Tax the Country Clubs Like You’d Tax Anyone Else

Prime real estate: the Army Navy Country Club in Arlington

As if the General Assembly didn’t have enough image problems, our august representatives are pushing legislation that would provide property tax relief for two Arlington County country clubs, reports the Associated Press. The bill has passed the House with bipartisan support and made it through the Senate Finance Committee.

The combined property bills of the Washington Golf and Country Club and the Army Navy Country Club amount to $870,000 a year — equal to the 11 next highest-taxed country clubs in Northern Virginia. The clubs have spent years in unsuccessful negotiations with Arlington County to lower the tab, so they have turned to the General Assembly.

“What we have here is a question of equity,” says Del. Tim Hugo, R-Centreville. “It comes back to basic fairness.”

But opponents of the bill say the clubs can afford it. Writes the AP:

Both clubs have long and storied histories and count many of Washington’s elite as members, including past presidents. Top staff at both clubs are paid handsomely, federal tax records show. The general manager at the Army Navy club makes about $400,000 a year, while the tennis director at Washington Golf and Country Club makes about $300,000 a year.

The Army Navy Country Club allows active-duty military officers to join for free and offers other discounts to veterans, while civilians must pay $72,000 to join the club. The Washington Golf and Country Club did not respond to a request for information about its fees, but Washingtonian magazine reported a decade ago that the fee then was $70,000. …

“The bill is a tax cut for wealthy country club owners, including those outside of Virginia, in favor of raising taxes or cutting services for the residents of Arlington,” said Del. Alfonso Lopez, a Democrat who represents Arlington.

OK, nobody feels sorry for the rich, snooty swells who belong to the club. Reverse snobbery always plays well in certain quarters. Screw ’em, they’ve got plenty of money. Let them pay more.

I don’t have much sympathy for the stick-it-to-the-rich argument. But I do have sympathy for a different argument. County board member John Vihstadt said the tax bills for the golf clubs are so high because the property values are so high. Arlington is a dense urban county right next to Washington D.C.

What is the highest and best use of the land? Golf courses for the well-to-do? Or development that provides housing, retail, and office space in the core of the Washington metropolitan area, which is suffering from a shortage of developable land? From an economic perspective, it’s not even close. The land would be worth more if converted to mixed-use development.

Property owners have rights, of course, and no one should compel the country clubs to relinquish their golf courses. No one is talking about exercising eminent domain to take over the land, but I would certainly oppose any effort to do so should anyone propose it. On the other hand, the clubs have no more right to favorable tax treatment than other property owners. The General Assembly needs to butt out and let Arlington make its own land use decisions.

There are currently no comments highlighted.

33 responses to “Tax the Country Clubs Like You’d Tax Anyone Else

  1. Ok where is Larry “treat everyone the same and rob from the middle class to give to everyone, including those who won’t work for it”G?
    If you want Medicare for all paid for by those who work for it, why aren’t you chiming in big time to your elected reps for this one?

  2. I usually love your stuff. But, there are a lot of issues with this piece. Two quick points:
    First, the land use decision that Arlington made was back in 1960. In 1960, the Arlington County Board decided that Army Navy’s property should permanently, and forever more, be used as open space. That’s exactly how Army Navy uses it. But, Arlington opted out of the state open space ordinance. In other words, Arlington wants the land used as open space, but wants to maximize the tax on it. This is hardly fair and something that your piece misses. I know you didn’t miss it intentionally, you just fell for Arlington’s talking points.
    Second, Army Navy’s strength is in the size of its membership. It has 7,200 members, nearly 75% of whom are active duty or retired military. Its mission is to support the military. Only 5% or so are civilians who’ve paid the market rate to join, so I wouldn’t say the military receive a discount. They are the bulk of the club, and they aren’t rich. The remaining 20% are sons and daughters of the military and they also do not pay an initiation fee anywhere close to $72,000. Thus, to say that Army Navy was a rich man’s club would be completely inaccurate. Delegate Alfonso knows this, but again, it is a good talking point for those who don’t know any better.

