The Land Lawyers Blog

Residential Modifications to “EDS Site”

Posted on by Admin

EDS Site Plan

On November 20, 2012, Walsh Colucci, representing Timber Ridge at EDS, LLC, an entity of the EPH Group, received unanimous support from the Fairfax County Board of Supervisors to allow modifications to a 37-acre portion of the “EDS Site” located at the intersection of Centreville Road and Wall Road. The Applicant modified the previously approved development plan to allow a total of 720 multifamily units and 85 townhomes. The development will be conveniently located to the north of the Dulles Discovery office complex that is currently under construction, the Route 28 technology corridor, as well as Dulles International Airport. The approved proffers provide for significant transportation and park improvements, including a North-South Collector Road which will connect the existing Air and Space Museum Parkway to McLearan Road, as well as dedication of a 17-acre park complex to the Fairfax County Park Authority to include 5 fields.

Redevelopment of Bergmann’s Drycleaner’s Site

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drawing of site

On December 8, 2012, Nan Walsh presented to the Arlington County Board the proposed redevelopment of the Bergmann’s Drycleaner’s site, located at the intersection of North Veitch Street and Lee Highway, less than a half mile from the Courthouse Metro Station. In unanimously approving the project, the County Board discussed policy issues including the exemption of a grocer from density, building height north of Lee Highway, and the need for a Lee Highway study. The project’s developer, McCaffery Interests, also developer of Market Common Clarendon, received approval of a 13,257 square foot MOM’s Organic Market and 202 multifamily dwelling units comprised of 42 units on the site’s west block and 160 units on the east block. The project’s benefits include LEED Gold certification, 11 on-site affordable housing units, realignment of the existing Custis Trail, addition of a gazebo and water fountain to serve trail users, an $150,000 contribution to allow improvements at McCoy Park, transportation improvements to the intersection of Lee Highway and Veitch Street, transportation demand management program, landscaping and perpetual maintenance of adjacent VDOT right-of-way, and clean-up of an environmentally contaminated site.

Transportation Projects Update

Posted on by Michael Coughlin

The following list identifies some major road projects in Northern Virginia (including the Stafford and Fredericksburg area) that are in the design or right-of-way acquisition phase. If you would like more information on these projects than is set out below, or if your property is affected by one of the projects, you are invited to contact one of our condemnation lawyers.

Prince William County Route 1/123 Interchange

VDOT is in the right-of-way acquisition phase for a new interchange between Route 1 and Route 123. Route 1 will be widened from four to six lanes between Mary’s Way and the Occoquan River. Route 123 will also be widened from four to six lanes from the Route 1 interchange to just east of the I-95 interchange. Right-of-way acquisition and the Route 1 widening (Phase 1) is fully funded; however, funding for the interchange (Phase 2) is not yet secured. Here is the projected schedule:

    • Within the next 90 days: offers made to property owners
    • 2013 – Begin utility relocation
    • 2014 – Advertise for construction
    • 2015 – Begin construction of Route 1 widening (Phase 1 improvements)

More information is available at:

http://www.virginiadot.org/projects/northernvirginia/route_1-123_interchange.asp

Route 1 Widening from Neabsco Mills Road to Featherstone Road

Prince William County, through its 2006 bond referendum, is widening Route 1 in this area to 6 lanes. Here is the current projected schedule:

    • November 2012: 60% plans for roadway and drainage design are available
    • Spring 2013: Right-of-way acquisition begins
    • December 2013: Utility construction begins, first with utility ductwork then roadwork starting in November 2014
    • Winter 2016: Construction complete

More information is available at:

http://www.pwcgov.org/government/dept/dot/Pages/Current-Road-Projects.aspx

Route 28 Widening (Linton Hall Road to Fitzwater Drive)

Prince William County is also widening Route 28 to four lanes in this area. Here is the projected schedule:

    • January 2013: Final construction plans available
    • Winter 2013: Right-of-way acquisition for Phases 1 and 2 begins
    • Summer 2013: Construction of Phase 1 begins (Linton Hall Road to re-aligned Vint Hill Road)
    • Phase 2 begins once funded

