MAN ABOUT TOWN: Peak Oil and a ‘Peaked’ City
By GEORGE SOUTHERN
Falls Church Times Columnist
March 29, 2010
For years now, Tom Whipple, husband of our State Senator Mary Margaret Whipple, has written a weekly column in the News-Press on “Peak Oil,” the thesis being: “Wake up — the world’s running out of oil!”
Week after week, year after year, Mr. Whipple reminds us of this inconvenient fact, apparently oblivious that we would prefer not to hear it anymore. We would prefer not to believe it.
The Man About Town empathizes with Mr. Whipple, for I, too, have been jousting at windmills for six months now, with the reaction from friends, colleagues, and critics generally being one of “Enough – you’ve made your point; now write about something more entertaining.”
My thesis is that Falls Church City is economically unsustainable. Just as the world’s supply of oil is finite and diminishing, the City’s supply of commercial property is finite and diminishing. Meanwhile, the City’s appetite for educational services increases, just as the world’s appetite for oil increases. Reducing oil consumption can only postpone, not solve, the energy crisis. Cutting the City budget and raising taxes can only postpone, not solve, the City’s fiscal crisis.
Reading the “Peak Oil” column this week, I realized that by changing a word here and there, it applied perfectly to our City. So with apologies to Mr. Whipple, here’s my “Peaked City” version of his “Peak Oil.”
In the years since it became widely recognized that world oil production apparent that Falls Church’s fiscal condition would likely go into irretrievable decline early in the 21st century, no national City government has yet to officially recognize that a major paradigm shift is in the offing and begin planning for it.
Those governments City residents that respond to questions on the subject usually point to International Energy Agency optimistic projections indicating that all will be well for many years in future years. Even as the evidence mounts that another 40 years of increasing oil production tax base and economic growth probably is not in the cards, no major political leader has stepped up to face reality.
For a major political leader to publicly acknowledge that world oil production the City’s fiscal balance sheet is soon going into an unstoppable decline is a very dangerous undertaking, for the implications are unpalatable to most. If a politician were to take the next step and start talking about remedies for falling oil supplies income — conservation, fuel-efficient cars, mass transit, perhaps even rationing – consolidation with Arlington County — it would be almost certain political suicide.
“Almost certain political suicide.” That’s why no candidate for City Council or the School Board dares characterize the City’s future as unsustainable. Even Ira Kaylin, who in this week’s News-Press has written the clearest summation of the City’s fiscal crisis that I’ve seen, backs down at the end and says the crisis can be solved through commercial development – “our best and perhaps only chance to remain a vibrant and independent City.”
The Wizard of Oz is my favorite movie, because there seems to be a scene or a line that applies to every circumstance in our lives. Right now I’m thinking of the scene when Dorothy and friends emerge from the woods and behold in the distance the spectacular Emerald City. This is the vision our City optimists hold for Falls Church – that somehow within our 2.2 square miles surrounded by the wilderness of Fairfax and Arlington counties, we can become a Mecca for commercial development.
Maybe we can also strike oil. The reality is that Falls Church is not particularly appealing to commercial developers – but it’s quite desirable for residential development. People want to live here and send their children to school here. When they shop they go to Tysons or Seven Corners.
Two of our City Council members are lame ducks, and one of them, Dan Maller, is speaking out. I once held hopes that Maller might be our next mayor, but now that he’s speaking freely, one of his proposals is bizarre. In a “farewell” piece of sorts in the March 4 News-Press, Maller notes that the most valuable property in the area is the 30 acres containing the City’s high school and middle school. In an act of fiscal desperation, he suggests selling that 30 acres and using the funds to build new schools on the land at South Maple and Broad earmarked for the proposed City Center complex! Earth to Dan: You don’t knock down a $25 million school five years after you build it, even if it’s in Times Square.
Councilman Nader Baroukh, writing last week in the Falls Church Times, nailed the budget problem but not the solution. He rightly faults the proposed budget for “sending us down an unsustainable path of ever growing tax rate increases” and for failing to adequately address capital improvement and fund balance replenishment needs. Baroukh’s solution? Cut City Hall personnel costs. I ask: And the year after? And the year after that? Who will be the last man standing?
I hope Tom Whipple finds a new subject to write about soon.
By George Southern
March 29, 2010
“The reality is that Falls Church is not particularly appealing to commercial developers.” Is this true? If so, why not?
