Cupidity all around us

By Charles Houston

Perhaps all of us have some degree of cupidity – greed, or simply wanting more and more of something. That’s fine unless it’s at the expense of others. Then it’s a problem, and Loudoun has some nasty examples.

The Dulles Greenway

No surprise that its Aussie owners are back again, this time for a 40% increase in tolls. Their rationalizations ring about as true as the hawking of a snake oil salesman. Here are two: That the 40% toll increase will actually save money for commuters, and that it will keep traffic off neighborhood streets. My college minor was economics, and through that lens I think the truth is the exact opposite of those claims.

The toll road is governed by the State Corporate Commission (SCC) and the Greedway owners lobby constantly and effectively. Over the years it has requested constant rate increases in order to earn a fair return on its investment. So, what is that investment? And what is “fair”?

The Greenway was originally financed for $350 million in the 1993 – 1995 time period. The highway failed to meet initial toll projections and its debt was restructured. (Meaning, “Lenders, please lower my mortgage payments.”)

A sale and more borrowing

In September 2005 the Australian firm Macquarie bought the road for $617 million. Would a fair return be based on the $350 million cost, or on the $617 million paid by the new owner? I’d say the lower number is the fair one, but lobbyists convinced the SCC to use the much higher purchase price to justify increased tolls. Loudoun and Fairfax were left out of that decision. 

There are strong suspicions that the road’s owners have added still more debt, probably just to take some cash from its asset, and it wants the SCC to determine the fair return based on this inflated level of debt (i.e., debt over and above the purchase price.) To be fair, around $70 million was needed to widen the road from four lanes to six.

From bad to worse

The cupidity gets worse. In addition to the huge 40% toll increase, the Aussies had a Delegate introduce a bill before the General Assembly demanding many disturbing things: Removing much State oversight; allowing it to negotiate in secrecy with the SCC; removing requirements for public hearings; retracting the right of County officials to sit in on those meetings; and exempting its negotiations from State transparency laws.

Blimey! Can you say, “Thank heaven for Route 7”?

Kill Good Dirt

Three years ago, the Board of Supervisors unanimously approved a Board Member Initiative (BMI) to amend zoning and related regulations to protect prime agricultural soils and to improve the design of cluster subdivisions, which many people in western Loudoun detest.

A lot of staff work produced a document that would protect 70% of these prime soils. A war ensued.

Conflict

One warring combatant was the Count of Conservation, whose mustered forces included engineers and other of his consultants, and several land speculators who’ve turned conservation easements into a lucrative cash business. A handful of other landowners were brought along, and on July 13 the war began at a Planning Commission meeting. The other combatants were ordinary citizens and citizens, and many farmers.

Clearly the Count and his coterie had been heavily lobbying Staff and Supervisors (and making significant campaign contributions.) Their argument was simple: Even the slightest constraint on their site engineering would require changes to land planning that would reduce site density.

It’s all about density

Here, density means the number of acres per house, currently five acres. Density drives values. More density makes a property more valuable, and lower density, less valuable.

Staff had solved this problem by allowing clusters to be as small as five houses. Current zoning requires all houses, up to 25, to be in a single cluster. That makes for a large footprint, and thus it would be harder to work around prime soils using large clusters. Under Staff’s new proposal, clusters of only 5 homes can be pinpointed on a property, making it easier to lay out a site and avoid prime soils. This would allow engineers to spread houses around a tract of land rather than plop all houses together in one place. This new flexibility, an engineer told me, should usually result in no change in density for most properties.

Threats

The Count ignored this concept and threatened to move his easement business out of the county. If you want to think of the psychology behind threats, Google “Narcissistic Personality Disorder.” I’m not saying it applies here, but you might find it interesting.

Apparently, the Planning Commissioners don’t like threats, and a majority of their comments seemed to endorse the 70% level of prime soils protection. Unfortunately, they decided to hire an engineering consultant and to defer a decision. Bummer. 

In developing millions of square feet of office buildings for an Atlanta firm, Charles Houston never had to pave a single gravel road. He lives on an unpaved road where traffic is slow and safe.