More information is available at:

http://www.pwcgov.org/government/dept/dot/Pages/Current-Road-Projects.aspx

Stafford New Stafford Interchange: Route 630/I-95

VDOT is in the design phase of a new interchange at I-95 exit 140 which will completely re-configure this interchange. The estimated project schedule is as follows:

    • November 2013: Right-of-way acquisition begins with appraisers working for VDOT contacting property owners
    • November 2015: Construction of the interchange begins pending approval of funding

VDOT has funding for the project design and for right-of-way acquisition. The preliminary design and details of the project can be viewed at:

http://www.virginiadot.org/projects/fredericksburg/route_630_courthouse_road_and_ interstate_95_interchange_reconstruction.asp

Route 17 Widening

VDOT will be widening route 17 in Stafford County to six lanes west of Interstate 95 from McLane Drive to 0.2 miles north of Stafford Lakes Parkway. The project is fully funded, right-of-way acquisition has begun, and construction should begin in the late winter of 2013, with an estimated completion date in 2015.

Fredericksburg Fall Hill Road Widening

The City of Fredericksburg and VDOT are working together to widen Fall Hill Road to four lanes between Carl D. Silver Parkway and an extension of Mary Washington Boulevard. The project is in the design phase, with a design-build contract solicitation coming soon. Right-of-way acquisition will begin in late 2013, and construction will run from mid-2014 to mid-2016.

More details are available at:

http://www.fredericksburgva.gov

City of Alexandria New Sanitary Sewer Master Plan

Posted on by Admin

On December 17, 2012, the City of Alexandria’s Planning Commission will hold a workshop to allow for additional community consideration of a proposed Sanitary Sewer Master Plan that, if adopted, will provide for funding strategies that will significantly increase connection fees for multi-family development. If you or your company is developing new multi-family projects in the City, be aware that your previous budgeting models may no longer apply when factoring sewer costs. It is anticipated that the Planning Commission public hearing on this Plan will occur in February 2013 and that the City Council will consider it in late February or March of 2013.

To increase sanitary sewer revenue, one proposed option is to increase the sanitary sewer connection fees. Sanitary sewer connection fees are charges to new projects that connect to a City sewer line. An examination of the connection fees by the City’s Transportation and Environmental Services staff revealed that the City’s multi-family connection fees are currently only 50% of the City’s single-family connection fee, whereas most other neighboring jurisdictions’ multi-family connection fees are 80-100% of the single-family connection fees. City staff is recommending that the connection fee for multi-family development projects be increased from 50% of the single-family connection fee to 90% of the single-family connection fee, phased in over a two year period starting in FY 2014, which is a significant change from previous practices.

Additional strategies proposed in the Sanitary Sewer Master Plan to increase revenue include: increased user fees; development funded connection system improvements; treatment capacity reservation; wet weather mitigation contribution; and combined sewer separation and mitigation contributions.

Alexandria’s wastewater collection system dates back to the 1800s and includes a sewer system that conveys a combination of storm water and wastewater to the Potomac River in the Old Town Area. Their system includes separate sanitary sewers, interceptor sewers and associated sewer assets and two wastewater treatment facilities. Current and projected growth within the jurisdiction of the City, combined with new regulatory considerations, have prompted the City to take proactive action to ensure adequate future capacity and compliance with regulations.

For more information, please contact Cathy Puskar (cpuskar@arl.thelandlawyers.com).

Eminent Domain Constitutional Amendment

Posted on by Michael Coughlin

During its past session, the General Assembly passed Senate Bill No. 240, which authorized a ballot question on November 6th on whether Virginia should amend its Constitution to further restrict the exercise of eminent domain. The full text of the bill, including the constitutional amendment and ballot question can be found at http://leg1.state.va.us/cgi-bin/legp504.exe?121+ful+SB240. The voters of Virginia approved the amendment by margin of 3 to 1 on November 6th.

