Manassas Park makeover taking shape

Manassas Park’s city government will have fresh digs starting next week with the opening of a new city hall building that will ultimately feature a city library, a coffee shop and restaurant space.

Built through a public-private partnership, the $46 million city hall is the first component of a massive plan – known as Phase Three – to remake the city’s downtown area and draw new tax revenue to a debt-strapped city government.

And city officials hope the effort that’s delivering the new facility can help the municipality overcome decisions made inside the previous building.

On July 16, the city will hold a ribbon-cutting for its offices, after which the government will begin moving into its new home. The city hall plaza, complete with a splash pad for kids, should also be fully open by the end of the week, officials said. The first-floor library should be open by mid-August, and with it a second location for the Old Town Manassas staple Jirani’s Coffeehouse as well as La Finca Mexican restaurant.

Once the city government is out of its current building, City Manager Laszlo Palko said, that building will be demolished to make way for more restaurant space, a Cinema Cafe theater complex and a second public plaza that – together with the new plaza – can be used for outdoor events. Palko said officials hope the theater component and a new parking garage will be open by spring 2024.

Before that happens, the first wave of 300 new residential units built by Stanley Martin are expected to be complete and generating new tax revenue.

The full plan was approved by the City Council in 2020. For city officials, the idea is this: Developers Norton Scott and Stanley Martin will build the city hall structure, entertainment complex and homes. Manassas Park will then enter into a 30-year lease-to-buy agreement with Norton Scott to essentially rent the city hall complex. Lease payments begin at $535,000 in fiscal 2024 and increase to $1.6 million by fiscal 2026, near where they’ll stay for the duration.

At the same time, the plan moves what was a capital liability – the dilapidated city hall building – off the books to make way for something residents will actually enjoy.

“It’s an important step from a capital standpoint, where city hall itself was a long-term capital liability on our taxpayers that we’re essentially addressing through this development deal so they’re not burdened with that,” Palko said. “So we’re resolving a major capital liability through this development, and we’ll have a nice plaza for our residents to enjoy with a splash pad for the kids to play in the fountains during the summer time.”

Officials say the sale of city-owned land to the developers will cover early lease payments until the residential component is fully built out and generating more than enough new revenue to pay for the city hall lease. So far, Palko says, what new homes have been sold have gone for well more than the city projected, meaning new revenues should be higher than what he’d initially hoped for.

Still, for some it may sound like yet another grand Manassas Park plan that won’t pay off. Years of financial mismanagement and a slew of new public facilities built or refurbished ahead of the 2008 financial collapse left the small city’s government with debt it couldn’t soon repay.

The city’s annual debt service – which reached a peak of almost $10.75 million, or 24% of its non-school-related budget in fiscal 2019 – has tied the small government’s hands financially. As a result, salaries for teachers and other government workers have stayed at the bottom of all Northern Virginia jurisdictions despite the highest real estate tax rates in the commonwealth.

Previous iterations of downtown redevelopment plans have also failed to deliver on their promises, most notably Park 170 that opened in 2009. While new homes mostly filled up and remained full, storefronts intended to enliven the downtown area and draw shoppers almost all sat empty well before the COVID-19 pandemic.

City officials have said the plan currently underway learns from previous mistakes, building more housing – which the market has shown a demand for – rather than commercial space, activating the downtown area with new entertainment options as opposed to the shopping-oriented developments of the past, and building more parking next to the Virginia Railway Express station. And importantly, the city issues no additional debt as part of the plan, though it does commit to yearly payments of over $1 million for 30 years.

“The success of this project is based on a high standard of careful decision-making and the analysis of real data, and on what will bring maximum benefit to the city and all its residents,” Mayor Jeanette Rishell told InsideNoVa in a statement. “This project corrects past mistakes and challenges such as: improving the parking situation, providing an anchor business for the downtown to draw in more businesses, and moving the VRE parking garage to the original recommended location.”

And the city is finally out of the worst of its debt woes. A refinancing years ago has dropped debt payments to $9.4 million last fiscal year and just over $8 million on a $122.5 million total budget (including school spending) this fiscal year, which just began. Those debt savings allowed Rishell and the City Council to drop the real estate tax rate this year from $1.53 per $100 of assessed value to $1.45. Though that rate is still the highest in the state, it’s getting closer to some peer localities.

Plans are also in the works for the fourth phase of the city center development, which will add two residential high-rises and more parking to the vacant storefronts at Park 170, the 2009 commercial development that fizzled out.

For now, though, the long-embattled city government hopes to turn a new leaf inside its new building.

“We inherited a lot of issues and then we got hit by COVID, and inflation, so there’s a lot of things that have been happening, but we continue to move forward with these successes. So next Saturday’s just kind of a celebration,” Palko told InsideNoVa. “We’re not fully celebrating, and I’m not going to be happy until everything’s complete and fully occupied and the economy’s going. But it’s an important step.”