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Potomac Yard Metrorail Station
The City of Alexandria, Virginia, has created both a TIF district and a special assessment district to pay for a new Metrorail transit station. The Potomac Yard station is being constructed on the grounds of a former railroad switching yard. More information about the project is available at https://www.alexandriava.gov/PotomacYard
Metro
Where an infrastructure project is likely to enhance the value of private property, special assessments have sometimes been created so that the benefiting properties pay for some portion of the special benefit that they receive. Special assessments are fees that are added onto the property taxes for designated properties. They are collected as part of the regular property tax process. However, the regular property tax is deposited into the taxing authority's general fund, and the special assessment fee is deposited into an account dedicated to funding the infrastructure project that is conferring a benefit on designated properties.
There are two primary reasons why a special assessment district might be created in combination with a TIF district. First, the special assessment district can provide additional revenues to support an infrastructure project. Second, a "contingent" special assessment district can provide a backstop in case TIF revenues are insufficient. If TIF revenues fall below a specified threshold, this could trigger the implementation of an enacted special assessment. Special assessments are collected only if TIF revenues fail to meet a designated level.
To the extent that revenues from the special assessment district are determined by a formula not subject to future development activity, those revenues are more certain. Thus, even if the special assessment district is never invoked, its mere existence as a backstop reduces the risk for bond holders or lenders and can lead to lower interest rates on TIF financing. In the absence of a contingent special assessment district, jurisdictions could backstop TIF bonds with the "full faith and credit" of their general revenues.