    • John Doe, I wasn’t aware of the information you gave me. I based my post entirely on the Associated Press article. I suppose I should have known. Anyway, I’ll concede that the issue is more complex than I presented it.

    • A boni-fide military brat – my impression of military golf courses is that they primarily served the officers and retired officers and not the enlisted..

      They are amenities like the “officers club” which is separate from the “enlisted club” on most bases.

      But I’m curious how golf courses in general are treated tax-wise in most places.

      Do they, in general get real estate tax breaks?

    • John Doe, you aren’t pointing out that the “75% of whom are active duty or retired military” are the upper echelons of the military, not the enlisted or even lower ranking officers, please don’t make it out to be a benefit for military members as a whole because it is far from it.

      I was just at the Arlington location for a Christmas party where we “lower ranks” had rented a room for the evening. Our group thought it would be fun to wear ugly Christmas sweaters instead of the usual formal gowns we have worn in the past to this event at this same place. When I arrived I was approached by an elderly lady in a long mink coat who said, “Excuse me, why are there so many of you in my club attired that way?” “MY CLUB” was emphasized. She and her group of friends were not best pleased that commoners were in her club.

      Let’s call it what it is, an elitist social club, not a benefit to the military.

  3. In general , I do NOT favor special treatment for people or organizations.

    In the case of the golf clubs – there is a phrase often used: ” highest and best use” and government uses that concept when they tax people’s property including those whose residences are determined to be more valuable as commercial.

    In the case of the Golf clubs.. I think you might be able to justify different treatment if they served the general public – like a park or a public golf course but clearly “clubs”of any kind that have exclusive membership at hefty fees – should pay their fair share of the tax burden.

    I must say 870,000 a year for that much acreage sounds pretty cheap to me if one membership is 70K.

    no sympathy here… subsidies for exclusive membership organizations sounds bad, bad , bad.

  4. Pretty much every other club in the DC metro area and in Virginia is taxed based on the use or income approach. In other words, the amount of money that the club generates. Army Navy pays $1.6 million. After Washington Golf, the next highest taxed club is Trump National at $266,000. Pretty much all of the rest pay between $100,000 and $230,000 per year. Congressional CC, the most exclusive and valuable club in the nation, pays $168,000. Obviously, on a golf course there are no city streets, sewers, residents who need services or kids going to school. From one standpoint, almost any tax income generated from a golf course is gravy for the locality.

  5. Pretty much every other club in the DC metro area and in Virginia is taxed based on the use or income approach.
    Obviously, on a golf course there are no city streets, sewers, residents who need services or kids going to school. From one standpoint, almost any tax income generated from a golf course is gravy for the locality.

  6. I tried to answer your question but it kept saying my comment was a duplicate.

  7. Golf clubs are primarily amenities for the well off.. and that goes for the military also.. those clubs are primarily for the officers and their families – rather than a more open membership for the public in general.

    We had a golf course down Fredericksburg Way… it’s now a commercial complex… it was simply more valuable as commercial land than as a golf course. There was no wailing and gnashing of teeth .. a few decried the loss of the Golf Course but they did not make the argument that is is “open space” and in my view – rightly so. Golf courses, in general , are not for the general public like a park would be. They are often fairly exclusive enclaves for those who are well off… the average person cannot justify the fees and dues.. and the clientele often don’t want the Hoi polloi there anyhow.

    I’m just fine with the exclusivity – just pay your own way – don’t have the common folks subsidize you.

  8. Land use and tax policy aside, there should be outrage at any club paying a GM $400K and a tennis director $300K. They must have had salary requirements based on previous work at a state university.

  9. Army Navy just wants to be taxed like all of the other clubs. That’s what fair.

    You can’t just single out one club for punishment, just because it is full of military officers.

