UPDATE: Previous lease amendments were signed by both the Governor of Virginia and the Mayor of the District of Columbia. Presumably, this means that the proposed lease amendment must be signed by Governor McDonnell. MWAA owns “air rights” along the toll/access road which would allow it to build structures over the new Metro stations if the lease amendment is signed. Plans showing MWAA’s proposed development schemes are attached to the Reston Citizens Association letter. The 50 year MWAA lease was extended for 30 years by an amendment dated April 30, 2003. The new expiration date is June 6, 2067. MWAA makes annual inflation-adjusted lease payments to the United States Government. The payment for 2011 was $5.2 million.

Just think what a cargo hub would do to the traffic on the roadways?

Looks like MWAA's stewardship made our local airports less competitive, and now they are looking at sources of income other than more air fare fees. Maybe somebody should have said something when MWAA made the Silver Line a double priced mess, for which MWAA must pay 4.2% of the resulting cost (and we will pay most of the rest). MWAA was already struggling with the cost of its AeroTrain (completed in 2010), and now the Silver Line is more expense.

So, surprise!!! Now we are going to be competing with MWAA, that has hundreds of acres of pristine land, for development dollars. Isn't that just grand. And now we can pay to expand the roads to support a cargo hub to serve that development too. What, ROADS? Yes, roads. Of course, one of these days we are likely to be paying for a government freight rail line there, too. Oh well!

I like this statement Bob: "Now we are going to be competing with MWAA, that has hundreds of acres of pristine land, for development dollars. Isn't that just grand." Incidentally, this FAA Reauthorization Act giving MWAA the power to commercially develop Dulles was signed into law in February of 2012 but MWAA didn't mention this to anyone during the time opting in/opting out of Phase 2 was being debated. Now that Fairfax and Loudon are locked in MWAA suddenly springs this on everyone. My research subsequent to the article indicates that the Secretary of Transportation will sign the lease amendment. Our only hope is to get Governor McDonnell to put the brakes on this and give us time to voice our concerns.

I imagine that this is why Mssrs. Potter, Curto and Davis are still at MWAA, while the rest of the crooks, money wasters and nepotistic bums were shown the door. Priorities are priorities!

Bob, wIth the turnover at MWAA, it makes you wonder who is actually in control over there and is making these types of long-term decisions. The idea of commercially developing Dulles Airport has obviously been considered for years over at MWAA and was only recently allowed due to the clandestine amendment of the FAA Modernization and Reform Act of 2012. Also, who in Congress snuck this provision into this gigantic bill on behalf of MWAA?

One thing to determine is the identities of the groups and individuals who would benefit from this particular little MWAA land deal.

Meanwhile, Mr Potter has been President and Chief Executive Officer of MWAA since June, 2011; Mr. Curto was appointed to the MWAA Board in January, 2011, and has been the Board Chairman since November, 2011; Mr. Davis was appointed to the MWAA Board in November, 2010, and has been the Board Vice Chairman since April, 2011.

These guys were not schoolkids, and they did not just get appointed or hired to the MWAA board yesterday. All three of these guys should have been removed from MWAA along with the others that were shown the door. But all they got was a few minutes of embarrassment in front of a Congressional Committee in November 2012.

Here is a nice summary of important points from the November 16, 2012 Congressional hearing.
http://youtu.be/25nTDQvy5F4

Despite that, for some mysterious reason they were spared, and they retained their high positions.

Given their high positions at MWAA, something tells me that these three had, and still have, a great deal of influence over what the Board sees, considers, and decides. As for the Congressional games, one may not need to look much further than their Congressional oversight committee. They looked Very Stern at the hearing, but they have done NOTHING.

Thanks for that information Bob. It is very helpful. But please note that Potter, Curto, and Davis have only been in MWAA since 2011. As near as I can tell, the plans for commercial development were in the works prior to their involvement in MWAA. This situation sort of reminds me of our State Department where administrations come and go but the State Department insiders still control American foreign policy to a great extent. Either that or it's the ghost in the machine effect where a plan was set in motion and continues to operate almost independently of the people putatively in charge of MWAA.

Wow, plans for commercial development on airport property were in the works prior to 2011? I guess that since the Rt 606 station is on Airport property, that makes sense.

