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Tax Clash Adds Tension To Debate Over Potomac Yard

Potomac Yard was once the busiest rail yard in the county. Now it's being redeveloped with million dollars houses, where homeowners are expected to pay a higher tax rate to help fund construction of a new Metro station.
Horydczak, Theodor, ca. 1890-1971. Theodor Horydczak Collection (Library of Congress)
Potomac Yard was once the busiest rail yard in the county. Now it's being redeveloped with million dollars houses, where homeowners are expected to pay a higher tax rate to help fund construction of a new Metro station.

City leaders in Alexandria are moving forward with a plan to build the largest public works project there in a generation: a new Metro station at Potomac Yard. But some of the details about who will pay for it — and how it will look — are still to be determined.

In the past year, hundreds of new residents have flocked to the million-dollar houses in Potomac Yard, a former rail yard south of Reagan National Airport that's being redeveloped into high-end housing. And many of those new residents are just now learning that they could have a higher tax rate.

"We are going to be harmed by this," says Vicky Lessa, who moved to the neighborhood eight months ago. "People will be well aware when they go to purchase a home that, oh, by the way, if you buy one in Potomac Yard, you are going to pay tens of thousands of dollars in taxes."

The current tax rate is $1.038 for every $100 of assessed value, but homeowners in Potomac Yard would have a $1.238 tax rate for every $100 of assessed value. City officials estimate that the special tax district would generate about half a million dollars in revenue each year.

For now, that's only part of how the Alexandria City Council plans to finance the $300 million station. The city also would take on $200 million in debt. The Council voted unanimously Wednesday night in favor of a site called Alternative B behind the Target on U.S. 1.

The financing plan is quite different from what happened in the 1980s, when the King Street Metro station was constructed.

"This is a very complicated financing structure and it's the result of basically the federal government getting out of funding transportation adequately," says Alexandria City Manager Mark Jinks. "So it has forced localities in our case to kind of look for multiple sources, in a sense a stack, of different revenue sources in order to make the financing work."

Vice Mayor Allison Silberberg has some ideas about what she called the "Gateway to Old Town" should look.

"If something is painted, it's not white or gray or you know sleek but rather it's painted dark brown like National Park Service or dark green to fit in with the lush look of that area."

"I've always seen the King Street station as the gateway to Old Town. So we already have one of those," says Councilman John Chapman. "So this is a new opportunity for a new neighborhood to really set its course on who they are."

Meanwhile, City Council members are leaving the question of how they'll fund the station for another day and say they're willing to reconsider the higher rate for the special tax district. That means hundreds of residents who live in Potomac Yard don't know if they will be hit with the bill to pay about a half million dollars a year.

"We didn't have a seat at the table when the decision was made," says Anthony Istrico, who has lived in Potomac Yard for about six months. "The least they can do is reexamine the discussion on the funding policies or at least exclude our residents and limit it to commercial, which will be booming through the growth of the Metro."

City leaders say they don't have to make a final decision about the tax rate until they are ready to start issuing contracts.

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