    • ‘taxed like all the other clubs’ – ArmyNavy IS taxed like the other club IN ARLINGTON, which is Washington Golf and Country. It is beyond Arlington’s control that the other jurisdictions are fool enough to give a concessionary rate to the golf clubs in their jurisdictions, but that’s not Arlington’s problem.
      Now, as to Jim Bacon’s ‘No one is talking about exercising eminent domain to take over the land’ – Me! Yoo Hoo! Over here! Yes, these are wholly inappropriate uses in the middle of congested Arlington, where we have kids going to school in trailers and pitched battles between soccer parents and baseball parents for field space. We should take by eminent domain, pay the clubs a fair price, and send them off to play golf in Loudoun. Or Amelia. Or Prince William.

  10. Sorry, Jim, I strongly disagree. Open space should be conserved wherever possible in Northern Virginia. We have way too much development and building more housing never satisfies the demand. You just called yourself an “environmentalist” the other day and now you’re wanting to feed more natural land, of which we have precious little here, to the bulldozers. This is the land-use politics of envy, and utilitarianism, rolled into one. Also, using the so-called, “highest and best use” as the determiner, would mean death to every single park here. None could withstand it. A cynic, Oscar Wilde observed, knows the price of everything and the value of nothing. Indeed.

    Sincerely,

    Andrew

  11. I don’t think the military golf club should be treated any differently than any other golf club. I agree on that. If they are being discriminated against then that’s wrong.

    But in terms of golf clubs being a “benefit” to the public – like a park and therefore deserve some kind of consideration.. I’m not as convinced.

    When it comes to best and highest use – that term is for a non-publicly owned private facility paying full taxes – like all other such facilities.

    I’m all for the parks in NoVa.. open to the public…and paid for by the public.

    • So, you object to conservation easements no doubt. After all, they represent tax breaks for the owners with absolutely no requirement for the land to be open to the public. I’m with you Larry – let’s roll back the he tax breaks for conservation easements and charge the owners for taxes in arrears.

      • Actually I DO… for a lot of it. It’s a bit of a scam for folks who own land and owe taxes on that land where they get to keep the land and pay less taxes on it than many other folks who also have undeveloped land.

  12. Dear Lord, please let it be true. Please let me and the other member – owners of River Bend country Club in Great Falls develop that land. We’ll even pay to run water and sewer in from Loudoun. We won’t sell the land to some asshat developer, we’ll incorporate a development company and develop it ourselves.

    If you want to tax the land on its value, Jim … I assume you’ll let the owners build town homes on that land if that’s what they choose to do.

    Bacon, you Amy have just made me a lot of money.

  13. Did I read right?
    “I’m just fine with the exclusivity – just pay your own way – don’t have the common folks subsidize you.”

    Thank you and I’ll remember that for Medicare. All yours Jim Bacon.

    • V N – I actually do have thoughts about Medicare and Employer Provided that I’d share and you might find interesting – in a different thread.. maybe you can author another post on Medicare and other govt “help” to people for health insurance.

  14. Dear BR fellows,

    You lack an understanding of the land as God’s creation and that we are stewards of it during our lifetimes. The cavalier attitudes that you exhibit are to something that is not really yours. The land only exists to satisfy your ambitions for wealth. It has no intrinsic value to you, except as to how you can exploit it. This not what the scriptures mean when they say God gave dominion over the visible creation to man. In this sense the American Indians were more correct in their respect for the earth than the often nominally Christian Whites who defeated them. Christians do not worship the creation, only the Creator, but we are in awe of it in its reflection of His goodness, wisdom, and power. Everything I hear from JP is that land, and the animals and trees that live on it, is only to be judged according to how one feels about the owners; to be despised if those owners are not to one’s liking and in any case throttle up the ‘dozers. If Capitalism represents the destruction of all values, then I say to hell with it, and every other -ism, which are but idolatories, an absolutizing of, at best, partial truths. The ugliness that we have wrought in the past century shows the imbecility of our claims to “progress.” I used to wonder why God said that there would be “a new heaven and new earth,” now I think I know: We’re destroying the “first” earth. Hope you’re listening, Til.