But who decided to put that rail station on airport property in the first place, given that one of the selling points for the rail line was the very value improvements that would happen at the station locations? Apparently that decision came from MWAA, because in early 2010, there was a push to move the Rt 606 station some distance to the west, in order to align it with commercial properties there.

Rt. 606 Rail Station Location To Stay Put
Leesburg Today, March 18, 2010
http://www.leesburgtoday.com/news/loudouncounty/article_372a10e1-5ebd-52db-8dae-8e0913d7b98c.html

In this article, it was reported that Loudoun County Superevisor Stevens Miller said that MWAA told Loudoun County that they wanted their input on station locations - but that if they wanted to move the Rt 606 station further west, it would cost more money. Maybe certain Loudoun County Supervisors should have taken a longer view than they did.

It may be that some staff members at MWAA were working on this without the knowledge or approval of the MWAA Board or Officers. In that case, it would be useful to see which MWAA staff members might have power over these things, and follow any connections, gifts or perks, etc, they might have had with, or received from, contractors or businesses that would benefit from the land deal.

I know nothing about the station locations. I do know that the powers that be at MWAA have been trying to fix this lease problem since at least 2010. I have now attached to the article a February 2011 Dulles Corridor Committee report that was written in response to questions raised in April 2010 about constructing MWAA-owned buildings above the Metro stations. Please note the memo specifically mentions Herndon as a possible MWAA competitor in the commercial real estate business and notes that "[i]n order for the [Dulles Airport Access Highway] (and the air above it) to be occupied by private commercial office or retail uses, the federal statute that authorizes federal property to be leased to the Airports Authority would need to be appropriately amended; thereafter, the lease would need to be amended to reflect the statutory amendment."

WOW! People should read MWAA's Lease Amendment. (It's the leftmost document at the beginnng of this article.)

Looking at 'Amendment 4' in the MWAA Proposed Lease Amendment, it appears that MWAA is up to its same old tricks. "Oh - so you want us to establish appropriate policies such as ethics and contracting standards. How rude of you! Well, we'll consider doing it over the course of 12 months - after WE decide who should get these Dulles Rail / Silver Line contracts, like the Rt 28 Metrorail station that we estimated at 2.4 times what it should cost, and the parking garages that we estimated at two times what they should cost. Yeah, after we do that (the same way we have always done things like that, heh heh), THEN maybe we will bother to copy some standard boilerplate contracting and ethics rules into a document, and approve it. Heck, they might even be good rules! Who knows. Oh by the way, we are certainly not going to start the 12 month time allotment to compose those rules until you sign off on our highly lucrative lease modification that allows us to operate as a big business, and compete with our foolish 'partners' in Fairfax and Loudoun Counties. Why should we?"

Excuse me, but MWAA is just a bit much. Get Potter, Curto and Davis OUT of there, NOW!

I missed that one Bob. It didn't occur to me MWAA could award all the construction contracts prior to the new procurement and contracting policies going into place.

I read that the Phase 2 contracts were broken up into three 'packages'. The first 'package' of contracts is supposed to be approved by May 2013. This package includes the 2.4 priced Rt 28 rail station that Fairfax County taxpayers are supposed to pay for. There are two more packages - I don't know their release and approval dates, but the final package will apparently be the double priced Phase 2 parking garages that Fairfax and Loudoun Counties are supposed to pay for.

So look for quick contract turnarounds and approvals, most likely followed by the cleverly delayed contracting and ethics rules.

However, it is possible that the ethics and contracting rules may be another MWAA smokescreen. Even if we make MWAA contract with the necessary meetings and agreements, they have long since telegraphed complete willingness to pay double prices (and higher!), so contractor bids will surely reflect that. So, we will probably be paying the double and double-plus prices (plus finance charges), even if MWAA operatives don't get those blatant gifts and trips and game tickets and so forth. The payback in cases like this are revolving door rewards, (those inappropriate cushy jobs, like a horse show judge guy getting a high level job at FEMA, etc), and maybe lucrative speaking engagements, investment 'tips', profitable and easy contracts steered to relatives and friends, hidden college tuitions for family members, posh club memberships, etc. Very hard to track and prove.

