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Dulles, Loudoun Metro Rail Project Update (and my $0.02)

April 19, 2012 by Danilo Bogdanovic  
Filed under Uncategorized

 

There’s been a lot of talk lately about the Dulles/Loudoun metro rail project. It’s a hot topic because there’s a lot of money involved and a lot at stake – for everyone. Well, here’s an update…

I had the opportunity to attend a forum on the Dulles/Loudoun metro rail project last month. It took place at the Dulles Area Association of REALTORS(r) and featured three speakers…

  • Pat Nowakowski, Chief Construction Manager, Dulles Rail, MWAA
  • Patricia Nikoson, President, Dulles Corridor Rail Association
  • Honorable Suzanne Volpe, Loudoun County Board of Supervisors

Here’s the update in a nutshell…

  • Loudoun County is still up in the air as to whether they want to commit to Phase 2 of the Dulles/Loudoun metro rail project.
  • Loudoun received a one-month extension from June 4, 2012 to July 4, 2012 to decide whether they’re in or out (a bit ironic that the deadline is “Independence Day”)
  • If Loudoun opts in, they will move forward with the plans to extend the metro rail all the way to Route 772 (Loudoun County Parkway)
  • If Loudoun opts out, the metro rail will stop at Dulles airport
  • As you may have already guessed, Pat Nowakowsk and Patricia Nikoson are proponents of extending the metro rail all the way to Route 772 while the Honorable Suzanne Volke and the Loudoun County Board of Supervisors in general are a bit skeptical about it
  • Loudoun is skeptical because the studies conducted are not very in-depth and leave out key considerations that should be taken into account. In situations like this, not being thorough and not taking everything into consideration can easily equal millions of more dollars in additional costs to Loudoun.

Here is my $0.02…

The Dulles/Loudoun metro rail project sounds good at first. The metro rail out to Arlington and then Falls Church and Vienna made a large and good impact on Fairfax County and didn’t empty their coffers. And extending the metro rail to Tyson’s and Reston makes sense as well. So it should be good for Loudoun as well, right?

After looking at the small print, I don’t think so. And here’s why…

Fairfax County has a corporate tax base of 30+ percent. But Loudoun has a corporate tax base of only about 18 percent. This means that Loudoun County home owners will bear a much higher responsibility when it comes to paying the tens of millions of dollars per year in operating and maintenance costs associated with the Dulles/Loudoun metro rail project.

Fairfax County has a much higher population than Loudoun County – 1,086,743 versus 312,311 (2010). This puts the cost/tax burden per resident and home owner in Fairfax County at a much lower amount than per resident in Loudoun County.

A good number of folks who will use the metro rail in Reston and Tysons’ will be working in Fairfax County and bringing jobs (and corporate taxes) to Fairfax County to help offset the cost. Some of them will also live in Fairfax County which will add to the residential/home owner taxes collected by Fairfax County.

On the other hand, the overwhelming majority of people using the metro rail in Loudoun County will be commuting to/from jobs in Fairfax County, Washington, DC and other parts of the metro area – not Loudoun County.

And let’s not forget to address the issue of people who live in other counties in VA, West Virgina or even Maryland who will be commuting along Route 50, Route 7, Route 9 and Route 15 to the metro station in order to go work in Fairfax County, DC, etc.

In essence, Loudoun County will be subsidizing neighboring localities and non-Loudoun residents.

Yes, subsidizing. Because for every dollar it costs someone to ride the metro, Loudoun will pay about half of that out of the county budget. When a metro rail rider pays $5 for a fare card, Loudoun will have to cough up about the same amount to cover the actual cost of trip.

Where does the money come from for that subsidizing? Taxes. And with such a low corporate tax base, it’s Loudoun County home owners who will get the bill stuck to them. It’s either that or Loudoun starts cutting services (and we all know how well that will go over with residents).

Now here’s the kicker (warning, PG-13 language coming up)…

Loudoun is damned if they do and damned if they don’t.