    Sincerely,

    Andrew

  15. Wow. And I thought I was getting preachy the other day….I doubt Til H. is actually paying any attention…

    Decades of watching issues over local taxes and assessments debated at the GA or decided by court appeals have taught me one undeniable truth. The People’s Republic of Arlington is always wrong.

  16. And learn this from the greatest Virginian who ever lived; no, not Robert DuVall. https://www.youtube.com/watch?v=iLGQmkw67Vg The spirit of Yankee money grubbing is not a Virginia value, whether “native” Yankees or “naturalized.” Someone needed to overturn the moneychangers’ tables here. I take tips, by the way.

    Sincerely,

    Andrew

    • Andrew – that is a GREAT Video and I totally agree the concept of Sacred Geography – I live in the middle of it in Spotsylvania but again I distinguish between “geography” that has significance the public values – recreational, historic, cultural… AND has some level of access to – and land that is privately owned, not accessible by the general public and primarily for the benefit of the owners and members.

      Read this:

      Virginia Scrutinizes Tax-Credit Land Gifts

      Virginia tax officials, concerned about possible abuse of a program that provides tax relief to people who give land for conservation, are reviewing several land donations — including two involving Fredericksburg’s largest developer and its largest development project.

      Officials with the Department of Taxation said income tax credits claimed by individuals and companies for “conservation easements” — which generally are agreements that limit development — have skyrocketed in the past year, leading them to investigate whether the appraisals were accurate and the donations legitimate.

      The federal government, which offers tax deductions rather than credits for easements, has similar concerns. In June, the Internal Revenue Service announced that it had found many easements with dubious public benefit or overstated values and said it planned to crack down.

      http://www.washingtonpost.com/wp-dyn/articles/A30966-2004Jul31.html

      • The problem in Virginia was that the General Assembly allowed land owners to sell the credits. The other problem is access. There are a number of “parks” in Northern Virginia created through conservation easements. However, these “parks” are surrounded by private property and offer no access to the public. Nice scam.

  17. re: tax credits for “open space”, land conservation , etc

    In general, I support tax benefits for land that is protected if in doing so it benefits the public in tangible ways.

    In most cases, that means the public has access to the land – either through passive recreation like biking or hiking… and/or the land has significant value to the public – recreation, historic , cultural, etc…

    Tax credits and tax reductions on private land – that the public does not have access to – is problematical and has been and is – subject to abuse.

    Having said that -if Virginia allows credits or tax advantages for open space – even if I do not agree with it – as long as it is administered fairly to all parties -then that’s fine also. That’s why I would support a non-discriminatory approach to the golf clubs in Arlington.

    This is another one of those areas -by the way – that DJ argues both sides of the fence on Dillon. He LIKES it when the state overrules the locality on some things but on other things he wants “home rule”!!!!

    Let me mention one more thing – there are tax DEFERRALS for land – which is used by many localities in Virginia for undeveloped land not yet developed and for fixed or low income elderly who are “land rich” and “money poor” but I emphasize the “Deferred”. When that land is ultimately developed – the taxes come due.

    So you MIGHT do that for the golf courses – perhaps with caveats that they are open to the public on some days..

    but right now – it’s essentially a tax subsidized enclave for folks who are financially well off as well as those who have homes who abut that property.

    We have down Fredericksburg Way a perverse and pernicious practice when developers specifically look for set-aside land – like Civil War parks and then develop the private side perimeters into residential housing so that most of our civil war parks are now ringed by high-dollar homes – which completely changes the “view-shed” of the park itself.. A lot of that undeveloped land was in “land use” with much reduced taxes while it was held for later development… the owners of that land – did NOT put it in open space easements when that would have been the right thing to do. They, instead USED the adjacent open space as an amenity for high dollar housing.

