39°Mostly Cloudy

Treasurer: RA Would Be Wise To Consider Paying Off Lake House Loan ASAP

by Dave Emke September 15, 2017 at 2:45 pm 106 Comments

(This article was updated at 6 p.m. to clarify information about interest payments on the loan.)

Speaking to members during a community budget meeting Thursday night, Reston Association’s treasurer made the argument for why the $2.4 million that remains on the Lake House loan should be paid as soon as possible.

Sridhar Ganesan explained to the small crowd at Reston Association headquarters that excess money is available in RA’s operating reserves that may be best used by taking care of the loan once and for all.

“I think the risk is pretty low [and] from a cash-flow perspective, I’m pretty comfortable [paying the loan off],” he said.

If the loan continues to be paid off through 2025, as is currently scheduled, Reston Association will be making payments of about $182,000 each year. In addition, there will be a $1.57 million balloon payment due at the end of the payments. Ganesan said interest rates are likely to increase between now and then as well, and refinancing costs would apply if RA decides to go that route.

Ganesan said that as Reston Association’s operating reserves have never fallen below $4 million — and peak at around $12 million each year as assessments are collected — funds are available to be taken from the account and used to pay off the loan now. Ganesan said interest on the loan collects at about $80,000 per year, while the idle operating reserves only gain about $59,000 in 2016.

Monthly operating spending for RA is about $1.25 million, Ganesan said.

“So the question is, what do we do? … Should we use that [reserve] money, that idle money, to pay off the loan?” Ganesan asked. “This is a question that we need to address, and we’d love to get comments from the public as well.”

Paying off the loan would result in RA’s projected 2018 member assessment rate decreasing by $8.66 per household, Ganesan said, and future assessment rates would benefit from having the loan off the books. The 2018 assessment was projected in the budget’s first draft at $678.

“It [would be] a use of money to pay back the members for the next 10 years,” he said.

Ganesan was asked whether he would have suggested paying for the Lake House property in full from reserve funding at the time of acquisition rather than borrowing the money. He said, if he were comfortable with the investment and the price was right, that “absolutely” would have been his suggestion.

The Lake House is projected to bring in about $143,000 in 2017, well below the $300,000 estimate that was in the budget. Ganesan said its budget projection for 2018 is $230,000 — with about $340,000 in expenses. He said RA is considering changing the way the Lake House operates in order to begin closing that gap, including possible expansion of operating hours and changing to an all-rental model (as opposed to offering programming there).

“Rentals tend to fetch a lot more money than programming,” he said. “So, should we just go to an all-rental model … in order to make sure we make as much money as we can, in order to make sure we get a payback from the investment?”

No decisions on the budget have yet been made.

The RA Board will have a special budget meeting, open to the public, Monday from noon-5 p.m. Members will also have an opportunity to discuss the budget with the Board of Directors at the Oct. 15 Lake House open house. Public hearings on the final draft of the budget will take place Oct. 26 and Oct. 30, and it is due to be finalized at the Board’s Nov. 16 meeting.

Thursday’s community meeting was recorded by Reston Association staff and will be made available on its YouTube channel soon.

  • Donald

    Would love to hear Mr. Higgins’ response to Mr. Ganesan’s idea. ‘…excess money is available in RA’s operating reserves…” Really? All this to save me the cost of a pizza? What about critical projects that still need to be funded?

    Donald

    • Mike M

      Examples of “critical” projects?

      • Donald

        Lakes, dams, pool infrastructure, keeping pools open, keeping primary gateways into Reston looking at least halfway decent (Ashburn is looking nicer these days), pathways, lighting, drainage, planning and zoning representation. To name a few off the top of my head.

        Donald

        • Conservative Senior

          Be our guest.

          • Donald

            I may be myopic, selfish and shortsighted, but, I take my home value seriously. It’s value depends on me taking care of it, my neighbors taking care of theirs, and RA’s ability to provide the amenities, open spaces, beauty, and appearance it so depends upon.

            Donald

        • Greg

          Good luck with that $1000 — and don’t forget that your beloved RA and its DRB approved the eyesore with the lopsided Lincoln Logs stuck asunder on it. Along one of the major gateways into Reston.

          The RA also can’t keep the weeds alive in the tiny garden on the other side of the toll road / gateway. We have a pile of dessicated dirt there now.

        • Mike M

          I agree on Ashburn. I do wonder about their ability to maintain.