MWAA's proposed "Amendment 4" to its airport lease agreement can be found on the MWAA website:
http://www.mwaa.com/file/Res_12-38_-_Approving_Amendment_to_Lease_Agreement_Between_the_United_States_of_American_and_the_Metropolitan_Washington_Airports_Authority.pdf

Relevant quote 1:

Resolution No. 12-38
MWAA December 12, 2013
(As of Feb 24, 2013, not yet signed by US DOT)

Page 2 of 4 (page 4 of the pdf):
"WHEREAS, the Secretary and the Airports Authority are committed to strengthening the content and oversight of the Airports Authority’s internal policies and procedures, and the Secretary and the Airports Authority wish to modify the Lease to clarify the provisions related to Airports Authority policies and procedures and to make other conforming changes to the Lease;"

(continued)

Dave, the MWAA Board was flushed out in recent years, but there are a few Officers there, some of whom have been around MWAA for a long time.

Mr. Potter has been President and Chief Executive Officer since June, 2011, which is relatively recent.

But Margaret McKeough has been Executive Vice President and Chief Operating Officer since March, 2004, and Quince T. Brinkley has been Vice President and Secretary since July, 2008.

Maybe somebody can ask them who might be arranging things like the commercial use rule changes, the choice to place the Rt 606 station on airport property, etc.

More background on the RT 606 station location:

Still No Decision On Rt. 606 Station
Leesburg Today, March 3, 2010
http://www.leesburgtoday.com/news/loudouncounty/article_8015b845-eab9-5ba4-995e-63e21d7c3614.html

In this article, H. Chris Antigone of Dulles Gateway Associates referenced a 2005 study that advised positioning the Rt 606 station more northwest, "CLOSER TO PRIVATE LAND WHERE PRIVATE DEVELOPMENT COULD OCCUR." [Emphasis added.] Antigone was quoted saying that the planned location had been in a better location at one time, but then it was changed to the present one, and that the reason for that change was not known. Antigone said that he sent a letter to the Loudoun County BOS about the 2005 study so I'll see if I can find that.

Also in this article, MWAA representatives were quoted saying that it was still possible to make a location change, and the Loudoun BOS decision for the station location could be made as late as their second meeting in April 2010, but after that it would involve costly delays.

The Loudoun County rail tax districts are related to this mystery.

Loudoun May Pitch Tax District to Pay for Rail
Consultant to Help Craft Proposal to Present to Board of Supervisors
loudouni.com, June 7, 2010
By Jason Jacks
(Article was originally located here, but loudini.com is gone now.)
http://www.loudouni.com/news/2010-06-04/loudoun-may-pitch-tax-district-pay-rail#comment-4204

In this article, nearby landowners H. Chris Antigone of Dulles Gateway Associates, and Eric Wells, CEO of WestDulles Properties, were quoted as being surprised to learn of a rail tax district. Other nearby landowners were reported not to have responded to emailed questions about that. However, Loudoun BOS Chairman Scott York said that the BOS would be exploring all options, including a tax district. Loudoun’s Deputy CFO Ben Mays was quoted saying the taxing options would be limited until business developed around the Rt 606 and Rt 772 stations. And the article said that a consultant was preparing a report for the LC BOS. So people had to have been looking closely at the Rt 606 location issue at that time.

But then, Loudoun County's rail tax districts completely vanished from all discussion for two years, not to reappear until just before Loudoun County's final Phase 2 decision on July 3, 2012.

Given the situation that Loudoun County faces now because of MWAA's development plans, one really has to wonder about that. Was it just a pro-rail agenda, or was it worse than that?

Speaking of the tax districts, if I were one of the landowners in Loudon and Fairfax paying the special tax, I wouldn't appreciate MWAA coming in here and stealing potential commercial customers away to its tax-free property. Also, where is the Fairfax County Board of Supervisors in all this? Do they even know what is going on?
PS My article states the definition of "Aviation Purposes" was changed. It should have read "Airport Purposes."

Looking at a Google map, it seems to me that the land at the north end of Dulles Airport, containing the WMATA rail yard that is planned there, and the Metrorail station and the Metro parking garage that are planned there, and the commercial zone that is being contemplated around the generally south side of the intersection of the Dulles Greenway and Old Ox Road, should be ceded to Loudoun County, and taxed and maintained by Loudoun County. The Airports Authority has shown itself to be incompetent and unworthy to manage the Dulles Rail / Silver Line Metrorail project, and I do not think it should be managing this commercial zone either.

