Bryan McKenzie and Brandon Shulleeta explained the mechanism behind the likely tax benefits of turning Biscuit Run into a state park in yesterday’s Daily Progress. After paying $46M for the 1,200 acre parcel four years ago, owner Hunter Craig is looking to minimize his losses in this wretched housing market (though I have my doubts that it was ever viable to sell 3,100 houses here in that manner), and would surely be looking for a financial benefit in giving it to the Virginia Department of Conservation and Recreation. McKenzie and Shulleeta explain that the idea is to receive tax credits, which can be resold. So if Craig got (say) $46M in tax credits, he could resell those, probably for about eighty cents on the dollar. If I wanted to save $1,000 on my state taxes, I could pay Craig $800 for that $1k tax credit, netting myself $200 in savings. Tax credit transactions are not a matter of public record, so unless Craig chooses to disclose those numbers, we’ll never know precisely what the arrangement is. (Which isn’t to say that we ought to know.) Virginia is moving quickly to close on this deal, and the transaction may happen in the next day or two.
There’s one heartening note in the story. So far we’ve seen county officials lamenting the loss of the $325k in annual property tax revenue from the land, ignoring the $222M price to taxpayers, $134M out of county coffers. (For perspective, the county’s entire annual budget is just over $300M.) Turning Biscuit Run into a park would be great economic news for the county. The first acknowledgement of that fact comes from the county comes in this article:
However, Albemarle Supervisor Kenneth C. Boyd said no longer receiving the $38 million worth of proffers might not be as bad as its sounds, considering that much of what was proffered “offset the expense of the development there.”
“If you don’t have the development, you don’t have the expense,” Boyd said, adding that any future developments that might be done in place of Biscuit Run would likely require proffers as well.
Good for Ken Boyd.