Coming out of summer to busier times, the City of Falls Church’s business community finds itself confronted by not one, or two, but three cases where City Hall is contemplating putting it at a distinct disadvantage. Articles in this week’s edition deal with the City’s consideration of (1) a major new tax on commercial real estate, which passes through to retailers and customers, (2) a cigarette ban in restaurants and bars, which would drive customers out of town, and (3) forcing the density of the Atlantic Realty’s proposed City Center plan below the level required to make it financially feasible. All three, to the extent they hurt business, would also eat at the City’s revenue base.
While no final decisions have been made on any of these matters yet, the mere fact they’re being considered seriously is already giving board members of the Greater Falls Church Chamber of Commerce heartburn. The board at its Tuesday business meeting discussed all three with high-level City Hall officials present who sat and took notes. There was an overwhelming consensus that the Chamber will need to step up in a major way to speak out on them all this fall.
First, the commercial real estate proposal to increase the rate by probably 10% in the next fiscal year, is now permitted by the state legislature to be a way to fund improvements in transportation. The legislature actually OK’d a jump of up to 25%, but no area jurisdictions seem inclined to go that far. Still, the thinking at F.C. City Hall is that Falls Church should stay shoulder-to-shoulder on this with what surrounding counties do, but that would be grossly unfair to Falls Church City businesses, since almost all are small and operate on slim profit margins. By contrast, Fairfax County and Arlington, both, have commercial giants, Fortune 500 companies and countless large-scale national retailers that can afford to bear the brunt of such a stiff tax hike. Falls Church businesses should not be expected to match what those counties can do, and the impact may well be to drive a number of Falls Church establishments into the ground.
Second, the cigarette ban proposal, reported in last week’s News-Press, would drive away even more business. Falls Church restaurants who have worked years to build up clienteles that happen to smoke would lose them to very nearby alternatives almost overnight. The City would then also lose meal tax and sales tax revenues.
Third, City Hall is continuing to pressure Atlantic Realty to reduce the number of residential rental units it wants in its plan for the City Center, having already talked down the height of its proposed office building to a mere six stories. “We can’t go any further without finding the numbers just don’t add up for us,” an Atlantic spokesman told the Chamber board. If they pull the plug on that one, the City stands to lose upwards of $2 million a year in sorely needed tax revenues.