Leesburg Town Council approves settlement related to Compass Creek Annexation

The Leesburg Town Council has voted to approve a voluntary settlement agreement with the County of Loudoun related to the annexation of more than 400 acres at the Compass Creek property for economic development purposes.

The Feb. 27 action follows a Feb. 6 vote by the Loudoun County Board of Supervisors to approve the agreement. The Town and the County engaged in a mediation session in early January in hopes of avoiding a contested hearing. Since the County’s vote, all property owners within the 402-acre Compass Creek development, including Microsoft, have consented to be brought into Town limits, a stipulation of the agreement between the Town and the County.

Additional terms of the agreement include:

• The Town will be the primary utility provider for water and sewer for all properties within Compass Creek. Leesburg will not object if, at a later time, Microsoft wishes to obtain water and sewer service from Loudoun Water for future phases. If this happens, Microsoft will not be reimbursed by the Town for any availability fees paid to date or owed. In this case, the Town would no longer receive revenue for water and sewer services, but all relevant taxes remain in effect.
• The County will pay the Town an annual economic development payment of $2 million with an annual 3% inflation escalator. For so long as the County makes this respective annual payment, the Town will not assess the surcharge for out-of-town water and sewer customers.
• The Town will not seek to become an independent city for a period of 25 years after the current moratorium on the incorporation of new cities in Virginia is lifted. Currently, towns cannot seek becoming a city due to the moratorium that has been in effect since 1987 and does not expire until 2032.
• The County and the Town will process agreed boundary line adjustments where the landowner has consented in writing to such change. The Town will not commence adversarial annexations against property in the County for a period of 25 years after the date of the agreement or any subsequent agreed boundary line adjustment other than a boundary line adjustment involving small parcels or those made for public improvement projects. It is important to note that, by law, the Town is not permitted to pursue annexation for 10 years after commencing the Compass Creek annexation. This agreement adds an additional 15 years to this statutory period.
• The parties will use their best efforts to obtain all necessary approvals by the respective governing bodies, the Commission on Local Government, and special court by December 31, 2024.

“The vote to approve the voluntary settlement agreement is a huge positive step in the right direction for the Town of Leesburg,” stated Mayor Kelly Burk. “In addition to the annual $2 million payment from Loudoun County to offset the higher rates that would be charged to out-of-town customers, the Town expects to realize, conservatively speaking, an additional $10 million to $12 million annually in personal property taxes generated by the businesses located within Compass Creek upon full build-out. This agreement is a boon to our economic development efforts, and I couldn’t be more pleased that this part of the process has been achieved. We appreciate the Board of Supervisors’ support of this agreement.”

The Town began talks with the County in the fall of 2018 regarding bringing all of Compass Creek into the Town by way of boundary line adjustments. In September 2022, the Town Council voted to authorize Town staff to move forward with the annexation of the remaining 402.8317-acre portion of Compass Creek that is not currently in the Town limits. This includes more than 323 acres of land owned by Microsoft Corporation, and the land that currently contains the Walmart and AtHome stores. The county had previously approved a boundary line adjustment for Walmart and AtHome but did not submit to the Courts for final approval.  

A March 21 hearing before the Commission on Local Government is planned. At this meeting, there will be an opportunity for members of the public to speak during a public hearing. Details will be forthcoming.