
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, December 11, 1994                   TAG: 9412120066
SECTION: VIRGINIA                    PAGE: B8   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: CENTREVILLE                                 LENGTH: Medium

UNCLE SAM WANTS TAXES BACK ON SPY BUILDING

THERE'S BAD NEWS and there's bad news for Fairfax County: It won't be seeing any tax revenue on a huge new office complex. And the powerful owner wants a tax refund.

First, Fairfax County got the bad news that it would not be receiving more than $1 million in annual property taxes on a new Rockwell International Corp. office complex.

That was because the federal government revealed in August that the $310 million complex actually was the new headquarters of the National Reconnaissance Office, the nation's spy satellite agency, and was therefore tax-exempt.

Now, the federal government wants the county to return some of the money paid in taxes during the four years the property was being developed. Defense contractor Rockwell paid $1.7 million, with the spy agency providing the money.

Rockwell filed a lawsuit against the county in May in Fairfax County Circuit Court, claiming that the county overvalued the 68-acre tract five miles south of Dulles International Airport. The government, which paid Rockwell $1 for the complex Thursday, has decided to pursue the issue.

County officials said Friday they fear the federal government ultimately may try to get back all of the $1.7 million.

``That would be the absolute height of arrogance,'' said Supervisor Michael R. Frey, who represents the district where the complex is being built. ``Someone is smoking something if they think that will happen. They are the ones who came up with this crazy scheme.''

County supervisors said, however, that it would be reasonable to refund some of the money to the federal government if Rockwell truly was overtaxed.

``That would be fair,'' said Supervisor Elaine N. McConnell. ``They should have the same break as any of the other property owners out there.''

Rockwell's suit said the county's 1994 assessment should be reduced from $80.2 million to $32 million, which would result in a 1994 tax bill of $435,000 instead of $1.1 million.

The suit also asks for a unspecified reduction in the county's property assessments from 1991 to 1993. No trial date has been set, and county officials and attorneys for Rockwell have been negotiating.

Katherine Schneider, a spokeswoman for the National Reconnaissance Office, said she could not comment on the tax appeal. A November report by the Pentagon and the CIA on the construction project said federal officials ``are examining the legal issues affecting refunds of real estate taxes paid in the past.''

The four-tower, 1 million-square-foot spy satellite headquarters is scheduled to open in early 1996. About 3,650 people eventually will work there.

The National Reconnaissance Office designs and contracts for multibillion-dollar spy satellite systems that take high-resolution pictures of intelligence targets from the sky and eavesdrop on electronic communications.

by CNB