.fairfaxcounty.gov/government/board/bdagenda/2013/board-package-jan8.pdf.

A series of property maps that highlight all of the properties that are affected by the implementation of the Tysons Transportation Service District can be found on Fairfax County’s website at this location:
http://www.fairfaxcounty.gov/tysons/service_district_mapbook.pdf.

At this same public hearing, the Board of Supervisors adopted “Tysons-Wide” and “Grid of Streets” transportation funds; the guidelines associated with each fund; and adjusted the annual rate on the existing fund to reflect inflation. The new funds, guidelines, and the rate change will become effective on February 1, 2013. Additional information about these newly adopted funds can be located starting on Page 91 of the January 8 Fairfax County Board Package, and which can be located at the following location:
http://www.fairfaxcounty.gov/government/board/bdagenda/2013/board-package-jan8.pdf.

According to Fairfax County, it is estimated that the fund for the Grid of Streets will generate approximately $300 million over the next 40 years, and the Tysons–Wide fund will collect approximately $253 million during the same period. Developers within the Tysons Transportation Service District must contribute into these funds at the following rates:

    • “Grid of Streets” – $6.44 per square foot of commercial development and $1,000 per residential unit.
    • “Tysons-Wide” – $5.63 per square foot of commercial development and $1,000 per residential unit.