If Loudoun does NOT back out of the full Dulles/Loudoun metro rail project (aka Phase 2), they will be going in semi-blind not knowing what to fully expect when it comes to ridership, costs, future impact on residents and home-owners, etc. Current operating/maintenance costs are estimated at $30M per year. That’s a lot of money per year, but it could be a lot more than that (and most likely will be).

If Loudoun DOES back out, albeit lower, they will still have to pay a percentage of the metro rail project out to Dulles Airport. And many metro rail proponents will call the current Loudoun County Board of Superivsors, “the ones that killed that metro rail project”.

A deal with the devil was made…

Yes, I said devil. Because that’s what MWAA is starting to look and feel like. MWAA is paying a percentage of the costs of building the metro rail, but they are not responsible for much, if any of the operating/maintenance costs. And they’re passing the buck of paying the debt service on to guess who…the counties.

All the while, MWAA will retain control of the toll amount on the Toll Rd. They’ve already received approval from Virginia to raise the rates over the course of the next decade or so. Imagine paying $5 at the smaller tolls along the Dulles Toll Rd and over $16 at the big Dulles Greenway Toll (that’s each way).

Now stop imaging. Because that’s what they project tolls will be by 2026 – and that’s IF the operating and maintenance costs of the metro rail stay in line with MWAA’s “projections”.

On a related note…the Dulles Greenway is the most expensive road to drive on per mile in the United States. And the deal MWAA got on the road/land to begin with makes what they’re charging highway robbery (literally).

In case you’re wondering how Loudoun got stuck in this position to begin with…well…that’s a conversation for another day. Unfortunately, there’s no third option. It’s either in or out and both options cost a lot of money.

The current Loudoun County Board of Supervisors have it tough… They have the responsibility of making what is probably the biggest and most financially influential decision in Loudoun County’s history. And there’s no option that won’t cost Loudoun residents a lot of money nor leave both sides of the fence happy.

P.S. There were many more details discussed during the Dulles/Loudoun metro rail presentation. If you would like to get those details or discuss the project and its’ impact on Loudoun in more depth, feel free to call me – 703.582.6900.

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Comments

4 Comments on "Dulles, Loudoun Metro Rail Project Update (and my $0.02)"

  1. Evelyn on Mon, 7th May 2012 12:00 pm 

    Thank you for the easy to understand synopsis of the issues surrounding this mess. Does anyone know what will happen to the projects surrounding the proposed metro station if this opt out occurs. Will the huge mixed us community planned around the station occur anyone. It seems investors must have a lot of money already sunk into these developments.

  2. Bob Bruhns on Mon, 7th May 2012 10:33 pm 

    Homeowners will pay even more, because there is no rail tax district in Loudoun County. That means that homeowners out west will pay for this as though it benefits them as much as it benefits the landowners and businesses within 1/2 mile of the stations – while those lucky landowners and businesses right around the stations will enjoy their windfall to the fullest.

    The fact that there is already a Rt 28 tax district doesn’t make any difference, as far as I’m concerned. If the Rt 28 Corridor, and Rail to Loudoun, are supposed to be so beneficial and wonderful – then those who benefit from both, can pay for both. No?

  3. Dr. Ken Sisco on Tue, 8th May 2012 3:39 pm 

    I disagree with your sceptic viewpoint about Phase II of the Metro project. These are my predictions if Phase II is approved and completed:
    1. Property values will double over the next ten years
    2. The population will triple over that time period
    3. Property tax revenue will double over the same period.
    4. Loudoun county will be more populated and prosperous than Fairfax county with countless industries moving into the county such that corporate tax revenue will soar even at 18%.
    Approving this project is a must.

  4. Bob Bruhns on Thu, 17th May 2012 10:24 am 

    Some preliminary results are in from a June 21, 2011 audit of MWAA management and a March 15, 2012 audit of the Dulles Rail Phase II project.

    Do a web search on ‘ Interim Response Letter to Congressmen Wolf and Latham Regarding MWAA ‘ – the US DOT Inspector General’s preliminary report is on the DOT GOV website.

    Also do a web search on ‘ Wolf Statement On Release of Inspector General’s Interim Report On MWAA ‘ – Congressman Wolf has some interesting comments on the HOUSE GOV website.

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