Here is the new addition to Article I, Section 11:

That the General Assembly shall pass no law whereby private property, the right to which is fundamental, shall be damaged or taken except for public use. No private property shall be damaged or taken for public use without just compensation to the owner thereof. No more private property may be taken than necessary to achieve the stated public use. Just compensation shall be no less than the value of the property taken, lost profits and lost access, and damages to the residue caused by the taking. The terms “lost profits” and “lost access” are to be defined by the General Assembly. A public service company, public service corporation, or railroad exercises the power of eminent domain for public use when such exercise is for the authorized provision of utility, common carrier, or railroad services. In all other cases, a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development, except for the elimination of a public nuisance existing on the property. The condemnor bears the burden of proving that the use is public, without a presumption that it is.

Generally, Virginia’s localities and the Virginia Department of Transportation were opposed to the amendment, while the largest advocate group for the amendment is the Virginia Farm Bureau. Localities and VDOT fear that the amendment will increase the cost of acquiring land in large part because the amendment would permit landowners to recover damages for lost profits, which currently are not recoverable under existing law if they are remote and speculative. Meanwhile, the General Assembly has defined in a companion bill how lost profits are recoverable, and has also limited the recovery for “lost access” to “a material impairment of direct access to property.” This companion Senate Bill No. 437 can be found at http://leg1.state.va.us/cgi-bin/legp504.exe?121+ful+CHAP0719.

The General Assembly was very busy with eminent domain matters this last session, because they also adopted an amendment to Va. Code Ann. Sec. 1-219.1, which currently sets limits on the exercise of eminent domain, but now attempts to also exempt takings for sewer lines, roads, stormwater facilities and other facilities from the test set out in the constitutional amendment for determining whether a taking is for a public use. The text of House Bill No. 975 can be found at http://leg1.state.va.us/cgi-bin/legp504.exe?121+ful+CHAP0626.

What does all of this mean for property owners facing the threat of eminent domain? First, you can now recover lost business profits if you own the land where the business is located or, as a tenant have exclusive possession of substantially all of the land taken. The lost profits recoverable are limited to “three years from the date of valuation that is suffered as a result of the taking… ” Second, compensation is available for loss of direct access caused by a taking, but that is already available under existing law. The amendment will enshrine this element of damages in the constitution, and should clarify what type of access changes lead to damages that are constitutionally recoverable.

Third, property owners will have a greater ability to challenge whether the amount of land taken is “necessary to achieve the stated public use.” Landowners will also be able to have a court decide whether a taking is truly for a public use, with the burden on the condemning authority to establish that the use is public, as opposed to being for “private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development.” But, the General Assembly’s amendment to Va. Code Ann. Sec. 1-219.1 attempts to narrow the circumstances where public use challenges can be made.

VDOT is commencing right-of-way acquisition throughout Northern Virginia for several major projects. With this passage of the amendment, we should find out quickly how profitable “lost profit” claims will be. In future editions of Virginia’s Land Sense, our condemnation lawyers will keep you apprised of major VDOT and local projects that will lead to the exercise of eminent domain.

Town of Leesburg Historic District

Posted on by Admin

street viewOn September 6, 2012 the Town of Leesburg Board of Architectural Review granted the Certificates of Appropriateness required to implement the redevelopment of land owned by the Arundel family, and on which the Loudoun Times-Mirror (LTM) bases its operation in the heart of the downtown Leesburg historic district. This project is significant for the Town of Leesburg, since it is for the only undeveloped parcel within its downtown’s old and historic district, the centerpiece of Leesburg’s identity and character.

Randy Minchew, the managing shareholder for the Leesburg office, and land use planner, Christine Gleckner, began working with L4 Realty Capital, LLC (L4) and its representatives, Landmark Realty, nearly two years ago, in an attempt to gain approval for the redevelopment of this site. The plan was fairly straightforward: reuse the early 20th century LTM building on Market Street for retail and restaurant use, demolish the cinderblock building at the rear of the LTM building, construct a three-story retail/restaurant/office building at the corner of Loudoun and Church Streets at a scale compatible with the existing buildings in the same block on Loudoun Street, and construct a large footplate building (25,000 SF) in the existing parking area between Market and Loudoun Streets and accessed from Church Street, with underground parking proposed beneath the office building.

