A funding plan to facilitate the redevelopment of the former Potomac River Generating Station site in Old Town North will be on Alexandria City Council’s agenda this week.
City Council will receive a briefing on the funding plan Tuesday (June 9), then hold a public hearing and consider approval of the agreement on Saturday (June 13).
The 30-year $135 million financing deal proposed by City Manager Jim Parajon would go toward public infrastructure needed for the development of the former power plant at 1300 N. Royal Street. The funds, proposed through revenue bonds, would be repaid from projected future tax revenues at the 18.87-acre mixed-use site through the creation of a Community Development Agency. Up to $70 million of the funds would go toward the development’s first phase, and the remainder would be allocated to the second phase.
The estimated $290 million in public infrastructure needed for the development includes public open space, roadway and street improvements, utilities, pedestrian and bicycle facilities and other site readiness improvements. The city says about 2.5 million square feet of mixed-use development could produce about $1 billion in tax revenue over the 30 years of the funding deal. After infrastructure costs, that would leave the city with a net gain of about $775 million.
According to a city staff memo:
The Revenue Bonds are proposed to be repaid from a portion of eligible TIF revenues (real property tax, retail sales and use tax, meals tax, and transient lodging tax) generated from the site. Other tax revenues generated by the redevelopment (personal property, business tangible, business and professional license, utility, real estate transfer and other miscellaneous taxes) would not be pledged to repay the Revenue Bonds and will remain available to the City’s general fund. To further strengthen the financing structure, the City intends to “backstop” the TIF revenues with special assessments to be imposed on the taxable property within the CDA district. The special assessments will provide a secondary source of funds to cover the debt service paid on the Revenue Bonds if eligible TIF revenues are insufficient to timely pay such debt service.
After the power plant closed in 2012, the city identified the site as a mixed-use development opportunity in the 2017 Old Town North Small Area Plan. Developer HRP Group bought it in 2020 with the intent of turning it into a mixed-use district.
The site will require extensive remediation after leaky storage tanks bled pollutants into the soil. The first phase of the development will involve deconstruction of the power plant as well as environmental remediation followed by construction of Blocks A, B and C. The second phase will continue site remediation and construction of Blocks D, E and F.
Deconstruction could begin as early as next year and is expected to take up to 20 months.
On June 2, the Alexandria Planning Commission recommended approval of a concept plan for the coordinated development district as well as development special use permits for Blocks B and C and parks on the waterfront and rail corridor. The Planning Commission also endorsed a plan to subdivide 1300 N. Royal Street into three large lots.
HRP Group plans to convert Block A (65,000 square feet) into a 70-foot-tall arts and cultural center with retail and office uses, with a riverside view of the Potomac River. The plan for Block B (415,000 square feet) calls for two large condo and apartment buildings with rooftop open space, with designs inspired by the Flatiron Building in New York City. Retail and condos in Block C (635,000 square feet) are also capped at 17 stories.
Under the proposed agreement, the developer must begin construction of the first phase by Dec. 31, 2027 and complete it by the end of 2030. The second phase must begin by Dec. 31, 2030 and be completed by the end of 2034. The city manager would have discretion to extend the deadlines for up to two years.
