Stafford County will continue to work for the next two months with the owner of Aquia Town Center to “improve performance” on a memorandum of understanding that provided tax incentives to develop the 25-acre property.

On Tuesday evening, the board voted immediately after a closed meeting to defer for 60 days a resolution to rescind the memorandum of understanding with Mosaic Partners Realty that was signed in May 2015.

The agreement authorized the county to return to Mosaic up to $6.25 million in tax revenue from the center’s businesses.

Since no development has occurred on the property, nothing has been paid to Mosaic, but Stafford County staff in January recommended that the board rescind the memorandum of understanding because the Bethesda, Md.-based company has made “no substantial performance in furtherance of [the agreement].”

Aquia District Supervisor Cindy Shelton said in an interview that board members asked for the issue to be brought forward because they want to open up negotiations with Mosaic.

“I don’t know what it is [that has stalled development of the town center],” she said. “We’re guessing. And that’s why this was brought to a head.

“What is it we can do? All our ideas are not having any fruit.”

Shelton said the board and staff continued to negotiate with Mosaic behind the scenes throughout 2018 and that she hopes the decision now to bring the matter to the public’s attention will result in action.

“We would just like to see some performance,” she said.

The area in North Stafford used to be home to a vibrant shopping center anchored by a Shoppers Food Warehouse. But when the grocery store left in 2004 for Stafford Marketplace, business took a nosedive. The Regal Cinemas movie theater was demolished last year and the remaining piles of gravel and concrete have not been removed. The only tenant is a Rite Aid pharmacy.

During public comments at the board meeting, Aquia residents described the abandoned shopping center as a blight, an eyesore, a wasteland and an embarrassment to Stafford County and asked the board not to take away incentives to develop the property.

In 2016, Mosaic proposed a plan for a 160,000 square-foot shopping center anchored by a Harris Teeter grocery store. Those plans were derailed when Harris Teeter and another major tenant pulled out.

On Tuesday, Mosaic partner Eron Sodie said he couldn’t name the second major tenant but said it was “one we all would have been happy with.”

“We’re sorry we’re at this point three years later,” Sodie told the board. “We’re sorry we haven’t been able to deliver the plan we envisioned.

“It’s been a tough retail environment. We’re dependent on the anchor to start the development. We can’t deliver what we envision without the anchor and that element is outside of our control, although we’re trying.”

Though the tax incentives to be paid to Mosaic amounted to $6.25 million in the original agreement, the agreement also included a 5 percent escalator, to balance loan interest Mosaic would pay.

When Deputy County Administrator Mike Smith presented the issue to the board in January, he said the amount Mosaic would receive is now $7 million, based on the escalator, which took effect on Jan. 1, 2016.

He said the agreement is a liability to the county against future taxes.

Garrisonville Supervisor Mark Dudenhefer suggested at the January meeting that the escalator means the county would actually be compensating Mosaic for taking longer to develop the property.

But on Tuesday, Sodie said that he and his partner have no incentive not to develop the property and that the lack of progress has caused significant financial hardship for them.

“We care 100 times more than anyone about this,” he said. “We have skin in the game.”

He offered to erase the escalation on the incentive to remove the risk that the passage of time could adversely affect the county.

During public comments, Barry Hill, the general manager and technical director of Stafford Soccer, proposed an indoor sports arena as an anchor tenant at Aquia Town Center.

He said demand for indoor soccer programs has increased every season and the organization cannot accommodate the demand. He said a sports arena would draw families for sporting events who would then stay there to eat and shop.

Paul Milde, former Aquia District supervisor, said the board has already done everything else possible to incentivize development at the town center, including creating a new zoning category for mixed-use developments that combine residential and commercial.

An apartment complex opened in 2016 next to the town center site, but retail hasn’t followed.

“The 9,000 people who live in Aquia Harbour will be very disappointed if the board takes away one of the few things you can do to redevelop that mall,” Milde said.

Jo Knight, owner of Aquia Realty, said reviving Aquia Town Center is in the best interest of the entire county. It’s often the first thing potential new residents and commercial investors see when they come into Stafford from the north on Interstate 95, she said.

“You cannot believe the people who’ve told me they would prefer to wait and not do business here now because they did not feel it would be a good investment,” Knight said. “If [the town center site] looks like a war zone now and it’s in a prime location, [businesses] can’t see coming here.”

Another Aquia resident said she worried about the impact of the county going back on its word.

The board did not discuss the town center issue at the meeting, but immediately after coming out of a closed session, members unanimously approved Shelton’s motion to defer the decision for 60 days.

Adele Uphaus–Conner: 540/735-1973 @flsadele

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