Currently there is no limit on the amount of exemption, but the county is considering imposing a $750,000 maximum as Fairfax County has done.
The county wants to strike a balance between encouraging more people to use the program and limiting its own financial exposure in offering the break.
The Prince WIlliam Board of County Supervisors on Tuesday is expected to approve a public hearing on possible amendments to the program. It has a sunset date of Dec. 31 unless continued, so now is the time to make changes if there are to be any, county officials said.
More than 40 cities and counties in Virginia have adopted rehabilitation ordinances as tools for property improvement. A tax break will encourage owners to fix up older areas, the theory goes.
But since the program’s inception in Prince William in 1998, only 11 county homeowners or businesses have chosen to participate.
“We were surprised at how little participation there was,” said county Finance Director Chris Martino. “We’ve tried to advertise it far and wide.”
Fairfax County discovered that homeowners would have made the improvements anyway, so the program was not as much of an incentive. Fairfax County eliminated non-rental properties from its scope after surveying 290 homeowners who said they would have completed the renovations without the exemption.
Prince William does not want to go that route, Martino said, continuing to allow all property types to participate.
One Fairfax property that qualified for very large savings was in an area that would have redeveloped anyway, he said. He proposed the $750,000 cap to prevent that from happening in Prince William, but the board will have the final say. None of the properties in Prince William would be affected by the the limit.
Six Prince William homes, one apartment building and four other commercial or industrial owners took advantage of the program in 2002 for a total tax savings of $76,342. Eight others — all residences — have applications in progress.
To qualify, properties must increase in value at least 25 percent. Homes must be at least 15 years old, commercial and industrial properties 20 years old, and hotels 35 years old.
Based on the 2004 tax rate of $1.22 per $100 of assessed value, for each $100,000 of increased value from rehabilitation, an exemption of $1,220 would be realized. The result would be a total tax savings of $14,640 over the 15 year life of the program.
The biggest savings in 2002 went to Shenandoah Station Apartments in Triangle, which received a tax break of $59,990 in fiscal year 2002. A manager there said it was well worth the trouble of applying.
“We’ve done extensive renovations, we pretty much gutted the entire property, all 172 units and it was near a disastrous situation,” said Melissa Peckhaus, property manager for Main Street Realty which owns the complex. “They came in and cleaned them out and everything is brand new. We expanded the apartment sizes and upgraded the property 100 percent.”
The program has another benefit for renters. There’s a limitation on how much rents can be raised, she said. However Peckhaus also said a lot of paperwork is involved which may turn some applicants off or cause them to be disqualified.