COUNTY OF ALBEMARLE
Policy Regarding Community Development Authorities
Establish County preferences for the use of Community Development Authorities (CDAs)
Tucker, Foley, Davis, Graham
LEGAL REVIEW: Yes
September 1, 2004
ACTION: X INFORMATION:
Over the past several months the Board has reviewed the use of Community Development Authorities (CDAs) as a means to address major infrastructure development in the County. CDAs are “corporate body politics and corporate and political subdivisions of the Commonwealth” created by a locality by ordinance upon petition of the landowners within the proposed area to be included within the CDA. CDAs represent one mechanism to pay for and finance infrastructure that is necessary to meet the increased demands placed upon a locality as a result of development.
The use of a CDA has been proposed by the North Pointe Development as a component of its proposed rezoning for the purpose of financing its infrastructure. There is a significant difference between the North Pointe proposal and the CDAs proffered in two earlier rezonings. The prior proffered CDAs would provide the County a new method for funding capital improvements, such as regional transportation improvements, by creating a special tax district. The North Pointe CDA would be used to fund typical development costs and proffered improvements by assessing all the properties within the development an amount to pay for tax-exempt bonds used to finance those development related improvements. The North Pointe CDA is effectively a means of reducing development costs and paying for proffered improvements while the previously proffered CDAs were a means of addressing regional impacts created, in part, by that new development.
The questions before the Board are:
1. If and when is it appropriate to use CDAs to facilitate development; and
2. Should the County share in the benefit derived from the approval of a CDA by requiring it to assist in paying for the infrastructure that supports the County’s implementation of the Comprehensive Plan’s master planning initiatives?
Goal: 4.2 Fund County services in a fair, efficient manner and provide needed public facilities and infrastructure.
The recent discussion and consideration of CDAs has focused primarily on how a CDA is formed and its potential uses, rather than when use of a CDA is appropriate or desirable in Albemarle County. In other localities, CDAs have been used as a tool or incentive to attract development by providing a financing mechanism that reduces overall development costs. During recent discussions, members of the Board and staff have suggested that the use of a CDA should be reserved for improvements that go above and beyond the typical improvements expected in a rezoning to offset the impact of the development. Clarifying the County’s position on the appropriate use of a CDA is important because it could significantly affect North Pointe’s approach to its pending rezoning application. However, it is also important in a broader sense because of the potential use of CDAs as a means to address urban infrastructure needs in general.
Based on the County’s current land use and economic development policies, staff believes the use of CDA’s should be reserved as one tool to help finance infrastructure that is necessary to implement area master plans that have been adopted as part of the County’s Comprehensive Plan. In areas where a master plan has not been approved, staff would recommend that CDAs be considered on an exceptional basis and only after any pending zoning actions have been decided. Staff believes that the use of a CDA should not facilitate development outside of the County’s master planning process.
It will still be necessary to determine what types of improvements should be financed by a CDA. Many improvements should continue to be development costs paid for by developers. However, improvements that are above and beyond what would typically be expected to be provided by a developer could be addressed by utilizing the advantages of a CDA financing. While determining what should be expected to offset the impact of any particular development will remain a part of the rezoning process, some guidance from the Board will be necessary to define what is clearly above and beyond what would typically be expected to be a developer paid cost of development.
Staff recommends that the Board adopt a policy to limit the use of developer initiated CDAs to the following situations:
If the Board agrees with this proposed policy, it will be necessary for staff to present the Board with additional information and analysis regarding what might be considered to be “typical improvements” that would normally be expected to be paid for by a developer without the use of a CDA and “special improvements” that would be appropriate to be financed by use of a CDA. Defining these improvements will be a necessary component of a final CDA policy.
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