2010-10-06 / Front Page

County disagrees with opinion on proffers

By Greg Pearson

Despite an opinion by Virginia’s attorney general to the contrary, Chesterfield will continue to collect cash proffers on new homes rezoned prior to July 1 when their building permits are filed, instead of when the county issues a certificate of occupancy (CO).

New legislation passed by the General Assembly requires proffers to be accepted at CO for rezonings approved during the four-year period starting last July 1. Previously local governments collected proffers about six to nine months earlier when the building permit was applied for.

Del. Christopher Peace (R-Hanover) requested an advisory opinion on whether proffers on homes rezoned prior to July 1, 2010, should be collected when a CO is issued. By delaying payment to a CO instead of building permit, builders could be reimbursed more quickly.

Peace wanted to know if that applied retroactively to rezonings. Attorney General Ken Cuccinelli replied yes.

“…a locality may not accept or demand payment of any uncollected cash proffer payments, including those agreed to prior to July 1, 2010, until the completion of a final inspection and prior to the issuance of a certificate of occupancy for the subject property, not withstanding the provisions of any such proffer agreement to the contrary,” wrote the attorney general.

That would nullify existing zoning agreements where Chesterfield requires proffers to be paid with the building permit. “I don’t think this is a cash proffer issue as much as it is undoing local zoning decisions,” said County Administrator Jay Stegmaier. He doubted the development community would side with the attorney general if Cuccinelli opined that counties could overturn zoning decisions.

County Attorney Jeff Mincks pointed out that opinions from the attorney general are supposed to be considered but “are not binding” on Chesterfield. “This is the way we have consistently approached attorney generals’ opinions and, I believe, is the way other localities approach these opinions,” he wrote in an e-mail Friday.

“Paying the proffer at CO helps the builder with cash flow,” acknowledged Kevin Mc- Nulty, head of the Home Building Association of Richmond (HBAR). Asked if HBAR might sue since the county is sticking to collecting proffers at the time building permits are issued, McNulty responded, “We hope the county follows the intent of the legislation and the opinion of the attorney general.”

“We marketed the bill to the legislature as one that would create jobs,” explained Mike Toalson, CEO of the Home Building Association of Virginia. “It’s been documented that 41 percent of those unemployed are linked to the housing industry. The clear legislative intent was to apply the law to existing proffers to create jobs now.”

“Our [county] board hasn’t taken official action…[but] other counties that collect proffers aren’t changing the way they do business,” added Stegmaier.

That’s the case in Hanover County, according to Tom Harris, public information director. “After a presentation last June by our county attorney, the board [of supervisors] reaffirmed our current proffer policy,” he said. “The board was concerned that a homeowner might be faced with paying thousands of dollars [in proffers] after moving in.”

If the proffers on a new home weren’t detected during closing, the proffer obligation would transfer to the new homeowner. That’s possible but unlikely, agreed attorney Les Saunders, whose practice includes real estate closings. Chesterfield’s current maximum proffer is $18,966.

“We always make sure at closing that any cash proffer, if applicable, has been paid,” said Saunders.

But temporary COs are issued – last year there were 75 of them in Chesterfield. They usually apply to weather issues such as growing grass or grading the yard. “They are not approved for any safety matter,” said Bill Dupler, interim deputy county administrator.

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