In 2008, the Board of Supervisors adopted “16 Principles for Public Investment to Support Commercial Revitalization” (the 2008 Principles). Over the years, the 2008 Principles have been used to evaluate potential county financial support for proposed revitalization projects. The principles have guided staff through project review and all phases of diligence. For example, use of the 2008 Principles demonstrated that the successful Mosaic development would not have gone forward without (“but for”) the use of Tax Increment Financing (TIF).
Based on experience working with the 2008 principles, staff proposed several revisions to make the principles more focused and useful when evaluating the county’s options. The “Revised Principles” were adopted by the Board of Supervisors on August 2, 2022, replacing the 2008 Principles. The Revised Principles consolidate the 2008 Principles from 16 to 12 but all the critical elements included in the 2008 Principles have been retained in the Revised Principles, including:
- Comply with the Comprehensive Plan and Zoning Ordinance
- No negative impact on the County’s credit rating
- Transparency from the developer for requested information
- TIF financing must be properly structured
- Proposal must meet the “but for” test (the project would not go forward “but for” the public investment)
12 Principles for Public Investment to Support Development
- Public funds shall be directed toward “Pioneer Projects,” which may include single-site projects, multi-site projects, or other public improvements that have strategic importance related to achieving the County’s goals.
- Public benefits shall further the County’s revitalization, environmental, redevelopment, affordable housing, investment, or other policy objectives. The public purpose and financial and other benefits from all publicly funded improvements shall be clearly defined and, based upon the nature of the benefit, measurable or otherwise demonstrable.
- Projects must comply with the County’s Comprehensive Plan and Zoning Ordinance.
- Public funding mechanisms shall only be used for public improvements authorized by Virginia law and specified by the Board of Supervisors. Public improvements may include, but are not limited to, environmental infrastructure, transit, utilities, bicycle, pedestrian and streetscape infrastructure, public parks, open spaces, cultural facilities, and parking garages.
- There shall be no potential negative impact on the County’s credit rating or reputation in the capital markets.
- To limit the potential direct or indirect liability (or other risks) to the County from a project (or its development), the developer shall provide financial or other assurances in a type and at a level acceptable to the County.
- Public funding proposals must include (i) a detailed analysis of the project’s financial feasibility and (ii) a description of the costs the developer proposes to bear up-front or over time. The County reserves the right to determine the costs to be borne by the developer versus the public on a case-by-case basis.
- Tax increment (TIF) or special assessment financing using a Community Development Authority may be considered upon a demonstration (a “but for test”) that an appropriate rate of return to encourage private investment is not otherwise feasible. Other types of special tax districts (such as special service districts or improvement districts) and associated financial approaches may also be considered.
- To permit the County to conduct appropriate diligence, developers must grant the County full access to all relevant records, including project plans, pro formas and other relevant information for any project requesting County support.
- TIF or special assessment financing will be considered only with advance contractual participation of all affected landowners.
- TIF or special assessment bonds shall be structured conservatively with appropriate debt service coverage to maximize the likelihood that pledged revenues will be sufficient to pay debt service and with a special tax back-up, in appropriate dases.
- TIF or special assessment bonds shall mature no later than the useful life of the financed assets.