    • John Higgins

      Thanks for the invitation, but I think I will sit out this discussion. Despite my being a pain in the arse about this for several years, the RA still has not created an Operating Reserve or clearly identified how much cash is “surplus”. The Fiscal Committee declared two years ago that there was $1.5 million (perhaps as much as $2 million) surplus and supported that with numbers. The RA board spent $1 million of that. The next year, they found use for the other $0.5 million. Current thinking appears to be that RA does not need an Operating Reserve so almost all cash on hand on Dec 31 is surplus. That’s a discussion worth having.

      I would urge the board to subject the loan payoff proposal to critical analysis. The assumption that we will not earn as much as we pay out in interest needs a close look. Someone needs to do some math…about 45 percent of the RA’s loan payments in the third year of the loan go to principal. Using one asset to acquire another (equity) is not a savings.

      Here’s a radical idea. If it is shown that there is $2.4 million in surplus cash, put it in a “Debt Service Reserve”. Loan payments can be made from the reserve without pulling on assessment revenue (i.e., the board can lower assessments.) When the balloon payment is due in seven years, there will be sufficient funds to pay it off and throughout this period the RA will have a cushion if extraordinary needs arise. Along the way, someone might ask why some $5 million of long-term, unneeded cash (this includes $2.5 million of capital reserves declared untouchable) is held in short-term, lowest yield investments.

      • Donald

        What a frightening thought!
        “Current thinking appears to be that RA does not need an Operating Reserve so almost all cash on hand on Dec 31 is surplus. That’s a discussion worth having” My god, please don’t let that be the board’s view.

        Mr. Higgins, I know you were once the Treasurer. Would you consider taking these thoughts to the RA Fiscal Committee? The “Debt Service Reserve” has merit in my opinion. And I agree, this is not the forum to hash it out. I just hope you will run with it to their Committee.

        Thank you for your dedicated service to the community.

        Donald

        • Reston2000

          Donald – this is not true – if you were at any of the recent meetings regarding the budget you would have heard that they have both an operating reserve (to cover variances in their operating budget) and a capital reserve as well. The discussion centered around the appropriate levels of reserve to keep. This misinformation is what is frightening! RA’s CFO is keeping everyone informed of trends in cash flow – for example, he said that some people pay their 2017 assessments right away at the end of 2016, so while it looks like you have excess cash at the end of 2016, it’s really revenue that is designated to support the following year’s budget. The discussion of paying off the loan was discussed, and it appears that we would save a lot of money (something to the tune of $750,000 in interest) if we paid off the loan with reserves – that makes sense to me – the discussion centered around safe levels of reserves – what SHOULD we keep in reserves, NOT whether we should have reserves or not…aye yi yi this #fakenews

          • Donald

            I’m sorry. I have been there. It’s not what I’m hearing, and it’s not how I’m deciphering the numbers presented. You tell me where this new surplus is coming from.

          • Reston2000

            What is it that you are hearing? I am hearing the same thing that was reported in this column: “Ganesan said that as Reston Association’s operating reserves have never fallen below $4 million — and peak at around $12 million each year as assessments are collected — funds are available to be taken from the account and used to pay off the loan now.”

          • Donald

            The Reston Association has no thing called an “operating reserve” — open your ears man. Should RA have one — yes –, with defined usage terms. I doubt this board would know how to do that.

            Ganesan needs to brush up on his finance and really, really, really read the Deed and Governing Documents.

            Donald

          • Reston2000

            Whatever you want to call it, bottom line is that RA has $4 million in the bank and can pay off the loan –

          • Donald

            Really??

          • Reston2000

            Do you have evidence otherwise? Or reason to question? If you do, I would be interested to hear.

          • John Higgins

            I will be happy to provide a simple analysis of RA’s cash position, but this is not the place to do that. Send me an email (create a surrogate gmail account if you wish) and I will respond. [email protected]

          • Reston2000

            I just had simple question – are folks disputing the fact that RA keeps $4 million in the bank? Because if they are questioning THAT then that’s more about questioning the integrity of what the staff and officers are saying..and that is a whole different issue…just curious if that is what you are all questioning?

          • Donald

            Mr Higgins is in a better position as he has the background and was RA’s longest running Treasurer. But, simply, Ganesan uses the term Operating Reserve — and there is no such thing.

            To use the Reserve Fund (now known as the RRRF) would be possible, but not recommended, as the fund is already tied specifically to expenditures for Capital Repairs & Replacement. In addition it has a specific method for being funded and managed — see:
            Assessment & Finance Resolution 3;
            Repair & Replacement Reserve Fund.