I would love for FCT to put on their journalist hats and really examine the history of commercial development (or lack there of) in the City, as well as what would need to be done to make it happen in the future. There have been lots of theories shared in the comments on this blog and others, but the answer “because it hasn’t happened yet” is not a valid reason.
Brian, thanks for raising this. I try to keep my columns around 800 words, so I didn’t go into this question. One of the reasons Falls Church City is attractive as a “small town” is because it lacks the inducements that would have caused large-scale commercial development. In two words, those inducements are roads and Metro. North Arlington has the Metro running straight down it, and therefore the explosive development of Ballston, Clarendon, and Court House. Tysons has the Beltway and Leesburg Pike. Shirlington has I-395. Yes, Falls Church has Route 7, but it’s a quagmire by the time it reaches the City, taking too long to access from the Beltway. Likewise, Lee Highway (Washington Street) in Falls Church is too distant from Metro or Beltway. So Dan Maller is right — the best land for large commercial development is probably around the West Falls Church Metro. Trouble is, that’s outside City Limits — including the school property! So I find all this talk about “corridor development” to have a fatal flaw: Corridor development certainly will take place sooner or later, but it will be largely outside City Limits — around both the East and West Falls Church Metro stops. And even though we will get some spillover, it’s not going to be enough to meaningfully reduce the residential tax burden.
George, I have to disagree that our location is the problem. We’re not further from the Beltway than much of Tysons; we have Interstate 66; and Leesburg Pike in town is hardly any worse than Leesburg Pike through Tysons.
Plus, while we’re not right on top of Metro, we’re a lot closer than many areas that have significant commercial development. What location-related amenities does Fairfax City have that we don’t?
This doesn’t mean our problems are solvable — only that the location is not the issue.
GEORGE RESPONDS: Steve, we’ll have to agree to disagree about the location. But to answer your question, what does Fairfax City have that we don’t, I would say — other than twice the population and three times the area — not much. Interestingly, despite being significantly larger than Falls Church, Fairfax City doesn’t try to run its own school system, preferring to contract that out to Fairfax County.
I have to agree with Stephen. There are plenty of examples of areas with successful commercial development that aren’t right on top of a Metro stop, and we have great access to major roads (7, 29, 50, 66). I think Falls Church City offers an exceptionally centralized location. It’s part of why Andy & I located our business in the City — our staff lives in Rockville, Ashburn, Centreville, Alexandria, Arlington, DC, etc.
As the economy improves and commercial development comes back, I think the areas I discussed in my recent blog post (http://www.fallschurchinsider.com/2010/02/commercial-development-in-the-little-city-of-falls-church/) will be highly desirable if (1) our residents welcome it, (2) our City leadership outlines a clear vision & plan for how we want all to fit together, and (3) we can offer incentives (not the least of which is an efficient approval process) that help us compete with surrounding areas.
My belief is that significant commercial development will come to this area one way or another within the next decade. The only question is whether we maintain our independence and both influence and benefit from it (with exceptionally great schools and services) or whether we give up, get swallowed into Arlington County, and let Arlington’s leaders manage the development the way they — not we — want to.
I live right now in Merrifield and from where I stand all of Northern Virginia is on the trajectory toward default and ultimate restructuring of all levels of debt including that of Fairfax County, Arlington, Alexandria and Falls Church.
Not tomorrow, but inevitably.
This is the consequence of levering to the automobile and all that comes with it which is nothing but an embodiment of the dynamic of non- returning expense without end.
Every molecule of Northern Virginia is oriented around auto use and auto ease, auto convenience, auto expense and auto waste. Take away the cars and the entire mess goes bankrupt anyway since it is an auto habitat with little place for humans and none at all for nature which is stupid since all humans are intimately part of nature.
The Soviet Union failed because of it was unable to create substantive land reform. The same is true about the US and more so about suburbs. The entire mess must be reformed as to purpose and to the direction of earning returns when all factors are measured on a balance sheet without externalities. That means Northern Virginia will become largely agricultural – that is, real farms not gardens in suburban back yards – and towns will consolidate where transport such as trains and canals are available. The towns I have in mind are concentrated and with no space at all for automobiles which will not exist.
It took fifty years for Fairfax County to turn into the stupifying disaster area it is now. I recall farm and cornfields along Rte 123 and the general store, the 2 lane roads and the tower @ Tysons Corner. It will take fifty years to go back to that. If we are lucky, that is. We might wind up in the 14th century, if we aren’t.
I think in our hearts we all know what has to be done but the courage to face the truth is lacking. Our slavery to convenience has made us cowards.
