Town of Herndon turns to county to fill funding gap for stalled Downtown Herndon redevelopment

The clock to begin the stalled redevelopment of downtown Herndon by the end of the year is ticking.

Members of the Fairfax County Board of Supervisors have expressed support for providing $5 million for the delayed development of downtown Herndon — a project that faced a nearly $25 million funding gap last year.

The $109 million project would transform 4.7 acres in the town’s historic district with 273 apartments, 17,000 square feet of retail, a 16,265-square-foot arts center, and a 726-space public parking garage, 330 of which would be reserved for the town.

At a meeting with the board earlier this week, town manager Bill Ashton said a major funding gap prompted the town to turn to the county for help.

The Town of Herndon and Comstock, its private development partner, agreed to split a funding gap of roughly $24.6 million. Tax abatement efforts and several design changes — including eliminating the mezzanine of the arts center and reducing one underground level of the planning parking garage — still left a $5 million funding gap.

The project has been marred by delays since its inception. Groundbreaking was originally planned for December 2019.

The estimated price tag of the project rose from $79.4 million in 2016 to $111 million in 2019 due to increases in the cost of construction, materials and labor, Ashton said. 

Comstock rebid the project in 2020 in order to leverage possible savings due to the pandemic, but a significant funding gap still remained.

The town then quickly crafted a robust tax break program, creating the mechanism to offer Comstock $2.4 million in fee reductions and $1.9 million in real estate tax abatement.

The project is expected to result in $886,500 in Fairfax County General Fund Real Estate taxes after the first year of occupancy, according to an analysis by JLL.

County staff suggested dishing out funds over a period of years in order to minimize the impact of the request on the reserve fund. The economic opportunity reserve fund is intended to purchase real estate, fund capital development projects and provide programming support for economic development activities of “strategic importance,” according to the county.

Board chairman Jeff McKay encouraged staff to ensure that the delivery of funds was tied to development milestones. County staff noted that funds would be dispersed conditionally. 

The board is expected to vote on the funding request at its board meeting on Dec. 7. Groundbreaking is expected to begin in December — nearly two years after the first estimate.

The garage will be completed by August 2023, followed by the arts center in December of that year. The entire project is expected to close out in March 2024. The Town selected Comstock for the redevelopment project in November 2016.

It’s not the first time the town went before the board for project funding.

In 2018, the board approved $1.2 million in funding for the project. But no funds have been dispersed to date because the agreement required the town to contribute $1.2 million first.

The arts center will include a black box theater with programming by ArtsHerndon and NextStop Theatre Co.

Mason District Penny Gross urged the Town of Herndon to ensure the arts center is accessible to all, especially in a town with as much economic diversity as Herndon.

Hunter Mill District Supervisor Walter Alcorn also said he wanted to ensure the arts center and the overall project was an asset to the public.

Ashton said that the arts center will include programmable outdoor space and a public plaza. The council will determine an operating model for the arts center once groundbreaking begins, he said.

Photo via handout/Comstock