            Where Ganesan is finding a $4 million surplus is beyond me. If he claims the RA Operating Fund (for Operating Expenses) has a surplus of that much — we have a much bigger problem as I want my money back.

            Donald

          • Jill Gallagher

            I am reading this and I am not sure where these numbers that you are using are coming from. They are not meshing with the documents provided by the CFO at a recent fiscal committee meeting where he reviewed the operating fund balance from 2015 – 2017 (see below) and in no month do I see the balance falling below $4 million. He said that they keep this operating “buffer” for just in case (which makes sense, because as John says above, this is a large organization.) These numbers have been provided by the CFO and I have seen nothing to dispute these numbers. In addition, I am very confident that Sridhar (our Treasurer) also reviewed/verified these numbers before his presentation on the proposal last week. I am having a hard time understanding what you are questioning – that we have a $4 million “buffer”? That the CFO and Treasurer are reading the numbers right? Are you thinking that there’s not as much there as they think and paying off the loan will leave us too low? I just am trying to understand what you are questioning? https://uploads.disquscdn.com/images/3aaa278385fc637fd622d31dcb0d67e911b3f53413a1eb0db1eb614b62d9af8f.jpg

          • Donald

            Jill,

            To keep it simple as you suggest, they are robbing Peter to pay Paul.

            Donald

          • Jill Gallagher

            Agreed and while they have a process in place for assessing capital costs, Lord knows that life cycle costs are difficult to plan and even more difficult to fully fund. If you think they should put more in the capital reserve(s), then tell the Board. I find it very hard to watch multi-million high-rises go up in our town, and very little gets contributed to RA to help maintain the spaces that all these people will use. There’s your capital reserve.

          • Donald

            Unfortunately the majority of those high rises are not in the PRC, hence not a part of the RA. It is “suggested” via the Comprehensive Plan they join either the RA or the RTCA. We’ll see how that goes.

            Donald

          • Jill Gallagher

            Also, I think this thread is not helping people understand the critical issues. You are getting into such detail about the terminology. What is important for people to know is that RA keeps money in the bank; some think that it makes sense to use some of that money to pay off the Lake House loan, that it will save us quite a bit of money (I agree with them). Some people think we keep too much in a reserve or “buffer” (maybe you Donald?) or that if we pay off the loan we won’t have enough in the “buffer” (like John)…I felt compelled to say that I went to a recent fiscal committee meeting (which are open to the public) and heard about the pay-down options. One option is to stay the course and keep paying what we are paying now (almost $15K in mortgage payments a month!!); pay part of the loan but not all of it, which saves some, but still leaves us with a balloon payment in 2025; or pay the whole thing now, which saves us about $500,000 in interest payments. That last option makes sense to me. But I am just one member and one opinion, but the pay-off makes sense to me.

          • Jill Gallagher

            Here is the hand-out on the options – I like option 3 – total loan payoff – $500,000 savings – that makes sense to me https://uploads.disquscdn.com/images/7da8e149dc54f160ce0f46b6f76eee21cc8d308d677a83e109fdf817dff64394.jpg

          • Donald

            Go to:
            “Current funding projections adequate for the next eighteen years.”
            “Existing Funding Levels”

            There is an IRMA in our future.

            https://www.reston.org/portals/3/Inside%20RA/Reston%20Association%20Governance/Finances/Reserve%20Study.pdf

            Donald

          • Jill Gallagher

            It is discussions like this that got us in trouble with the Lake House – no one understood the finances, and here you are – doing the same thing again, talking in circles, using financial terminology that every-day members cannot follow. Keep it simple – RA has cash in the bank for “just in case”, RA has a capital reserve fund(s) to fix up our properties on a scheduled basis. They are NOT proposing to tap into the capital reserve fund for this payoff. They are proposing to tap into our cash on-hand to pay off the loan. It will not wipe us out, it is low-risk and will save us a good chunk of money. I am really dismayed by this thread – surely you guys know a lot about Reston finances, yet are flipping casually between the funds and the terms without saying the crucial point – which is that they want to use the cash in the bank to pay off the loan, NOT our capital reserve that keeps our properties maintained and up to date. Folks have also ignored the other critical point which is that there was a discussion of rebuilding the operating reserve or buffer or whatever you want to call it, with targeted cuts to the budget – another good thing! Instead, you are pointing people toward the capital reserve, and directing them in the link below to a capital assessment from 2010. That is not what we are talking about with this. It feels like you are trying to confuse people. Stick with the basics – RA is using its “buffer” of cash on hand to pay off this loan and save members money. It is not using the capital reserve, which is already designated to specific projects and upgrades as planned. I just read that they approved it, so hopefully this conversation will go away – jeesh!

