Updates from Letty – October 14, 2022

Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council

Dear Friends,

This week, we cast several votes that move us closer to the completion of Founders Row – we agreed to the final economic development agreement (aka, tax sharing) to bring in Paragon Theaters. The votes, as evident by the 7-0 and 6-0-1 tallies, were less controversial than thought, but I’ll still share my perspective, including the history and some frequently misunderstood points. As this has been publicly discussed many times over the years (even pre-dating my time on City Council in 2016) I’ll also include links to my old posts. And I’ll include the latest status on what’s opening and when. We may not always agree, but as always, I do try to be transparent and thoughtful in how I reach my decision, so I look forward to hearing your thoughts.


What Happened This Week:

Founders Row

For Founders Row, a project 10+ years in the making, hopefully this week was the last time we’d have to cast a vote about it! We voted nearly unanimously: 7-0 on the voluntary concessions changes (allowing smaller number of seats with this new operator, arcade use on the ground floor, improvements to the plaza, etc) and 6-0-1 on an economic development agreement (aka tax sharing) to bring in Paragon Theaters. We heard some concerns about the tax sharing and the use of public dollars to attract/subsidize private business, so I’ll share history and facts that may help your understanding:

  • Pre-2016 – when the city requested that a movie theater serve as the main commercial anchor in the then-Mason Row project, the major terms of the economic incentives were agreed to and modeled after the successful agreement that brought BJs to the city. (My first ever City Council meeting in Jan 2016 was about Mason Row – here’s that blast from the past 2016 post)
  • The city already has a 10% theater tax on the books, but obviously not levied anywhere because we don’t have a movie theater in the city. In 2016, we agreed that in order to attract a theater, we’d share $340K of that theater tax with the developer. In 2016, 2018, and 2022, we had independent consultants assess the financials of the developer and confirm the need for tax incentives in order to make a theater economically viable. See my 2018 post.
  • After the original movie theater, Studio Movie Grill, declared bankruptcy and the movie industry was hit hard during Covid – earlier this spring, we discussed an additional $150K in meals tax revenue from theater meals as part of the agreement to bring in a new replacement theater, Paragon. I wrote about it this past summer 2022.
  • To be clear, the funds are not typical tax revenues, so it does not divert money away from existing city functions or priorities. The taxes are generated by the service – it will be levied on future movie ticket sales and meals at the theater, ie paid by patrons of Paragon, not borne by city taxpayers.
  • The project is still projected to be very fiscally positive – with new net revenues of $1.6M-1.9M per year even with the tax sharing arrangement in place. Economic development projects like Founders Row (and having more options in town that keep spending dollars here) is how we’ve been able to lower the tax rate the past two years even after building a new high school, City Hall, and Library during Covid.

Letty’s thoughts:

This was actually a pretty clear cut vote for me. While I share some concerns about insisting on specific commercial uses in private development projects, that was the project we inherited and set in motion in 2016. Since then, the site was built around a theater anchor and the rest of the commercial leasing strategy was also planned around a theater. Then the pandemic put a pause on all retail leasing for two years and hurt movie theaters which necessitated adding to the incentives. Per staff’s interactions with executives at Paragon, they seem strategic and well positioned to navigate a changing industry.

To me, given the strong positive fiscal benefits of the overall project, the space already built for a theater, the importance of a theater to round out the rest of the commercial leases and to activate the site, and no Plan B theaters waiting in the wings or realistic alternatives for the space, it would be irresponsible for us to not proceed.

What’s Coming Up:

Monday, October 17 – City Council Work Session*

Monday, October 24 – City Council Meeting*

Monday, November 7 – City Council Meeting*

Monday, November 14 – City Council Meeting*

*every Monday (except 5th Mondays and holidays) at 7:30 pm. You can access the agenda and livestream here, including recordings of past meetings