Since the site is located atop diabase rock, it was too expensive to construct all of the required parking to support the proposed uses underground as originally envisioned. As a result, the proposed plan included one and a half levels of below ground parking and three levels of above-ground structured parking with two levels of office above the parking. The resulting structure, however, exceeded the maximum height limit of the B-1 Community (Downtown) Business zoning district in which the project is located. The Leesburg office of Walsh, Colucci, Lubeley, Emrich & Walsh, P.C. was engaged by L4 Realty Capital, LLC to assist with pursuing a zoning ordinance amendment to increase the height limit to enable the project to move forward. After studying the proposed amendment, Town staff concluded that the height characteristics of the surrounding buildings, coupled with the topography (the site is located at a lower elevation), would not be detrimental to the character of the downtown Leesburg historic district. The zoning ordinance amendment was successfully adopted.

The structured parking component required a special exception that proved to be challenging. Although the structure required special exception approval, the proposed uses for the project did not. It was difficult to separate the special exception use from the permitted uses as they were located in a single structure of a scale that could possibly overwhelm the historic district. To address this concern, the structure, located in the middle of the block behind existing three story buildings, was articulated with varying facades and with the upper levels stepped back to meet the setback requirements of the new maximum height limitations.

This project received much public scrutiny due to its scale and its impact on the highly prized historic district. The approval can be attributed to a cooperative approach, responding to each concern raised. It is believed that Leesburg will be the beneficiary of this $30 million investment in its downtown, while retaining the historic character it has worked so hard to preserve.

The Estate Tax and Gifting Game of 2012

Posted on by Charles E. McWilliams, Jr.

Nearly every time I go into an estate planning meeting the first question my client asks is, “What’s going to happen with the estate tax next year.” Unfortunately, I cannot provide my clients with an answer I would be willing to bet on. For those of you who do not understand what prompts the initial question, I will enlighten you. Today, you could gift (or die with) up to $5.12 million and not owe a penny in estate taxes, but on January 1, 2013, this number drops to a mere $1 million unless Congress passes new estate tax laws. Worse yet, any money above that $1 million threshold will be subject to tax at a 55% rate.

One thing that is nearly certain is that Congress will not pass any new estate tax laws until after the elections, and I would be surprised if we see them do anything before mid-December. Even then, I do not expect to see Congress make any groundbreaking moves. In other words, they will not abolish the estate tax, and I do not think Congress will let it fall back to a $1 million exemption, as that would hit far too many of their constituents throughout major metropolitan areas such as northern Virginia. Even so, I have many clients who want to take advantage of the increased exemption now in case the exemption amount is lower in the future.

So, the next question is: How can I gift millions of dollars and yet retain control of the money? Technically, the answer is that you cannot because such a gift would constitute a retained interest in violation of Internal Revenue Code §2036; however, there are some ways to work within the bounds of the law and minimize the effect on your budget. Please note these are complex strategies that you should implement only with the counsel of an experienced estate planning attorney, as there are many traps for the unwary.

The goal is to set up a trust that utilizes nearly all of the donor’s estate tax exemption today so he will have transferred more money free of estate taxes if he dies at a time when the exemption is lower. If the exemption is higher when he dies, then the donor will have more money to give away tax-free. If the donor can set this up so he receives the income from a trust established by his wife and she receives the income from a similar trust established by her husband, it would be a win-win situation for the donor; but as we all know, the IRS does not like to lose. Ultimately, the IRS would declare these trusts to be in violation of the reciprocal trust doctrine. In layman’s terms, the IRS looks at the two trusts together, and if both spouses are in the same relative position before and after the creation of the trusts, then the IRS will take the position that nothing of substance happened. Based on existing precedent, the IRS will prevail in their argument, but there are ways to adjust to trusts to accomplish similar objectives with a lower risk of losing an IRS challenge.