          • Donald

            OK, I’m glad you have a handle on it Jill.

            I assume you mean Repair and Replacement Reserve Fund. And you state we’re not going to take anything out of it. Great, glad you believe that.

            And as I shared earlier… go to slide 16 of the attached.

            See what happens about 16 years out. Then go to slide 18. Alternative number 3 is looking more and more foreseeable:

            “Retain current funding levels, but plan on a special assessment or other infusion of about $20 million in 16 years.”

            Let’s just keep putting it off. No long-term planning to see here.

            https://www.reston.org/portals/3/Inside%20RA/Reston%20Association%20Governance/Finances/Reserve%20Study.pdf

            Donald

          • Jill Gallagher

            You seem to understand the financials. You say you go to the meetings. Yet you come out and post something completely different than what they said at the meeting. I, myself. Am trying to understand what they’re doing and you are saying something in this public post that is completely different than what the CFO and the Treasurer said in public meetings and I’m trying to figure out where you are getting your information from? If you know something that the rest of us should know then can you please back your statements up with minutes from a meeting or an email from the Treasurer saying what you are saying or something substantive? I’m open to hearing what you are dishing but ive not heard anyone else pitch this angle (“robbing peter to pay paul,” or shorting our capital reserve) – I just haven’t seen any evidence of that – if I’m missing something, please share what you’ve got!

          • Greg

            Very well said. This is not rocket science, and yet we have these pompous back-seat drivers confusing even themselves.

          • guest

            Donald, How about you speak up at RA meetings, or better yet put in your name for the vacant board seat? If you want to approach Looney, do it. No one is stopping you. What are your innovative solutions?

            Also, wasn’t Mr. Higgins the treasurer during the purchase of the Lake House?? Why don’t you ask him how he advised on that purchase? Where was your op-ed from that time, Donald? I must have missed it.

          • Donald

            No, Mr. Higgins was not Treasurer at the time.

            But, not to embarrass him, his subject matter expertise, knowledge and experience with the RA is rare. He spent nearly 20 years with the Reston Association as its Treasurer, a Board Member and member of the Fiscal Committee. He has worked with a number of the boards and all the infamous personalities, and been involved in a number of budget cycles.

            His OpEds should be listened to.

            Donald

          • guest
          • Donald

            Again, it’s not my intent to speak for Mr. Higgins.

            But I believe he was off the board by April, 2015. I also understand he was deeply involved with the MediaWorld efforts of Mr Ganesan and others, to investigate the transaction.

            I don’t always agree with Mr. Higgins, but I do respect his knowledge, experience and dedication to the Community over the last 20 years.

            “nuff said

            Donald

          • guest

            Donald,

            The contract was signed in March 2014, during his term. Where was he and the fiscal committee during the purchase process?? Apparently you asked him this yourself
            in the string below.

            Mr Higgins wrote: “My view was that there was far too little information available on which to form an opinion on
            this proposal. With the short timeline, I had doubt that there was time to compile good financial data and to give the membership a reason to support the purchase. . .As an officer of the corporation, I had an obligation to not lobby against the board’s referendum question. . .Outside the public eye, I counseled directors to not proceed if the referendum passed.”

            An obligation not to lobby. If he had too little information, why didn’t he ask for more information? Once he left office, why didn’t he speak out before the purchase was finalized in July?

            https://www.restonnow.com/2017/03/01/lake-house-review-spells-out-need-for-greater-transparency-from-ra-board/

          • Donald

            If it’s your desire to continue to persecute, far be it for me to get in your way.

          • John Higgins

            There should be no question as to the accuracy of staff’s reporting of bank balances. In 2016, at its lowest, there was some $5.2mm in the bank. In round numbers, $1.4mm of that was from 2017 assessment payments made before the due date (i.e., needed for 2017 expenditures.) About $1.1mm was due to employees and various vendors, so that cash was spoken for. That left about $2.7mm as so-called “surplus cash”.

            The discussion ought to be: what is the prudent level of working capital? RA spends about $1.2mm per month. The Fiscal Committee used to recommend a three-month supply of cash at all times. Given that most of its revenue arrives in the first two months of the year, that might be overly conservative.