If you want to find a template for a decent Falls Church, send some people over to Florence, Italy and have them see what a real city looks like. Define parameters, make some simple plans and do the exact same thing in Falls Church. In two hundred years you might have something.
It’s nice to see I can go on vacation and still my questions for George get posted to the comments!
I, of course, agree with Brian and Stephen that the location of Falls Church can’t be the overriding reason why development can’t happen here – because there are enough other examples in the area where development has happened with similar issues. Now, I’m not talking about turning Falls Church into another Ballston or Tyson’s Corner – I’m talking about average density commercial development like we see all over Arlington, Fairfax, Alexandria, etc. Here’s an example – the two towers (BB&T these days?) up by Seven Corners – those are in Fairfax County. What would be the tax swing if those were in Falls Church (about 100 yards from where they are now)?
But I know George wants to agree to disagree – which is okay (although I’d love to see more digging into this idea that Falls Church’s location is just a death sentence for commercial development).
Here’s a serious two part question for George on this topic: you want Falls Church to become part of Arlington County. Others have suggested that current law would require us to become part of Fairfax County.
1) What would it take (and how feasible would it be) to actually become part of Arlington County and not Fairfax County?
2) If becoming part of Fairfax County was the only realistic option would you still support that move (over trying to keep Falls Church an independent city)?
George has called me his nemesis in the past (I think he’s joking… but I’m not sure) – but honestly I just really like Falls Church as an independent City (and specifically I like the small school system) and so I’m doing whatever I can do keep it alive.
Andy — I will accept the fact that you took a vacation, but I can not believe that you were off the Internet for 48 hours!
Two points:
1) I don’t think Falls Church City is “bad” for development — I just don’t see a lot of opportunity in these 2.2 square miles. For example, contrast Route 7 in the City with Route 7 through Tysons Corner. Because Falls Church was developed long before surrounding areas, residential lots back up almost to Broad Street. There’s no more space for commercial ventures like shopping centers, Big Box stores, or car dealerships on the scale of Tysons. Same is true for our other corridors. One of the largest remaining commercial areas was the Diener property — which City Council allowed to be developed into condominiums (now apartments) in return for the one office building (where you work). I argued before that with double the projected students in those apartments, the net tax return to the City is negative — even including the Tax Analysts building. As an EDA member with good access to facts and figures, you said you were going to fact-check that, and now that you’ve had a vacation, this would be a good time to start!
2) The history of cities in the United States is one of expansion and consolidation. Cities require the tax base furnished by a mix of commercial, industrial, and residential. This is why Arlington and Fairfax counties (which are cities in all but name) thrive. Yes, the recession hit Fairfax County hard, but it will recover. Falls Church, regrettably, has no means to recover because we are increasingly dependent on residential. Because the state of Virgina prohibits cities from “swallowing up” surrounding county areas, Falls Church was prevented from expanding and now is doomed. The only alternative is consolidation. It’s not a question of whether I would support consolidation if it had to be with Fairfax County instead of Arlington County, because there is no alternative to consolidation, period. My plea has been that the sooner our politicians and planners accept that there is no alternative, the sooner they can take steps to guide that consolidation in the way we want it to happen — which I think most people agree would be to consolidate with Arlington rather than with Fairfax. And forget the “current law” — it’s all a matter of political will. The State Legislature will enact whatever Fairfax, Arlington, and Falls Church urge it to. The trick is to obtain a consensus among those three entities — and that’s where the City’s ownership of the waterworks could be a big deal-maker and save the day.
George, thanks for the response – I actually had Internet access most of the time but only from my phone where the typing wasn’t much fun. Can’t live without the Internet!
I’ll accept your #2 answer – sounds like you would favor a merger with Arlington but you’d live with a merge with Fairfax County. We will have to agree to disagree on the inevitability of consolidation.
As for your #1 – I think there are a few areas where sufficient commercial development could happen. I’m not suggesting we try to land big office complexes or big box stores are car dealerships. I also don’t think the Broad Street corridor is where we can get the kind of development we need. Mike outlined the kinds of development that could happen between South Maple and Washington. There are some patches along the North Washington corridor that would be ripe for development if we could get a western entrance to the EFC metro stop built. And the VA Tech class presented to the EDA some really cool options down around the Eden Center.
