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A Form Of Extortion Or Just Smart Planning? Va. Considers Limiting Proffers

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Forty years ago, when development was booming in Fairfax County, government leaders at the Massey Building had an idea: Create a system to make demands on builders so they would have to pay for traffic improvements and sewer upgrades. Over time, though, that system expanded and developers started offering things themselves, such as providing computers to local schools or forking over cash to an affordable housing fund.

The problem, some Virginia lawmakers say, is that the costs of those proffers — a system that was institutionalized statewide in the late 1970s — are often passed on to homebuyers. And business leaders say the system represents little more than extortion, hitting businesses for uniform cash contributions regardless of a project's size.

"In Loudoun and some counties, the proffers are very aggressive in some of those counties," says Sen. Mark Obenshain (R-26), who introduced a bill to limit what governments can demand. "And what happens is that nurses or police officers or public safety officials who may work inside the Beltway, they can't afford the extra $60,000 that may be tacked onto a house."

The opposition to proffers has grown strong enough that the General Assembly is sending legislation to Democratic Gov. Terry McAuliffe. Obenshain's bill passed the state Senate this week with a decisive 29-8 vote. That comes on the heels of last week's 68-27 vote in the House of Delegates for a version introduced by Del. Todd Gilbert (R-15).

It's possible that McAuliffe could make a changes to the bill to make it more acceptable in Northern Virginia, where some officials say the state should stay out of what are essentially local decisions.

Sen. Chap Petersen (D-34), a Democrat from Fairfax County, says the bill is a terrible idea because it does more than outlaw governments' demands for amenities. "You're talking about proffers which a locality accepts," says Petersen. "Not demands, but what they accept."

During a debate on the floor of the Senate this week, Petersen recalled his experience as a member of the Fairfax City Council in the late 1990s and early 2000s. He said he never went to developers with a list of demands; they always came to him with a set of things they were willing to offer. Then he pointed to language in the bill that seems to make that phenomenon illegal.

"So you could have somebody come in and say well I want more density and I'm willing to do X, Y and Z for it," says Petersen. "And you could accept those proffers, and just under the plain letter of this law you're suddenly opening yourself up for liability."

If McAuliffe makes changes to the bill, lawmakers would have final say over whether to accept them. Before the legislation gets to his desk, the House and Senate will reconcile their two versions of it.

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