The property was condemned and taken for an average of $500 per acre around 1960; it should be ceded and returned to Loudoun County at a comparable price now, allowing for land value inflation since 1960.

There will be limits to the height of anything that can be built on that land, because it is about a mile and a half north of the northern end of the Dulles Airport runways. This will also make it a very noisy place. But, it is generally unimproved, open land, ideal for development, it is at a limited access road ramp and a future Metrorail station. It will be worth the price to Loudoun County, I think, and the collection of Loudoun County business, rail district and general land taxation there will make the arrangement more fair to surrounding municipalities.

Loudoun Opt Out was aware of this MWAA land development scheme and let the Loudoun Board of Supervisors know about it well in advance of their vote. Chairman Scott York denied there was anything in the works, but the developers claim to have been working with county staff on these plans for years. Sen. Black introduced legislation to place a legislative check on Gov. McDonnell's approval of the amendment, but it was killed in committee. http://lis.virginia.gov/cgi-bin/legp604.exe?131+sum+SB1362

How could Chairman Scott deny anything was in the works after the FAA Act had been signed in Feb. 2012 giving MWAA the power to commercially develop Dulles? Sen. Black's bill may have gone too far. The Governor would not allow his discretion to be encumbered by having lease amendments subject to General Assembly approval. I would hope the Governor would impose conditions based upon his own initiative given that the Commonwealth of Virginia has exempted MWAA from taxes. That gives the citizens of Virginia the right to say that any commercial development will have conditions attached to it. The Federal law can't mandate that Virginia sign the lease amendment as is.

Is there anyway that MWAA and the Dulles airport tax free status can be overturned or amended so that any new business that opens on airport property that has no direct effect on flights could be taxed by Loudoun County? Dave or Bob help me out here

Joe,

First of all the Virginia code would have to be amended by the General Assembly. Va. Code Sec. 5.1-172. Exemption from Taxation states that MWAA "shall not be required to pay any taxes or assessments upon the airports or any property acquired or used by the Authority under the provisions of this act or upon the income therefrom." With regard to Business Professional and Occupational License taxes, as well as zoning regulation, I don't think those would apply to MWAA absent the approval of the Federal government which actually owns the property and is just leasing it to MWAA. I have been told several times now that MWAA would have to pay some type of payment in lieu of Fairfax and Loudoun County property taxes on leasehold improvements but no one has shown me any code sections or any other proof that MWAA is subject to county taxes.

Thanks Dave, I'll read the code. If I can find anything about the amending of it I will e-mail Wolf, Kaine and Warner. Fat chance i know but got to keep trying. Wouldn't it be sweet if Virginia could buy the land from the feds then the BOS could start telling Jack Potter to take it or leave it like he did with the Silver Line negoations!

Joe,

Thanks. On the state level, any action has to come from Governor McDonnell and our representatives in the General Assembly. On the Federal level, there is one additional thing that can be done which is to suggest Messrs. Wolf, Kaine and Warner that regulations be promulgated to implement the new provisions of FAA Modernization and Reform Act of 2012. As noted above, the definition of “Airport Purposes” was amended to include use “for a business or activity not inconsistent with the needs of aviation that has been approved by the Secretary [of Transportation].” No Federal act should give the Secretary of Transportation such wide lattitude without some type of guidelines as to what is or is not "inconsistent with the needs of aviation." That language is ripe for abuse if the Secretary is essentially free to interpret it any way he or she wants.

Certainly our government and its managing agencies such as MWAA should not be in the commercial real estate business. The land should be returned fairly to private ownership.

I think that any Airport property that is contemplated for use as commercial land, should be ceded to its original owners, their successors and heirs, if such can be found, as private land in Loudoun or Fairfax County as appropriate according to its exact location, at a per-acre price equivalent to the average $500 per acre that was paid when it was taken around 1960, allowing for the increase in the value of unimproved land, with appropriate allowance for improvements such as homes, barns, etc, that its owners might have had on the land when it was taken, all of this at present rates equivalent to its zoning and use when it as taken around 1960. If such original owners, successors and heirs can not be found, or do not wish to repurchase the land, then the property can be auctioned at rates appropriate to their commercial value today, as private land in Loudoun or Fairfax County as appropriate according to its exact location. The ceded land would then be governed and taxed according to the laws of Loudoun and Fairfax Counties, with any additional regulations appropriate to its proximity to an airport and its runways, etc.