            Perhaps something has changed (the above are 2016 numbers). On the surface, it would appear that using $2.3mm to payoff the loan would leave RA with a cushion of about $400k (a three-week supply of cash.) One asks, is the board comfortable with that?

          • John Higgins

            Reston2000, dear friend, one hears a lot of things that are not true. This is not a Tree House Club, it’s a multi-million dollar organization. If there is a reserve (there is not) it would be defined as to how it is used and how much is in it. What you are hearing is that RA has more cash than it needs for normal operations. That’s working capital or surplus. You are correct, there is a capital reserve. It is defined by board resolution, accounted for to the penny, and invested separately.

            I strongly agree that there SHOULD BE (excuse the caps, I can’t underline) an operating reserve. But there is not. If there were, we would not be asking: How much is it?

            I hesitate to call it fake news, but the suggested $750k of savings is an odd “fact”. In years four through ten (due date of loan) the RA will pay $398k in interest. Assuming they can earn only half the loan’s interest rate, there is potential savings of $200k. Sharpening the pencil for better investment returns, the difference could be made up or exceeded. That’s why I am not yet aboard the payoff train.

  • dudewe

    Sell this white elephant! Or least look at this alternative. And why is the CEO and her assistant(s) still on staff? They got RA into this money losing acquisition.

    • John Farrell

      Rent it out to a tea room operator.

      Good question.

  • Terry Maynard

    Not sure we could accomplish this in a single “bite,” but I agree with Sridhar’s thinking. Paying if off over 2-3 years based on discounted cash flow analysis, including penalties and other costs, might be the best idea. Key thing: DON’T raise Reston assessment fees or cut programs/projects to pay off this turkey.

  • Adrian Havill

    Pay ir off and sell it to private biz. Let it become a bistro and be done with it.

    • Donald

      What’s the assessed value now? Anyone know?

      Donald

      • Conservative Senior

        Year Assessed
        Total Tax Value
        Land
        Improvement
        Land Use

        2017 $ $ $
        2016 $ $ $
        2015 $1,204,080 $845,840 $358,240

        DEED Deed Liber:24222 Deed Folio: 285

        Transfer Date
        Price
        Grantor
        Grantee
        27-Jul-2015 $2,650,000 Lake Newport Llc Reston Association Inc
        22-Dec-2003 $750,000 Lake Newport Llc
        18-Dec-1996 $

        • Donald

          If I’m interpreting the tabs you posted correctly, $1.2 seems low for the size of that parcel, as well as the building. The homes, on much smaller lots, across the way are going for much more.

          Donald

          • Greg

            It’s assessed at $0 because it’s now a tax-exempt property.

            It was never assessed at more than $1.57 million, and that was before the 2008 bust.

          • John Higgins

            For the sake of clarity only, when RA acquired the property the county assessed it at $2.6 million based on the (somewhat thin) perceived development value. As an element of common property of a community association, it is “deemed” to have a zero value. Thus, it is technically not tax exempt, it is taxed on its deemed value….zero.

            The development value is fanciful and the deemed value is artificial. One might ask: given the zoning, easements, restrictions, etc., what is the “market value” of the property? But that question died with acceptance of the StoneTurn report.

          • Donald

            Mr. Higgins. If the not-for-profit decided to sell an asset, such as real estate, how would it determine the value? In the case of RA, I assume a referendum would be required.

            Donald

          • John Higgins

            An interesting question. (My first attempt at response didn’t make it through the filter here.) Having already voted with its checkbook to prevent development of the site, one presumes a sale would be accompanied by a deed restriction on future use. That would limit its market value considerably.

            Yes, a sale of RA assets requires approval by referendum.

          • Conservative Senior

            http://icare.fairfaxcounty.gov/ffxcare/datalets/datalet.aspx?mode=valuesall&sIndex=0&idx=2&LMparent=138
            Here is the link to the county web site where you can view the assessed value. NEVER, did the county assess it for $2.6 million, That was the fairy tale number Cate & her group agreed to pay. Remember the appraiser was coerced by RA to inflate the value to reflect what it “could” be but :would never be”
            because of the easements & restrictions. RB & KK profited & the RA members who were lied to are stuck with an overpriced money pit.

          • John Higgins

            In this day of instant information, history is easily lost. While the current info on the county’s site does not show it, shortly after the purchase the property was, indeed, assessed at the purchase price. For several months the RA paid RE tax on that assessment. I know because I saw the published assessment and urged RA to appeal to the Board of Equalization. I lost track of what they did, but obviously the record was corrected and I assume RA received abatement of the erroneous tax.