If you are like the vast majority of Americans and cannot afford to give up $10 million this year, there are still options available. You can take advantage of annual exclusion gifts of $13,000 per beneficiary, per year, and a married couple can employ gift splitting to increase this to $26,000. Further, you can pay certain medical and educational expenses in unlimited amounts if the payment is made directly to the educational institution or health care provider. If that is not enough inducement to pay for your grandchild’s educational expenses, you could also take advantage of the 5-year election for contributions to §529 educational savings accounts. This means a married couple can contribute up to $65,000 each ($130,000 total) to a §529 plan in any one year, and that contribution is treated (for tax purposes) as having been made pro rata over a 5-year period. The election is not automatic, and you must file Form 709 to elect the 5-year option, but this is a wonderful option for grandparents to provide funds that will grow tax-free until they are used to pay educational expenses.

Loudoun Metro Tax Districts Public Hearing

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The Loudoun County Board of Supervisors voted to hold a public hearing on October 17, 2012 to discuss the three tax districts that will provide the funding to construct and maintain Metrorail in Loudoun County. The three tax districts consist of the Metrorail Service District; the Airport Station Service District; and the Route 772 Station Service District. The tax districts encompass primarily commercial properties in the immediate vicinity of the rail stations (see maps below). The motion to approve the public hearing date, made by Supervisor Shawn Williams (Broad Run), included a friendly amendment from Chairman Scott York (At Large) stipulating that the service districts have a maximum tax of $0.20 per $100 assessed value, and that tax relief for the elderly and permanently disabled be extended to each of the proposed service districts. The three tax districts cover over 1,000 parcels of land. It is anticipated that the tax districts will take effect on January 1, 2013.

The Metrorail Service District is planned to remain in effect no longer than necessary to fund Loudoun County’s Silver Line Phase 2 Capital Contribution as listed in the July 19, 2007 “Agreement to Fund the Capital Cost of Construction of Metrorail in the Dulles Corridor”. This capital contribution will provide funding for the construction of the Silver Line from the Fairfax County/Loudoun County line to its terminus near Route 772; the Dulles Airport station; the Route 606 station; the Route 772 station; and related facilities and structures including, but not limited to parking facilities, a rail yard, vehicular and pedestrian access, electrical facilities and equipment, and other supporting equipment and infrastructure.

Unlike the Metrorail Service District, the taxing authority of the Airport Station and Route 772 Service Districts will not be halted once the construction of the Silver Line and its related facilities is complete. These two service districts will be created for an indefinite term. The purpose of these two service districts is to provide a source of revenue continuing beyond the term of the Metrorail Service District for the purpose of funding the ongoing cost of providing service to the stations, including but not limited to any fees, charges, subsidies or other payments by Loudoun County to WMATA to provide Metrorail transit service.

Proposed Metrorail Service DistrictProposed Route 772 Station Service District
Proposed Metrorail Service DistrictProposed Route 772 Station Service District

Proposed Route 772 Station Service District Inset 1Proposed Route 772 Station Service District Inset 2
Proposed Route 772 Inset 1Proposed Route 772 Inset 2

Proposed Route 606 Airport Station Service District
Proposed Route 606 Airport Service District

Condominium and Homeowner Association Development Update

Posted on by Admin

The Virginia General Assembly has enacted new laws which require all associations (Homeowner Associations and Condominium Associations) to adopt complaint resolution procedures, and cost recovery policies. These laws are currently in effect, and though the main impact is on existing communities, developers need to make certain that their management companies have the necessary policies and procedures in place for all new developments.

Section 55-530 of the Code of Virginia requires all associations to establish procedures for the resolution of written complaints from the association members and other citizens. The Virginia Department of Professional Occupational Regulation, and the Common Interest Community Ombudsman Regulations, require all associations to publish their complaint procedures.

A second requirement states that each association must adopt a “Cost Schedule” in order to charge its members the actual cost for reviewing and copying the records of the association.

Under the new statutory provisions, in order to recover costs, associations must have a policy in place that sets forth the Cost Schedule for the labor and material charges for the requested documents. This Cost Schedule should reflect charges that are reasonable, and costs may not exceed the actual cost incurred by an association.

Our firm can provide assistance with getting these procedures adopted and in place. Please contact Bill Fogarty or Mike Kieffer for additional information.