Clearly something must be done. In a time of sequestration cuts decimating businesses across Northern Virginia we can't have a tax-exempt quasi-federal entity stealing from Fairfax and Loudoun County what little commercial business remains.

Dave, Bob I hope you do not mind if I paraphrase part of your comments and send them to the Gov, Senator Kaine and Warner.

I don't mind.

Fine with me. I hope they do the right thing. But I don't think they will... I think you had better put some serious political pressure on these guys, or they'll flim-flam you in a hot second..

Kaine is the one who gave MWAA the Dulles Toll Road, and helped get this disaster started in the first place, and Warner was brought in to support the Rail project back when it almost got scuttled.

Governor McDonnell made some noises, but in the end he said NOTHING about the excessive prices that are very visible in this rail project, particularly the 2.4X price estimate for the Rt 28 station, and the 2X price estimate for the five Phase 2 parking garages.

In my opinion, all three of these guys will be perfectly happy with MWAA ripping this region off, as long as it benefits them and their parties. And I think MWAA knows this, and has a trick 'solution' planned. And although that 'solution' will fool enough people long enough to get approved, ultimately it won't make Northern Virginia very happy at all.

Thanks.
That's a lot of property sitting vacant and not providing tax revenue.
I did send letters and received the usual canned response but will endeaver to perservere. Where is Minchew and his eminent domain buddies or is that just for the so-called little people that he breaks out eminent domain?
Bob you seem to be good with numbers so please correct me if I make a mistake here. Say there is 550 acres at the airport at a value of 100k per acre equals 1,235 dollars a year per acre, times 550 acres that's 6792,50 dollars per year per acre, over 50 years that's 33,962,500 dollars laying fallow because it's federal property leased by the MWAA.

People should BEWARE. Businesses and developers are going to be playing every game to push for gold-rush level development on the airport land under MWAA. Money doesn't talk - it swears.

Loudoun County bought a 101.3-acre parcel in Ashburn for $13.5 million in 2004, and sold 75.4 acres of it in 2012 for $20 million. $20 million for 75.4 acres is $265,252 an acre for unimproved land. So unimproved land around there might sell for about $265,000 per acre.

If such land is developed and close to an active Metrorail station, its value will be much higher, and of course tax assessment will be higher. I saw a tax estimate for this property of $200,000 a year just as vacant land - for 75.4 acres, that's about $2,652 tax per acre every year, for unimproved land - and I saw a tax estimate for this property of $16 million a year (for 75.4 acres, that's $212,202 tax per acre every year) once it is in operation.

I think that much of the higher tax figure would be state and federal tax, so I am not certain how much of that figure the Counties will receive, and I also read that this particular land was gerrymandered out of the rail tax district at the last minute. Still, this example shows how much money Loudoun and Fairfax Counties stand to lose if such properties are instead leased on federal land by MWAA, in unfair competitive conditions.

Joe,

This week I am sending letters to Governor McDonnell, Senators Kaine and Warner and Congressmen Wolf and Connolly. If MWAA wants to be a commercial developer, it should be subject to the same regulations and laws that other commercial developers are, i.e. no unfair advantages! It's too bad the Loudoun County and Fairfax County Board of Supervisors are asleep at the switch on this issue. I can only presume that the various members of these boards don't have any business experience and don't realize how having tax-exempt status and being exempt from zoning regulations would confer an advantage on any entity wanting to commercially develop land.

Unless you know that they have no business experience I would leave that part out Dave. Helping with the facts and the reminder of said is the way to go. I think the people are the ones who are asleep or do not have any business experience otherwise that be raising their voice and sending e-mails. I did get a reply from senator but it was his canned talking points mostly about the sequester. Good Luck!

Politicians just want to get their hands on this money for their parties. They may push MWAA out of the way, but the money will still be stolen from the Counties if it benefits the parties. Loudoun County will suffer the worst - but its so-called 'leaders' will do just fine, for some mysterious reason. The news media will of course talk about jobs. Any questions about double prices will of course be met with the usual 'whistle and look the other way' response that we always see.

