To the consternation of some members of the development community, Manassas is moving closer to adopting its first-ever proffer policy.
The policy, outlined Monday for the City Council by community development director Elizabeth Via, would be a guideline for the city in determining how much money developers should pay toward the city’s schools, roads and public safety.
Proffers are necessary because the tax revenue generated by new developments doesn’t cover the additional cost they cause to the city’s infrastructure, according to the guideline proposal.
The development community isn’t keen on some of the details of the proposal, however.
City staff met with local developers and a few attorneys March 17, a few days after the policy was first proposed to the City Council. During that meeting, questions were raised about both the methodology the city used in determining the amount of the proposed proffers and how the standards will be implemented, Via said.
“There are a bunch of property owners, one of my clients included, that purchased property without hearing even the slightest rumor that this was on the horizon,” said John Foote, an attorney who often represents developers and one of the attendees of the March 17 meeting. “This policy could add considerably to the cost of development.”
The proposed policy says the city would request $27,650 from a developer per single-family home, or $27,694 per town house. For apartments, developers would be asked to pay $13,769, or $13,061 per apartment.
Though proffer agreements themselves are not unusual — Manassas’ proposal is partially based on the policy used in Prince William County — the amounts expected by the city have raised some eyebrows.
“These are the highest proffer dollar numbers that we’ve seen in any jurisdiction,” said Foote, who works with developers from New Kent County to Winchester.
However, Via said the proposed amounts are reasonable for the area.
During her presentation Monday, Via showed a chart that listed the proffer amounts for several area jurisdictions. The highest was Loudon County, at $37,000 per single-family home. The lowest, at $14,730 per single-family home, was Fauquier County.
Though higher than Prince William County’s rate, the $27,650 requested from developers for the same type of home in Manassas would be comparable to other areas in the region, she said.
When and how the city would adopt the policy has also been questioned.
“This is an economic process,” Foote said. “Prince William County phased their proffer policy in over time, first at 60 percent, then 80 and finally at 100 percent. We’re suggesting that that be considered in Manassas as well.”
The question of how the proffers policy would apply to developments that are already in the works in Manassas hasn’t been answered yet, Via said, but will be decided before the proposal could become policy.
Adopting a proffer policy doesn’t make the process predictable for the city, however. Virginia’s courts and legislature are still hammering out the legal details of proffer agreements.
Via warned the council that proffer policies have been getting a lot of attention in Richmond recently. Legislation adopted by the state this year dictates that proffer money must be used by a locality within seven years of the time it is received, or it defaults back to the state, she said.
“Just because the city adopts this doesn’t mean all of a sudden we have checks from developers to pay for all out public facilities,” she said.
Likewise, the Virginia Supreme Court doesn’t have one definitive ruling on proffer policies yet, Foote said.
Even if the policy is adopted, developers probably won’t be driven away. But the policy could add to the cost of housing in the area, Foote said.
“The demand for housing is so great that it’s pretty much ‘build it and they will come,’ ” he said. “But the increase in cost could be passed along to the consumer.”
The City Council will likely vote on the proffer policy May 9. In the meantime, city staff will continue to talk to developers and the council to finalize the proposal, Via said.
Staff writer Rob Seal can be reached at (703) 369-5718.