Leesburg Council Eyes State Petition to Annex Compass Creek, Microsoft Land

The Leesburg Town Council on Tuesday is expected to initiate an annexation petition to incorporate the entirety of the Compass Creek development, including a Microsoft data center campus.

According to a draft resolution prepared for the meeting, the town plans to apply to the Virginia Commission on Local Government to annex the land through the approval of a special annexation court that would be appointed by the state Supreme Court. 

The action comes a year after talks with county leaders on a potential tax revenue sharing deal covering the data centers broke off. 

The town and county previously agreed on two cooperative boundary line adjustments covering portions of Compass Creek, although only one has been complete. The second BLA, which would bring land that includes the Super Walmart and the At Home stores into the town limits, was approved in April, but has not moved to the Circuit Court for final approval. According to a statement by the town, the county “has been very slow in working with the Town to complete the second boundary adjustment and the Town has very little confidence it will ever be completed.”

At the core of its annexation petition, the town plans to argue that the Joint Land Management Area that includes Compass Creek was established to accommodate the natural expansion of the town. The draft resolution notes that the property, including the Microsoft land, is served by town water and sewer service and the town claims the data center project could not have developed on schedule without access to town utilities.

The tax impact of annexation has been a central focus of the negotiations. If annexed, the data center campus and other businesses on the property would be subject to both town and county real estate and personal property taxes. While the county would not lose revenue, the property owners would pay more taxes.

While raising the threat of a rare adverse annexation, the town “remains willing to reach a fair and reasonable revenue sharing agreement with the County regarding the data center parcels and complete the Walmart and At Home boundary line adjustment,” according to the statement.

“The Town has negotiated in good faith with the County. The Town has been a good partner throughout the process by agreeing to serve each phase of the Microsoft development with water and sewer service when needed. However, as negotiations have moved forward, the County has continually reduced the potential benefit to the Town,” Mayor Kelly Burk stated. “We want to partner with the County on economic development opportunities in the JLMA. We remain committed to reaching a mutually beneficial resolution; however, any agreement with the County must be on fair and reasonable terms to the Town. Leesburg has been a partner in this economic development project and should benefit from this project’s success.”

The resolution lays out a series of benefits town leaders say would result from the annexation, including that the town will expand its tax resources, allowing it to provide existing and additional urban services to the town, the annexation area, and the surrounding region; development of the annexation area will create additional employment opportunities;  the properties in the annexation area will benefit from a higher level of services provided by the town, as well as lower water and sewer charges; the annexation will not have any material adverse effect on the county, as the county will continue to collect taxes from the annexation area, and the property in the annexation area will remain a part of the county; and the commonwealth and the county will benefit “because Leesburg will be a more viable and vibrant locality with enhanced resources to provide high quality municipal services to its citizens and the surrounding region.” 

5 thoughts on “Leesburg Council Eyes State Petition to Annex Compass Creek, Microsoft Land

    • 2022-09-08 at 4:20 pm

      Pretty simple – ever since the Crosstrails application in 2004, the Town has predicated its road, water and sewer service investments (and yes, the utilities do have to be revenue neutral) for that property on being able to collect the tax revenues on that property. That was the understanding for many years. However, the County is not moving towards the boundary line adjustment (BLA) that the Town expected and County already agreed to.

      The developer attempted an ‘end-around’ on the Town on the 2004 application by trying to use a different service for water and sewer, but the County wouldn’t let them…..nor would the Town, especially since they had put almost $20M into the utilities to service that property (and others) regarding what’s known as the ‘Lower Sycolin Watershed’. There are agreements between the Town and the County regarding water and sewer service outside of Town boundaries, in some cases due to proximity of lines, but in many cases because an expansion of Town boundaries has always been expected.

      As noted in the article, the Town and County previously agreed on two BLAs, but only one has been completed. The second one covers Walmart and At Home, and it seems to be languishing.

      In this case (and probably only ever just this once, because I rarely agree with anything she says anymore) I agree completely with Mayor Burk in her statement, but not with what she’s accomplished – or hasn’t. The Town invested in roads and sewers and waste treatment and such, and now it seems (from the outside) that they’ve pretty much been told to go sit in the corner and be quiet. One would expect with her experience as a former Supervisor that she should’ve gotten this done by now.

      • 2022-09-12 at 10:06 am

        Thank you for the missing piece of the puzzle. It makes sense now.

  • 2022-09-08 at 7:25 pm

    The property will be taxed twice by Leesburg and the county. That’s only incentive for businesses to stay away. Leesburg is just trying to get something for nothing and should derive no benefits whatsoever.

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