            I think you meant to say the county does not “appraise” property. That’s true. But they do “assess” it, that’s the basis for collecting tax.

            I’d ease back a bit on the appraiser’s role. They might have been influenced by the information provided by both buyer and seller, but coercion is too strong a term for how these independent professional appraisers came up with their numbers. (Note, they delivered two: one based on “as used” and one based on the hypothetical development of a restaurant.)

          • Conservative Senior

            I didn’t mean to say appraise. I was referring to your statement that the county assessed it for $2.6M. Never saw that info. The county doesn’t change the assessment immediately upon the sale of a property. Changes to the assessments are usually done in March of the year following a sale.

          • Reston2000

            Agree with you – it all comes down to the instructions given to the appraiser. All in all, if you read the appraisal, you will see where they honestly tell you that they were TOLD to appraise it as a restaurant, and they were TOLD that there was a market for a restaurant on the site, and they were TOLD to assume all deferred maintenance was corrected. They put the instructions right out there and because they did, we knew the appraisal was skewed. So I applaud their honesty and transparency. Without those notes, we would have never known where the numbers were coming from. Also, they continued to note that the site’s best and highest use was as an office, and offered a value for that (even though they were not instructed to do so). They did everything they could to tell us to go with the lower estimate but I am not sure that this was ever explained to the Board – they seem to have been told that an independent appraisal supported the price that the owner was asking (and were not told about all the nuances to that valuation.)

          • John Farrell

            Having read the assignment letter from McBride to the appraiser and read the appraisal, Conservative Senior’s description is fairly accurate.

            Too often I’ve heard appraisers answer the question “How much is it worth?” with “How much do you want it to be worth?”

            I don’t hire those appraisers but there are too many of them out there.

          • Donald

            Question: The Parcel appears to be considered a convenience center in the Reston Master Plan.

            “Vision
            The Sunrise Valley, Lake Newport, Soapstone, and Fairways Convenience Centers will continue to serve as small commercial centers for their respective surrounding neighborhood. The Reston Vision and Planning Principles serve as the basis for the Convenience Centers’ general vision, which provides general guidance for all of Reston.”

            Would we be able to sell the parcel and building accordingly? Say $2.5 to $3 million? Or more in today’s market?

            Donald

          • John Farrell

            Given the zoning restrictions and the easements limiting use, its hard to imagine what what value remains.

          • Donald

            I believe Looney had this parcel in play back in 2003. The County participated. Bring him back in to get this done right.

            Donald

          • Conservative Senior
          • Donald

            I’ll take Looney on this one. And I choose to look for a solution. And you can continue to look for reasons not to do anything innovative.

            I like my path. God bless ya.

            Donald

          • Reston Realist

            This property is not worth more than $1m in a best case scenario… forget wasting $$ on a zoning attorney! With all the easements and restrictions and lack of visibility, this site is a homesite or a dog park. Period. Unfortunately I don’t think zoning will allow a residence to be built there…. RA was swindled in this deal and we need to face up to it.

          • Donald

            What is the harm in the RA board sending out a call to the brightest, and creative to form a taskforce to identify potential solutions?

            I’m sorry, I just can’t accept “it can’t be done”.

            Donald

          • Reston2000

            Bravo Conservative senior!!

          • Greg

            I don’t see on the county land records where the assessment was $2.6 million. https://uploads.disquscdn.com/images/c3c08d2c018fd3037476d5c638d9a2c1ccd37c446771e4f0557659264bfb5eb4.png

          • Conservative Senior

            Thank you for posting this. Don’t know why the link wouldn’t open.

          • Greg

            Another POS county system we are stuck with 🙂

          • John Higgins

            The link on RestonNow didn’t work, that might be a link issue here. Going directly to the county site was easy enough. Search on the tax map number: 0172010022
            Rather than use the link, try a copy and paste.

            http://icare.fairfaxcounty.gov/ffxcare/search/commonsearch.aspx?mode=parid

          • Greg

            Also, since the RA members are proportionate share owners of the common-element property, why does it have $0 value? To record it that way is misleading at best.

            I think it’s also misleading and misrepresenting it as not tax exempt as the county is, likely in perpetuity now, losing the tax revenue it otherwise would have were the property taxed at market value.

