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Developer incentives top supervisors’ agenda / February 04, 2019

The Halifax County Board of Supervisors will meet tonight at 6:30 p.m. in Halifax for the first time with County Administrator Scott Simpson presiding in his new job.

A major order of business for the supervisors is a request by local housing developers for tax incentives to offset the cost of extending infrastructure to new residential subdivisions — a big-ticket expense that has held back home building for decades, developers argue, especially with homes marketed to high-end professionals.

The developers want supervisors to provide them with rebate payments over the first 10 years equal to the new real estate taxes generated from the construction of new subdivisions. At tonight’s meeting, board members will consider a recommendation to pay back half of all such tax revenues for a period of 15 years.

The funds would be issued to developers through the Halifax Opportunity Fund, administered by the Industrial Development Authority. The Halifax Opportunity Fund also makes incentive payments to enterprise zone industries and businesses that meet hiring and business investment goals.

In his notes to supervisors, outgoing interim County Administrator Dan Sleeper writes that the board “has heard the pros and cons of this argument several times” before, with developers pleading for relief from high infrastructure costs — such as the Halifax County Service Authority’s hookup fee of $2,911 per unit for water and sewer.

This contrasts with the view “that if developers were paid back for development the new home owner [would be] taxed to support the developer’s profit,” Sleeper continues.

Real estate taxes are paid by the homeowner, not the subdivision, raising equity concerns if tax rebates go to developers, county officials have said in the past.

However, the larger issue “is what is needed in this community now, ” Sleeper writes to supervisors — concluding that the answer is “a better selection of housing stock.

“The current Medical and Industrial professional working in Halifax County are not living here,” Sleeper writes. “Because there is a limited housing market to choose from evidenced by the success of the [apartment] lofts being [built] in Halifax and South Boston.”

The recommendation to supervisors was developed by an ad hoc committee appointed by the board to study the issue. Three local developers — John Cannon, Christian Roberts and A.B. Jones Jr. — serve on the panel, along with county and town officials. As proposed by the ad hoc committee, the rebate payments would apply only to residential subdivisions of three units or more, with each property having a minimum real estate tax value of $150,000.

To quality for rebates, developers would first have to run infrastructure such roads, curbs and gutters and water and sewer infrastructure into new subdivisions. They also would have to meet all county requirements for new home construction, not be part of any other public incentive program, and all tax payments on the properties would have to be made promptly.

The latest recommendation to provide partial rebates over a 15-year period is much different than what county and town officials proposed should be done when they reviewed the issue last year.

In June 2018, then-county administrator Jim Halasz reported back to supervisors with the findings of a group that included himself, town managers Tom Raab and Carl Espy, then-IDA director Matt Leonard and HCSA Executive Director Mark Estes — providing an overview that largely pushed back at the arguments being made by the housing developers.

Noting that programs like the State Enterprise Zone and Agriculture and Forestry Industries Development (AFID) programs are intended to respond to critical community goals or needs, Halasz noted that no other Virginia county offers an equivalent program to incentivize construction of market-rate housing.

As a result, advised Halasz at the time, “[w]e find no rationale for such a program, as we cannot conclude that market rate residential development rises to the level of an unmet and urgent or critical need requiring government intervention in the private market.”

The group of county and town officials also took issue with the developers’ proposal on equity grounds, noting that any tax payments rebated to developers would not be paid not by them, but by homebuyers in the subdivision. “Thus, the proposed program would transfer funds from one private entity (the homeowner) to another private entity (the developer),” Halasz wrote, adding that “local government should not reward one sector of the private market over another.”

While some cities may offer subdivision incentives — local developers have cited the example of Danville, which provides payments up to $18,000 per lot — Halasz argued last year that Danville is a special case, insofar as it is in competition with Pittsylvania for new home building and growth of the local tax base. Furthermore, Danville has an extensive list of public utilities to support — electric, natural gas, water and wastewater — and needs new customers to generate income for these systems, Halasz said.

“So while the City of Danville may (or may not) benefit from such an incentive program — Halifax County is not in a position to do so based on the significant differences between our two localities,” the former administrator wrote.

For their part, developers have argued that their request is budget-neutral for the county — since all rebate payments would come from the revenues that their projects generate for the county.

Advocates also point to the pending Halifax County strategic plan, being developed in tandem with community economic research firm Market Street Services, which highlights the need for Halifax County to do more to attract young professionals to the area.

Homes with modern appurtenances and upscale features are essential to attract educated professionals who in turn are key to the county’s economic development. “New subdivisions are essential for our county to compete successfully,” supervisors heard last year from Roberts, the develop group’s public spokesman.

“Younger generations of professionals want a new type of neighborhood that we are offering,” Roberts told supervisors, “with high-speed internet, modern appliances, less acreage/low maintenance” and proximity to local attractions such as the hospital, SVHEC, walking trails and The Prizery.

“Modern subdivisions are needed to fill the other key housing niche for modern family-oriented neighborhoods” not served by projects such as the Halifax Lofts and New Brick Exchange Lofts, said Roberts. “This is critical to economic development.”

In other business at their meeting tonight:

» Supervisors will consider a recommendation to spend $11,360 on asbestos abatement at the Commonwealth’s Attorney’s building, which is due to be torn down on the courthouse square to make room for a replacement facility for the prosecutor’s office. Discovery of asbestos-related issues has delayed the demolition of the century-old building, Sleeper has advised supervisors.

“That is putting us behind” on the entire Courthouse Renovation Project, Sleeper noted. “We should already be demolishing the building.”

The county’s contract would be with Hurt & Proffitt, an engineering and environmental services firm in the region.

» The board will host a public hearing on the disposal of the Cluster Springs Early Learning Center property, previously the old Cluster Springs school property. Supervisors are expected to review the bids for the site and select the best alternative for the county.

» The board also will host a public hearing on renaming Middle Fork Trail to Freedom Lane, and adopt an ordinance for the naming of county roads that sets an application fee of $400 with street naming requests.

» Supervisors are slated to hear from Kathy Andrews, director of the Halifax County Department of Social Services, who is seeking an increase in the county’s indigent burial fund for those who have no means to pay for their burials. The county currently budgets between $5,000 to $7,000 each year for the fund.

» Also set to speak tonight is Halifax County Superintendent of Schools Mark Lineburg, who regularly updates supervisors on matters pertaining to Halifax County Public Schools. Lineburg will be speaking in the aftermath of setbacks to two bills in the General Assembly — by local Del. James Edmunds and State Sen. Bill Stanley — to help with the county’s push for a new facility to replace Halifax County High School. The legislative proposals by Edmunds and Stanley failed to get out of House and Senate committees.

However, Edmunds’ bill — to allow a local sales tax in Halifax County to pay for a new school — is still alive after the House Finance Committee revived the measure on Friday. It still must pass the full House by a two-thirds supermajority before it can go over to the Senate (see related story).

» Supervisors also will present a resolution honoring late News & Record editor Sylvia O. McLaughlin for her years of service covering news in Halifax County.

Tonight’s meeting will begin at 6:30 p.m. in the second floor meeting room of the Bethune Office Complex in Halifax.

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