So, at this point I think we have two options. We can start talking to Arlington and Fairfax about merging or we can invest some time, energy, and money in planning the few commercial areas we have to see if we can build up enough of a commercial tax base to sustain the City going forward. I’m pushing for the second approach. I’m not sure why anyone would appose it to be honest. Merging with Arlington or Fairfax wouldn’t prevent development of those areas eventually (speaking of things that are inevitable) so why not try and get it done sooner than later so we don’t have to merge?
As for the Pearson Square and Tax Analyst project. Our email conversation ended on 11/24/09 when you said you were going to look more carefully at the City’s report on the issue. The City’s report says that the project has a net positive impact of $339,517 per year. You suggested that there was more to it related to the proffers involved in the project – but I never understood what you meant by that and I never heard back from you on it. Are you still arguing that the project has a net negative financial impact on the City? What is the basis for that argument? (Not that any of this is all that relevant to the topic at hand.)
I don’t think I really have any more access to info as a member of the EDA than any other citizen has. If there’s some specific info you’re looking for let me know and I can ask around. I’m satisfied that although the Pearson Square project isn’t a big cash cow for the City (due to the conversion from condos to apartments) it is better than what was there before. Was it the best use of that land in the City? I don’t know – all that was sorted out before my time.
GEORGE RESPONDS — Thanks Andy — but I think you could have at least typed a few comments on your cell phone over the past two days. But seriously — the information I would need is: 1) how many people live at Pearson Square; 2) the per-capita cost to run this city (excluding schools) 3) the cost to the City to service Tax Analysts Building (and I have no idea how that would be computed, but we know it’s not free). Then we know the cost burden for these developments, excluding education. I already know that Pearson Square has 64 students at an annual cost of $18,788 each, or $1,202,432. Add that cost to the other numbers and we know the total taxpayer burden of Pearson Square. Subtract that from the tax receipts and see if the difference is positive or negative. After we’ve done all that we can discuss whether the proffer that got us ArtSpace should be included in that equation.
I’m not sure what the current “official” population of the City is (seems like we’ll have a pretty accurate number once the census is complete) but couldn’t you take the City’s budget (minus the school’s cost) and divide by the population to get the answer to #2?
I don’t know the answer to #1 – I wonder if Transwestern (the owners of Pearson Square) would tell you? Does the City even know this answer? This is actually a decent question that I’ve wondered about – how can the City know how many people live here? If my cousin lived in my basement and I didn’t tell anyone (and he didn’t got to the public schools) would anyone know?
The answer to #3 seems complicated – but my understanding is that all of this info is tied into the fiscal model that the EDO uses. If you’re questioning the validity of the fiscal model then I’m not sure what to say… I guess you could contact the company that built it to get info from them. They actually gave a presentation at an EDA meeting last fall where they talked about how accurate the model is. You should have come to that meeting and asked questions!
But anyway, I don’t think you’re approach to the equation is correct. Take a snapshot of the total number of residents in the City (let’s round to 10,000) and the current non-school budget (let’s round to $35M) and say it costs $3,500 per person to run the City. If you add 100 people to the City it doesn’t mean that it will cost another $350,000 to run the City. It might cost $0 more to run the City – which would drop the per person cost to $3,465.35. It’s not a linear thing.
This is why the EDO uses the complex fiscal model. I trust the model and the people at the City who reported that the Pearson Square project nets the City almost $340k/year.
At this point I’m not even sure why we’re debating the issue. If you dig up numbers that show that the project costs the City money I guess that would be interesting to me – but I’m not sure it matters much. I already think the City should do what it can to avoid adding new rental apartments – regardless of the exact impact of Pearson Square.
Maybe this is another one we’ll have to agree to disagree on? I just wanted to clear the air that there’s nothing more I’ve committed to figuring out. I’m content with the info that’s been provided – if you’re not then feel free to dig in some more.
Thanks for that nuanced response Andy! George, I know you are just trying to help. Let me propose this outcome. I challenge you to a debate on this subject. Pick the ground. The Economic Development Authority meeting could be a good place to start.
GEORGE RESPONDS: Councilman Sze (Dan) — Delighted that you’ve begun commenting in the Falls Church Times. We now get regular comments from the majority of City Council members, and it’s become a real public forum. I’ve been debating the City’s unsustainable budget for six months now and definitely feel outnumbered, (but not wrong). I’m not sure the EDA wants to hear me speak, but I would surely like to hear from you and others how you propose to balance the budget, restore the fund balance, and make capital improvements on things like school buildings and City Hall. If there’s a way to do this, it’s a deep, dark secret.