            I think you previously said something to the effect that neighboring properties are now assessed higher to reflect the lost tax revenue. That may be fine from a revenue standpoint, but it still misrepresents the property’s worth for best and highest uses.

            What happens if the property is damaged, condemned, or taken by eminent domain? Is it valued at $0?

          • John Higgins

            I agree that the workings of tax matters are confusing and sometime confounding. It is state law that directs tax jurisdictions to deem these common area as having a zero value. I suspect that’s a matter of administrative convenience once the commonwealth decided to certain HOA properties from tax burden.

            I do not know how assessors distribute the untaxed value. My understanding is that it is spread among those who benefit from the common area. That might be a large segment of the neighborhood or it might be all of Reston….I just don’t know.

            Since this “deemed value” is only for tax purposes, it’s safe to say that value for insurance purposes is dictated by the policy. Eminent domain? Now there’s a good question. One can only imagine the fight we would be seeing.

          • John Farrell

            It’s a State Supreme Court case that holds that common area has de minimus taxable value holding that the value is incorporated into the sales prices of the lots in the HOA and thus should be part of the assessed value of those lots.

            There is a statute that says that this is not the case in eminent domain proceedings.

          • Reston2000

            The County did not assess at $2.6 million. Our own fact sheet showed the County assessment at $1,204,080. Furthermore, the earlier appraisal on the RA website noted that there was not agreement (between county officials themselves) regarding the development potential. The owner’s attorney went back and forth with the county for several years, and never got a clear determination from the county that it definitely could be used as a restaurant. This was probably one of the reasons why the appraisers kept identifying best and highest use as an office. The development of the property as a restaurant was shaky at best, which was probably scaring off anyone with an interest in developing it into a restaurant – there was not a meeting of the minds on zoning. To ask for it to be appraised only as a restaurant only served to drive up the cost.

          • John Farrell

            No, at the time of the referendum it was assessed @ $1.26 million.

            The assessment was increasec to $2.6 after the sale closed. Such mid-year re-assessments are fairly common after a sale, rezoning, subdivision or site plan approval.

          • 40yearsinreston

            Nothing could be built on it because of the easements
            Turn it into a dog park

          • Conservative Senior

            Donald doesn’t get it. Here’s the link with the easements.
            https://reston2020.blogspot.com/2015/04/a-partial-list-of-encumbrances-on.html

          • Donald

            “Always with the negative vibes Moriarty”

            1981: “Cellular phones will absolutely not replace local wire systems.” — Marty Cooper, inventor.

            1995: “I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” — Robert Metcalfe, founder of 3Com.

            2005: “There’s just not that many videos I want to watch.” — Steve Chen, CTO and co-founder of YouTube expressing concerns about his company’s long term viability.

            2006: “Everyone’s always asking me when Apple will come out with a cell phone. My answer is, ‘Probably never.’” — David Pogue, The New York Times.

            2007: “There’s no chance that the iPhone is going to get any significant market share.” — Steve Ballmer, Microsoft CEO.

            There are a lot of bright people living in Reston – I say a solution can be found.

            Donald

          • Conservative Senior

            Greg is correct. The property is tax exempt.

          • Reston2000

            Best and highest use by the appraiser was for an office at around $1.2 million which is about what the county assessed it for as well (that was in 2015, right before we purchased) – check out the 2015 appraisal and the Fact Sheet on the RA website for verification – our error was in appraising not at its best and highest use but as an expanded restaurant with all maintenance assumed corrected – those very specific instructions drove up the cost by almost $1.5 million over what it should have been – not clear how/why that happened

          • Donald

            That’s all well and good. But the best and brightest here have yet to give a hypothetical value for the property – now. What is the land and building worth now?

            Donald

          • Greg

            It’s not worth much, if anything, because it can’t be used for much. It’s best use was that which it was built for — visitors’ center. It should have been demolished once that use ended.

            Its second use was for a developer / architect, and that’s probably the only feasible re-use potential. Perhaps as home for a PR / advertising firm or art gallery (maybe not because of the flooding potential), but not much else that depends on visibility or parking or both.

            There’s more detail on the Tetra threads, but there are protection or conservation easements that prohibit much, if any, expansion of the relatively small building. There’s not much parking, and it’s all surrounded by expensive homes. All of these issues would quickly snuff out a food and beverage outlet, as would its invisibility from dark Baron Cameron Ave and isolation from anything but residential development. Hence, no interest from any such businesses in 20 or so years.

            Some or all of the building or parking or both sit atop a flood spillway.