Watch for gold-rush overdevelopment, followed by lackluster business, followed by our so-called 'leaders' saying "Ohhhh, ain't it awful! Who could have FORESEEN this?" - and the news media will just be reporting the Metro breakdowns.

That's not entertainment reading there Bob. Carte Blanche is what it could be, scary.
Dave if you get any replys please lets us know here or on the LTM or Leesburg today?

Mr. Webster I did get a call from Amanda at Tim Kaines office today. She said they were looking into the airport competition involving private enterprise.

Joe,

Great job! I only have received form responses. Certainly no calls. Thanks for the update.

202-224-0048 is Amandas number.
Metro Garage Proposals Head for Hearing on the Leesburg today has this at the bottom of the piece-
Federal legislation has granted MWAA the ability to build non-aviation uses on its property, by teaming with a developer to lease the property for taxable development.
That puts a different spin on the issue. Would it be that the taxes are paid to the localities or the Federal government?

The statement in the article is misleading. The businesses themselves would pay the normal income and business license taxes but MWAA itself is still tax exempt under state and Federal law. Everything I said in my Connection article remains true:

"MWAA is tax-exempt under both Virginia and federal law and thus can unfairly compete with private landowners. MWAA does not pay state or federal income taxes, county business license taxes, or county real estate taxes. Any businesses that locate on the Dulles Airport property won’t be part of a special Phase II tax district and won’t pay a dime toward defraying the cost of building the Metro Silver Line. As if that isn’t enough, MWAA is not subject to county zoning laws and has no incentive to offer “proffers” which are voluntary agreements by a landowner to go above and beyond what zoning laws require, e.g. planting additional trees in a development."

http://www.connectionnewspapers.com/news/2013/mar/26/letterairport-authority-gets-business/

Sean Connaughton from the Govenors office sent me a reply that it is a federal issue and that there is nothing that the state can do about the taxes on the property.

He is wrong on two fronts. Whether he knows he is wrong is a different story. First, Virginia granted MWAA exemption from STATE income taxes. We can take that exemption away now that MWAA has decided to become a commercial venture rather than merely running an airport. Two, Virginia could attach conditions to the MWAA lease amendment if we wanted to. Virginia governors must sign, and have signed, every amendment to MWAA's lease with the Federal government.

Letter content
Governor McDonnell asked that I respond on his behalf.
Washington Dulles international Airport was designed and property for it was complied in the late 50's by the federal government. Therefore, it falls under the purview of the federal government.As such, stipulations regarding eminent domain, airport grant-in-aid assurances, land leases, and similar legal instruments dating back to the original compilation of property are governed by federal law and subordinate rules and regulations.
Consequently, although your premise may have merit, we are at this point not able to affect and change that would alter an outcome pertaining to your opinion on possible property use at this facility
Sean
CC Burdette

Thanks. I will send my own letter to Sean Connaughton informing him of his erroneous analysis and see what he says.

Let's see what he says.

Mr. Connaughton,

An acquaintance of mine forwarded a response from you to the effect that Virginia can do nothing about the Metropolitan Washington Airport Authority's intended use of Dulles Airport for commercial use.

As you know, the Federal government authorized the use of Dulles Airport for commercial use in February of 2012. This Federal act, however, merely allowed for MWAA's lease to be amended.

The original MWAA lease and all lease amendments must be, and have been, signed by Virginia governors. Please take a look at the original MWAA lease and subsequent three lease amendments, all signed by Virginia governors. The source for Virginia's rights with regard to the MWAA lease comes from Va. Code § 5.1-154. Acquisition of airports; approval. This code section states that the "Metropolitan Washington Airports Authority created by this act is hereby authorized . . . to acquire from the United States of America, by lease or otherwise, the two airports known as Ronald Reagan Washington National Airport and Washington Dulles International Airport . . . , but only with the approval of the Governor of Virginia."

Therefore, Virginia has a right to object to the proposed commercial use as a constituent member of MWAA. In other words, we don't have to go along with the lease amendment or could attach conditions to it.

Also please note that Virginia independently granted a state income tax exemption to MWAA pursuant to Va. Code § 5.1-172. Virginia can take away this exemption from state income tax now that MWAA has decided to become a for-profit commercial entity rather than a mere steward of Dulles Airport.

I look forward to your response.

Good Deal, maybe a carbon copy to Randall Burdette---director@doav.virginia.gov