  18. Dear Larry,

    I agree with you that “use-value” taxation can be abused. As I understand it, though, such properties as you describe, have to pay the back-taxes that they were not required to pay when they were in an Ag/Forestal district when they go to development. The fact is that Capitalistic developers use zoning- and speculative-priced taxation to bankrupt or force to sell ordinary farmers and other landowners. It is also true that other farmers and landowners look at their land as a “piggy bank” or “401k plan”. Maybe they should be “pensioned off”?

    The problem, or contradiction, that I see among pro-development folks, especially Republicans, is that they say two opposite things: 1) Zoning land for preservation without compensation is the taking of “property rights” and 2) Compensating land owners for maintaining their land as open space is “unfair” because these people are often rich to begin with. Which is it? BOTH! The pro-urban development “Conservatives” (HAH!) don’t want preservation, for the most part, except, maybe, in their enclave. The “property rights” they aim to “conserve” is the right to develop land at the “highest and best use”, i.e. the densest, that often, but not always, harms the quality of life of those already living in the jurisdiction. The problem is that “development” always favors non-residents whom the developers will bring into the jurisdiction, just as immigration favors foreigners over natives. “Development” in America is often a Ponzi scheme, of moving people from one part of “the board” to another, where the “players” (hot-shot, rich guys) contend with one another, and everyone else is a “piece” on their board. In fact, immigration is the “macro” scale supply line that ends up feeding the land development “micro” scale. Immigration is a massive subsidy to developers, retailers (at least until recently before Amazon.com) and landlords. Instead of getting rich directly off the sale of “Black Bodies” to use the current phraseology through direct-slavery, today’s “genteel liberals” get rich indirectly from building the properties, goods, and services that “Brown Bodies” use. Jes’ sayin’ That is, more or less, the political economy of Metropolitan areas in the former America. The nation as a whole and the community locally have been killed to make way for this “disjointed” mixture of human Frankensteinism

    Preserving land is like paying ransom money to kidnappers (i.e. the developers) or tribute to Huns. Every piece of land in booming areas has a “price on its (figurative) head,” and since no jurisdiction can afford to meet the demands of all the kidnappers or barbarians, they are forced, if they even want to, to adopt a “triage” system, where only select number of properties will be conserved, while the rest “get it in the neck.” The result is all that ugly, in efficient sprawl that has consumed so much of our landscape. To paraphrase Tacitus, “they make it a sprawl desert, and call it ‘prosperity.’ ” For such people to be called “Conservatives” is ridiculous. Might as well call Lenin a Conservative while you’re at it.

    Sincerely,

    Andrew

    • Andrew – that was a thoughtful response… seriously… but I would add that government – does decide “how much” in terms of a lot of things beyond just land conservation… For instance, we don’t all live next to a fire/ems station or a subway… it’s “complicated” how and why and where services, infrastructure and amenities are located or not in no small part because of how much tax money is available to do so.

      The private sector “plays” in the land-use world also… and is not restrained by some amount of tax revenues but by investor money and that money seeking to “earn” more money.

      In the middle of all of this – are people – who seek to “use” the laws and policies to improve their own personal position – and they and the investor-developers do take their case to the legislators – and do seek and receive “benefits” that are select to themselves – and often at expense to others.

      My “compass” is – for any given benefit – whether or not it actually does benefit the public who ultimately does pay for it and in the case of a private golf course surrounded by high dollar homes of people seeking a nicer “view-shed” – these are things that should be paid for by those who are getting the benefit… not the general public.

  19. Highest and best use – give me a break. If Virginia localities taxed commercial real estate at the highest and best use, it wouldn’t tax based on the capital value of rents. They would tax based on the development potential of the land based on the existing Comp Plan and zoning classification for the parcel.

    • Well, they “tax” based on “comps”… which is comparable property. It’s the core of the assessment process. They look at your property and then they go look at other property that sells that is “like” yours and then your assessment is aligned to the sales price of properties like yours.

      So if your property is worth less for it’s current use than it might be for a “higher” use – it may be assessed at the higher potential use.

      That’s how some residential – ends up Commercial… and how land and properties adjacent to other developed or developing property – is assessed at higher values.