            I would be fitting as the RA HQ, but they would complain it’s too small for a central office especially given the high-end space and fitting demands that RA staff (wrongly) insist on having. And, of course, RA is stuck with a very expensive lease in a terrible location.

          • Donald

            But, it’s zoned as a convenience center, and that parcel of land is rather large (versus the postage stamp lots of the surrounding homes). I think creative people would be able to come up with 100 ideas — and sell it all accordingly.

            Set a $ target, create a committee of volunteer experts, identify potential outcomes and tactics, create a timeline and implement. Jesus! When I served – I can’t imagine taking one of you into the jungles with me.

            I’ll let everyone wallow in the past and their “insurmountables” — and not discuss potential solutions.

            Peace,
            Donald

          • Greg

            Did you miss the “insurmountables” of the easements and development restrictions? Flood spillway? Those are hard facts that not even Looney can surmount.

            Also, the property was for sale for many years e before RA bought it — there was no interest.

            It may be zoned for a convenience center, but with its access and visibility issues, a c-store there would fail in a week. That is assuming the 1-percenters living nearby would ever allow it open.

            Nonetheless, I salute your lofty goal of relieving the RA of the burden of this disastrous purchase. And, the sooner we are done with it, the better.

          • Donald

            You and I will just agree to disagree. But, I’m seeing Looney and team resolving “insurmountables” to their benefit every day around us. This would be no different.

            Donald

          • Conservative Senior

            Sorry……but if “you see them resolving “insurmountables” to THEIR BENEFIT……..” No, no, no………….

          • Conservative Senior

            Don’t think he is the right choice. He’s involved with BP at Reston Town Center & was also involved with the Reston Transit Station Areas. The advisory group ( Cate is included) was created by Hudgins. We know that those within 1 mile have a special tax, not good for the residents but great for developers/builders.
            http://www.fairfaxcounty.gov/fcdot/restonnetworkanalysis/advisorymembers.htm

          • Donald

            I agree with everything you say. Which makes him perfect to put gold on this albatross and get I sold, with a premium on top.

            Donald

          • Conservative Senior

            Please don’t take the Lord’s name in vain. Shame on you.

          • Conservative Senior
          • Conservative Senior

            An independent, experienced & honest appraiser who is not beholden to anyone!

          • 40yearsinreston

            The fix was in
            Look who profited
            There are only about 10 property owners who did

          • Reston2000

            …And the banks who were tied to this developer

      • Donald

        So, after all the back and fort below, can anyone take an educated guess as to the market value of the property (land and building)?

        Donald

    • 40yearsinreston

      No one is stupid enough to buy it
      It was touted to be a restaurant space, but that soon proved to be a lie

      • Adrian Havill

        Dunno. Lots of stupid people out there which is probably why 70 percent of non-franchised restaurants fail within the first year. Location, location and it looks out on a body of water. RA should offer it for sale and if they don’t get their price, hire an arsonist, assuming they have insurance.

        • Greg

          And you recommend a bistro. #smfh

          • Adrian Havill

            You don’t catch a fish until you put the hook in the water.That’s a metaphor by the way. (Hope its not too pompous for you.

  • Feh

    We can all be totally confident that the same imbeciles who made the wrong decision in the first place (i.e., to buy this dog of a property) will make the wrong decision in this case too. Why are those clowns still employed, again?

    • John Farrell

      Wrong.

      Only Julie Bitzer and Michael Sanio are left on the Board who supported Tetra.

      And the Board is a volunteer position.

      • Feh

        Two words: Cate Fulkerson

        • John Farrell

          Amen

      • SuperCoop1280

        That’s good to know about Bitzer since I live in South Lakes. I will NOT be supporting her re-election efforts and I will make sure our Cluster knows.

  • Greg

    “The Lake House is projected to bring in about $143,000 in 2017, well below the $300,000 estimate that was in the budget.”

    Imagine that!

  • 40yearsinreston

    Level it and turn into a dog park
    The sooner the better

    • John Farrell

      Not after spending $500,000+ to fix it.

      • 40yearsinreston

        Throwing good money after bad

  • End of story

    Good idea but it will never happen.

  • anonymous

    All you guys are thinking too narrowly. As you would know if you had been paying attention, the county is looking for a place for septic tank pumpers to dump their loads. What better place than this property? Charging a decent fee per poop dumped might allow this place to finally generate a profit. Wipe the books clean.

    • John Farrell

      Ha Ha

×

Subscribe to our mailing list