Falls Church approves deal to subsidize cinema with taxpayers’ money

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Falls Church lawmakers voted Tuesday night to approve a deal that would provide up to half a million dollars in tax revenue each year for a long-awaited movie theater in this small northern Virginia suburb.

The unusual economic incentives deal had come under criticism from some residents and city leaders who questioned whether funding a movie theater was an appropriate use of city money. A first vote scheduled for September was delayed after the city’s planning commission ruled against the deal.

But in the end, all but one of the city council members voted for the go-ahead OKwhich supporters had hailed as a way to secure Falls Church’s first new movie theater in decades — a deal that had already been cemented by lawmakers years ago.

“The taxes we’re talking about today are taxes paid by people going to the theatre,” city council member Debbie Hiscott said at a city council meeting. “If you don’t go to the theater and you don’t pay taxes on those tickets, you don’t contribute to those taxes which go to the owner.”

Falls Church wants a cinema. He could use taxpayers’ money to pay for one.

As part of the deal, Falls Church would essentially redirect much of the revenue it collects over the next three decades from taxes on ticket sales and movie theater concessions to developer and landowner, Mill Creek Residential. Trust.

Proponents of the plan had pointed out that incentives were needed to attract an entertainment hub that might otherwise choose to locate in the city’s much larger and better-endowed neighbors – and could attract visitors and even lower taxes for residents. of Falls Church.

The incentives serve “to give us a complete community where we walk toward entertainment,” Mayor David Tarter said, “and not just a dorm community where you drive somewhere else.”

The first $20,000 generated by the city’s 10% ticket tax will stay with Falls Church. Any money raised beyond that up to $340,000 would go back to the developer in the form of annual grants.

The first $10,000 generated by the city’s 4% dining tax would go to Falls Church, while up to $150,000 beyond that would also go to the developer. All dollar figures will increase by 3% each year.

That said, the theater might get less money from Falls Church based on its performance: if the theater earns $13 million in a given fiscal year, grants are suspended. And if that happens four years in a row, the city will end meal tax subsidies entirely — and cut other subsidies to 20 years instead.

The deal is also contingent on the developer meeting certain milestones intended to keep the developer on track on this long-delayed project. They include: executing a lease by the end of the month, submitting design drawings to the city by December 31, and opening the theater by March 2024.

Paragon Theatres, a small chain that also has movie theaters in Florida, North Carolina and Fredericksburg, was selected as the theater operator for the project.

City lawmakers had approved a similar deal with the developer in 2o16, but the cinema had to revise its plans, shrinking one screen and reducing seating from 750 to 550 as the coronavirus pandemic dealt a severe economic blow to locals. cinemas.

The Founders Row property replaces a strip on a main road that previously included a handful of beloved small businesses, including a bowling alley and a caterer/ice cream parlor. The Development project also includes apartments, residences for the elderly, commercial spaces and offices.

Vice Mayor Letty Hardi said while she recognizes vocal opposition to the idea of ​​using public money for film, the design of the project hinges on keeping cinema as the anchor.

“Given that the site was really built around the theatre…I don’t hear of a viable alternative for the space envelope,” Hardi said. “It would be irresponsible of us not to continue at this stage.”

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