      This is how.. many golf courses that get surrounded by other developed property – end up – converted into similar developed property – unless Govt decides to preserve it – for everyone… not just some… i.e. a Public purpose funded by tax dollars from everyone.

    • But TMT … that would constrain the land speculators working in concert with the Boards of Supervisors from windfall profits. Who then would contribute to county board members and state politicians? Ordinary people?

  20. here’s another “take” on development:

    Celebrate Virginia South property up for auction to pay off taxes

    Silver Cos. had grand plans when it made a presentation to the public about its proposed Celebrate Virginia South project in 1999.

    It envisioned museums, hotels, restaurants, shops and golf courses springing up in the land across Fall Hill Avenue from Central Park in Fredericksburg.

    Some things, such as the hotels, were built, as were things not originally envisioned, including Wegmans, the Fredericksburg Expo & Conference Center and The Haven at Celebrate Virginia Apartments. But there were attractions that never materialized: Kalahari Resort, former Gov. Doug Wilder’s proposed slavery museum and a baseball stadium, among others.

    Today much of Celebrate Virginia South’s commercially zoned property is still undeveloped, and 20 parcels totaling 224 acres are headed to the auction block to satisfy more than $23 million in delinquent Fredericksburg taxes and Community Development Authority special tax assessments.


    Development has progressed more slowly than expected, however, which means owners of the undeveloped land have been saddled with the lion’s share of the special assessments collected to pay the CDA bondholders’ interest and principal payments. Those assessments are levied twice annually on top of city property taxes. Including interest and penalties, they make up about $19 million of the $23,102,187 owed, Wood said.

    http://www.fredericksburg.com/business/local_business/celebrate-virginia-south-property-up-for-auction-to-pay-off/article_4566683b-bd46-5695-a943-b380ca4dfcdd.html

    so they did form a CDA to pay for the roads and other infrastructure and that added a supplementary tax to the existing property tax – which – actually made development on that property more expensive than on other properties not in the CDA and in the end… other properties got developed and this one – not.

    So now the city is selling these properties to get the back taxes.

    so who really benefits from this at this point?

  21. and if you want a story about a golf course closed for redevelopment:

    ” What could have been
    I came from out of town to play this course. What a magnificent layout, this course has the potential to be one of the best in the state. Unfortunately it will never happen as i learned it will be closing permanently for the redevelopment of the land supposedly for housing what a shame. If you want to play it one last time or to experience a great track you better do it quickly. The tees are ok, the fairways are in excellent shape, but the greens are basically horrendous. Still all in all the course is a treat it is just a shame I could not have experienced it in better shape today or going forward.

    https://www.tripadvisor.com/ShowUserReviews-g60824-d493036-r523389430-Cannon_Ridge_Golf_Club-Fredericksburg_Virginia.html#

    ” Cannon Ridge tried to make a comeback in 2016 after a multi-year closure, but it just wasn’t meant to be for the demanding Deane Beman/Bobby Weed design on the outskirts of Washington D.C. Built upon a historic Civil War site in 2003, Cannon Ridge tried to piggy back on that theme with Civil War plaques spread throughout the routing. ”

    Okay – so the point of posting this is to demonstrate that a Golf Course per se is not valued necessarily as “open space” unless there are people around it who value it as open space – and most often the course and the houses around are not open to the public. The who thing is an amenity for some people

    I don’t have a problem with that – or ANY development that is built for the pleasure and enjoyment of those who are paying for it.

    What I DO have a problem with is ANY development that is subsidized with public dollars that is private and not for the use of the public.

    As the person who blogs here and often gets labelled as a “liberal”, “socialist”, or “snowflake”… I find it totally odd for me to have this position and for those those who portray themselves as “conservative” as being in favor of taxpayer money being spent to preserve “open space” that is primarily for the enjoyment of private members – not the general public.

    But HEY..who would have thought principled Conservatives would be in favor of tax cuts funded from deficit spending… so the world has obviously changed!!!

Leave a Reply