Monday, February 12, 2007

Honey, I Lost the Revenue!

Today is the day our tax assessments will be mailed by the City of Alexandria.

How appropriate that today we are also learning about a lawsuit over tax assessments that casts serious doubt on the theory that big development slashes homeowners' tax burden.

This morning's Examiner reveals that LCOR Alexandria LLC, the owner of several properties at Carlyle including the Patent & Trademark Office site, has sued the City of Alexandria over its 2004 tax bill. LCOR, which is suing on behalf of the General Services Administration (GSA), claims the City overstated its property tax values by $500 million.

At the time it was approved, Carlyle was projected to be a billion dollar development and the deal for the PTO was the single largest lease in GSA history.

The grounds for the lawsuit? Retail at Carlyle never took off, making the properties less valuable.

But here's what the story missed.

If LCOR prevails — and the suit goes to court later this month — nearly $5.2 million in revenue will be lost to City coffers for FY 2004, based on the then-prevailing tax rate of $1.035 per $100 of assessed value.

It gets worse. An LCOR victory may also mean lost revenue of almost $5.0 million in FY 2005 (when the rate was $0.995 per $100 of assessed value) and another $4.6 million lost for FY 2006 (at the rate of $0.915 per $100 of assessed value).

Total potential damage from Alexandria's failure to deliver retail: $14.8 million.

And who do you think is going to make that deficit up?