On Tuesday, City Manager Jim Parajon unveiled a plan to catalyze a two-phase development of the former Potomac River Generating Station in Old Town North with a $135 million city investment.
The $135 million, 30-year tax increment financing agreement would be funded by projected future tax revenues at the 19-acre mixed-use site through the creation of a Community Development Agency. Under the proposal outlined to City Council, Parajon said the $135 million investment would spark more than $2 billion in private sector investment and generate more than $770 million in tax revenues.
“This investment would unlock roughly a $2 billion value that the developer would be obligated to create out [of] 2.5 million feet of mixed-use development,” Parajon said. “This would not involve any pledges of existing taxes. This would pledge new taxes, new revenue that the developer creates.”
The power plant at 1300 N. Royal Street closed in 2012, and HRP Group bought it in 2020. The developer plans to convert Block A (65,000 square feet) — with a riverside view of the Potomac — into a 70-foot-tall arts and cultural center with retail and office uses. With building heights capped at 17 stories, two large condo and apartment buildings with rooftop open space are proposed for Block B (415,000 square feet), 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, with rooftop open space proposed as well.
In all, more than 1,000 housing units are proposed, including 160 affordable units.
“It’s a large site that has significant public infrastructure necessary, and it’s a very difficult site to redevelop,” Parajon said. “$1 billion in gross incremental tax revenues are estimated on this site. That is new gross incremental tax revenues. Those are dollars that the city does not have today. Those are dollars that can help pay for city services and programs that the overall community benefits from.”
The site also requires significant soil remediation.
City Council will decide in June whether to back the proposal. If it moves forward, the city estimates that the first phase — construction of Blocks A, B, C and a portion of open space — would be completed by 2030, and a second phase covering Blocks D, E and F, construction of a pump house and open space would be completed by 2034.
Mayor Alyia Gaskins said the plan will need community support.
“To do what we want to do for our community and to provide services that we keep hearing about throughout our budget … requires us to come together to think of creative ways to spur new opportunity to generate those resources, to do those things,” Gaskins said.
Vice Mayor Sarah Bagley said she supports the plan.
“This is action taken to keep this moving, to accelerate development and to create housing and commercial activity that would otherwise be stalled indefinitely,” Bagley said.
Under the proposed agreement, HRP Group would be responsible for building the public infrastructure, demolishing the former power plant and completing the site’s environmental remediation.
The city has made similar financing agreements for the residential development at 5001 Eisenhower Avenue and the former Landmark Mall property.
HRP Group will share a development update for the former power plant site at a virtual community meeting via Zoom on Monday, May 4, from 6–7 p.m.
