Niagara Bottling's highly automated plant in Meadowville Technology Park is one of Chesterfield's top commercial taxpayers
Over the past 40-plus years, thousands of people have voted with their feet by relocating to Chesterfield County, concluding that the combination of high-quality schools, a safe community and relatively affordable housing makes it a great place to call home.
According to the 1980 U.S. Census, Chesterfield’s population was 141,372. It is now 365,306 – making it the fourth-largest county in Virginia – and growing at an average of about 1.5% annually.
On one hand, that’s positive. Sales of new and existing residential units in all five of Chesterfield’s magisterial districts are being driven by market demand; the county’s high overall quality of life continues to attract an educated and increasingly diverse workforce, which has become a key factor for businesses in the site selection process.
Without corresponding commercial investment, however, construction of additional housing exacerbates an imbalance in the local tax base that dates back to the late 1970s -- when multiple years of double-digit residential growth began transforming Chesterfield into the most popular bedroom community in the Richmond region.
While the county has been successful in gradually expanding its commercial tax base, it remains disproportionately reliant on residential real estate assessments to pay for public services, such as schools, police, fire, parks and libraries, as well as improving connectivity for both motorists and pedestrians.
County Administrator Dr. Joe Casey’s proposed operating budget for fiscal year 2023, which will be presented to the Board of Supervisors at a March 9 work session, totals $904.2 million.
More than half of the financial plan, or $473.3 million, is funded from real estate taxes – and about 78% of that revenue is generated by assessments on residential property.
(Note: The latter figure would be even higher, but apartments are categorized as commercial development because they generate ongoing income. New apartment complexes were four of the five most highly valued commercial projects to open in Chesterfield last year).
In light of rising assessments, the Board of Supervisors already has committed to cut Chesterfield’s property tax rate by at least 2 cents this year and staff has proposed to cut the rate by another penny; Dr. Casey's proposed budget is balanced against revenue from a 92-cent rate.
Generating additional tax revenue from commercial development would give the board the flexibility to further reduce the rate and shift more of the burden for funding the local government from homeowners to businesses.
Chesterfield remains disproportionately reliant on residential real estate assessments to fund public services
County leaders recognize the risks associated with being too dependent on any single revenue source. Following the recession of 2008, which was fueled by the collapse of the global housing market and resulted in severe local budget cuts, the Board of Supervisors set Chesterfield on a course to more aggressively pursue commercial projects.
Attracting industry is the most efficient way for municipal governments to pay the bills. Such development bolsters the local economy and tax coffers while driving far less demand for public services than new housing.
As a Dillon Rule state, Virginia localities are limited to taxing authority specifically granted by the General Assembly. That’s one of the reasons why it’s so vital for Chesterfield’s future to achieve the highest and best use of the 2,400-acre Upper Magnolia Green site
At the direction of the Board of Supervisors, the county’s Economic Development Authority acquired the property in December 2020 with a plan to rezone it for development as a technology village.
There currently are only two industrially zoned, undeveloped properties in Chesterfield that have 100 or more contiguous acres, inhibiting the county’s ability to compete with other localities for major economic development projects.
While Chesterfield has a large land mass (437 square miles), its northern half is heavily built out with residential. Because of the county’s ideal location and access to both regional and interstate transportation networks and the nearby Port of Richmond, logistics companies also have taken many commercial parcels off the market in recent years.
Development of Upper Magnolia Green, then, represents the best opportunity to meaningfully diversify Chesterfield’s tax base; attracting a highly automated advanced manufacturing operation there would create multiple ongoing streams of commercial revenue for the county.
That’s particularly important because the cost of labor is rising significantly. Chesterfield -- like all local governments across the nation -- faces challenges in recruiting and retaining thousands of teachers, public safety employees and other front-line workers who provide high-quality service to residents.
At the same time, county leaders are mindful of the impact of increasing real estate assessments on household budgets, particularly for a growing number of Chesterfield seniors who are retired and living on fixed incomes.
Local revenue generated by a technology park and ancillary businesses in Upper Magnolia Green would mitigate Chesterfield’s historic reliance on residential assessments, while also allowing for additional reductions to the property tax rate.
Both have been stated objectives of the Board of Supervisors since it hired Dr. Casey to lead the county government in 2016.