A new mall comes with a new deal

By Junelynn Tran

HAMPTON, Va. -– Shoppers in Hampton, Va., got more than a new mall in March 2010. They also received a new tax along with each purchase made at Peninsula Town Center.

A 0.5 percent Facility Charge Transaction Fee (VAFAC) is added to each purchase made at the mall’s retail stores and restaurants. The tax is charged by Mall Properties Inc, the owner of the mall, to pay back a 30-year $92.5 million bond used to build the mall. It went into effect on Jan. 1 2010.

"Mall Properties agreed to tax itself because it didn’t want to place a debt burden on the citizens,” said Randy Gilliland, a Hampton City Council member. “The tax isn’t a part of Hampton’s tax revenue, only the purchases.”

The tax is new to Virginia and is collected by the Community Development Authority, a committee by the Hampton City Council used to issue bonds for public expenses and oversee special taxes.

The VAFAC tax is added to Virginia’s state and local tax of 5 percent. It allows the public to use the mall’s facilities and services for free, such as free parking. An example of the tax is $1 for every $200 spent.

Although the City Council believes the tax is beneficial toward the redevelopment of the mall, there has been customer opposition toward the small fee.

Ashley Darby, 20, a Hampton shopper, says the charge is unexpected and unfair. “Why should I have to pay for something at someone else’s expense?” Darby asked. “No one said there would be a new tax.”

Vincent Mastracco Jr., an attorney with Kaufman and Canoles, a law firm that oversee the redevelopment process, disagrees. He said business cards were given out earlier this year to let consumers know about the charge.

Peninsula Town Center is a new open-air mall featuring office and residential space above its retail stores. Residents that live in the apartment complex are not charged any additional fees like the VAFAC tax.

Raffaele Allen, residential specialist at The Chapman Apartments at Peninsula Town Center, says the tax is accounted for in the maintenance fee, which the residents know about.

The Peninsula Town Center was built to replace the former Coliseum Mall, which was demolished in 2007. For three years, Hampton shoppers have had to travel to other surrounding cities to fuel their shopping needs.

With an area of 1.1 million square feet, Peninsula Town Center has more than 50 stores and restaurants, some of which are new to the area, such as Five Guys, Chipotle and shoeWoo. The mall expects more than 20 additional stores and restaurants to open soon, including a dine-in movie theater called CinéBistro. It holds 12 restaurants, 160 residential units and more than 100 retail stores, as stated on the Peninsula Town Center’s website.

Macy’s, JC Penney and Barnes & Noble are stores that were a part of the original Coliseum Mall. They were either relocated to another part of the mall or restructured.

The mall will also feature Bryant & Stratton College above Barnes & Noble. It will become the third campus in Virginia, covering 45,000 square feet. It will begin classes in September 2010.

Even though the tax money goes towards the repaying the bonds, money collected from the surrounding parking meters are given to charity. The Peninsula Town Center Community Foundation includes scholarships and a Charity for Change Meter program. Shoppers can chose to park in the free parking garage, free parking lot or donate to charity by parking next to a meter.

Hampton shoppers can either enjoy the amenities Peninsula Town Center has to offer or stay dissatisfied with the tax. Regardless of how they may feel, the tax is here to stay for at least 30 more years. For more information, visit www.peninsulatowncenter.com.