By Diana McFarland

Managing editor

Cash proffers will no longer be suggested by Isle of Wight County during a rezoning. 

In a sweeping local policy change, the Board of Supervisors declared last week that developers will now conduct their own proffer study and certify that it complies with a new state law that takes effect July 1, according to resolution passed Thursday by the Isle of Wight Board of Supervisors.

Thus, in the future, developers and their consultants, rather than the county, will determine the level of funding those developers will offer to offset future capital costs associated with their development.

The resolution adopted by the board applies to all rezoning applicants — from large-scale developers to individuals wanting to build a single house on a single lot.

In addition, if any future rezoning application is denied, the county will be required to adopt a resolution providing the facts as to why it was turned down. {mprestriction ids=”1,2,3,4,5,6″}

The county’s most recent proffer study in 2012 cost nearly $48,000, according to county spokesman Don Robertson.

The move was made by the Board in an effort to avoid future litigation on the heels of a new law forbidding localities to request or accept “unreasonable” proffers.

The word “unreasonable” has caused significant “concern and angst” throughout the Commonwealth,” said Isle of Wight County Attorney Mark Popovich.

Under the new law, a proffer would be deemed unreasonable unless it addresses an impact directly related to the new residential development.

There was no discussion by the Board Thursday, and the proffer policy that had caused years of debate, was unanimously repealed.

The Smithfield Planning Commission plans to look at the new law and the action by the Isle of Wight Board of Supervisors and make changes accordingly, said Smithfield Town Manager Peter Stephenson.

The town doesn’t have a proffer policy and the majority of cash proffers that have been accepted by the town are passed on to the county for public schools, so its change in policy would directly affect a new rezoning application in the town, Stephenson said.

Proffers — allegedly voluntary gifts of cash or other tangibles — are offered by developers during the rezoning process, and are theoretically designed to offset the cost of growth for localities when it came to schools, public safety and other infrastructure.

Protracted proffer negotiations often took place during past rezonings in Isle of Wight County, and in some cases resulted in more than just cash per lot, which stood at $13,358 for a single-family home before the policy was rescinded.

Prior to the 2007 recession, the developers of Lawne’s Point gave the county the land that was the site of the Civil War-era Fort Huger, as well as land for the still undeveloped Bradby Park in Rushmere as part of the cash proffers associated with that project. The landowners of Benn’s Grant offered to make improvements to the Benn’s Church Boulevard intersection. The historic Jordan House, was once a subject of intense proffer debate related to Benn’s Grant, was part of a proffer discussion, but its preservation was never formally offered and it now stands boarded up and abandoned at the edge of the new development.

As the recession wore on, the Benn’s Grant landowners asked for a break on cash proffers, which led to a reduction for all developers of large mixed-use developments in the northern end of the county. The move was seen as a way to spur on economic development.

Developers in the past often feared that if they did not offer full proffers their projects would be denied — although legally that was not supposed to happen. They also complained that proffers increased the cost of the housing they would eventually offer to the consumer.

Proffers also applied to individuals wanting to build a single house on a lot, as well as businesses. Small business owners resented the suggestion of proffers and complained that they brought in revenue to the county and did not impact schools and other infrastructure the way residential development does.

About three years ago, local realtors asked the Board to put off adopting its new proffer study and put a moratorium on the practice until the market fully recovered from the recession.

In response to Isle of Wight’s strategy in dealing with the new proffer law, the Hampton Roads REALTORS Association said it believes housing is critical to economic development.

“To be successful in attracting new business and employers, Isle of Wight needs to have a vibrant housing market.  New housing creates jobs, which in turn creates a larger tax base and grows the local economy, not to mention local county revenues,” said Becky Claggett, chairman of the board of the Hampton Roads REALTORS Association.

On the other hand, the Virginia Association of Counties opposed the bill as it made its way through the General Assembly earlier this year.

“In terms of what the impact will be on rezonings for new residential development, it all depends on how individual localities and developers both interpret and respond to the change in law. One specific concern we have is that the new law will limit the ability of local governments and residential developers to arrive at agreed upon solutions to ameliorate the impacts on schools, roads, public safety, etc.,” said Joe Lerch, VACo director of local government policy.

Lerch said each locality in Virginia has its own set of circumstances that will lead it to creating a strategy to deal with the new law.

A locality could, as a minimum, decide not to “include reasonable regulations and provisions for conditional zoning, as outlined in the code dealing with proffers, according to Lerch.

“In essence they would inform an applicant that there would be no conditions for approval tied the land being rezoned. It would simply be an up or down vote to reclassify to a different zoning district,” Lerch said.

Robertson said Isle of Wight, as well as other localities, are waiting to see how the new law plays out.

The unintended consequence could be that Isle of Wight won’t have a proffer study that is used across-the-board with all rezoning applications, Robertson said, adding that under county’s new resolution, it could work in a developer’s favor since they are the ones paying for the study.

Right now the county is working to avoid potential litigation that could end up costing the taxpayers money, but it could impact rezonings in the future, he said.

Isle of Wight County began relying on proffer studies in 2003 as burgeoning residential growth began putting a strain on schools and services. The growth spurt continued until the recession hit in 2009, when residential development reached a near stand-still. The housing market is beginning to recover, with brisk sales of homes at Benn’s Grant and new apartments at Eagle Harbor.    {/mprestriction}