In February, RCA issued a letter raising questions about MWAA’s plans to locate non-aviation-related commercial development at Dulles Airport near the planned Silver Line station. In the letter, RCA noted that MWAA s exempt from federal and state taxes, and expressed concern that if commercial development on that land were similarly tax-exempt, then MWAA would have an unfair competitive advantage over surrounding non-airport development in attracting tenants.
RCA also stated that the development would represent a windfall profit for MWAA, capitalizing on the investment in the Silver Line, which will be paid for primarily through tolls on the Dulles Toll Road. RCA called on MWAA to apply the profits from commercial development at Dulles toward defraying the cost of the Silver Line.
One of the parties to whom RCA sent the letter was Virginia Governor Bob McDonnell. Recently, RCA received a reply to its letter from McDonnell’s Secretary of Transportation, Sean Connaughton. The text of is reply, addressed to RCA President Colin Mills, is reproduced below.
Dear Mr. Mills,
Governor McDonnell has asked me to thank you for and respond to your letter concerning development on Metropolitan Washington Airports Authority (MWAA) property and for your concern about the Dulles Metrorail extension.
Please be assured that although the airports are exempt from taxation, any non-aviation commercial development at Dulles will be taxed and will produce BPOL, and other tax revenues for Loudoun County and income tax revenues for the Commonwealth of Virginia; development of land for non-aviation commercial purposes will be done in cooperation with Loudoun County; and that Congress has expressly permitted the use of leased land at Dulles Airport for other than aviation purposes with the express approval by the Secretary of the US Department of Transportation.
Longstanding federal policy requires that all revenues generated at Reagan and Dulles Airports be used for the capital and operating costs of the airports. These revenues may not be sent to third parties for purposes unrelated to the airports.
Virginia is anticipating an announcement soon regarding federal TIFIA funding. MWAA has applied for a sizeable loan for the Dulles project phase 2. When this is finalized I am hopeful that MWAA and the funding partners will be able to develop a funding plan to ensure the construction of phase 2 with the least impact on the Dulles Toll Road and taxpayers in the region.
Thank you for your commitment to ensuring that the best decisions are reached concerning this project.
Sean T. Connaughton
You may read RCA’s original letter in full here.