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Hotel Heron, a proposed development at 699 Prince Street, image via Monarch Urban

Local labor representatives have come out in force against potential city funding in the development of the Hotel Heron in Old Town.

A proposal spearheaded by the Alexandria Economic Development Partnership (AEDP) would have the city take some of the tax revenue generated by the Hotel Heron project at 699 Prince Street to pay the project’s bond trustees.

Interior demolition was already underway when the pandemic scared off hotel investment, but an AEDP report indicates that with the city’s loss of hotels over the last few years there isn’t enough of a local market to meet the potential tourism demands if and when that rebounds. A report from AEDP to the City Council said the investment was low risk because the only city money put into the project would be taxes generated from the hotel.

During initial City Council discussions earlier this month, city leaders seemed amenable to the project, although wanted to see progressive standards set and compensation adequate enough for laborers and hotel workers to afford to live in Alexandria. A project presentation also boasted that it would create 19 full-time jobs and 90 part-time jobs.

In the days since the meeting, organizers from various labor groups around Alexandria told ALXnow they expect city involvement in financing the project to come with stronger guarantees of fair pay and treatment of employees.

“The Council should oppose this project,” said Bert Bayou, Director of African Communities Together. “As an organizer of African immigrants in Alexandria, I believe that this money should help keep people in their homes. Creating bad jobs does the opposite, exacerbating the housing crisis and leading to further poverty and hardship.”

The push for higher wages comes after more than a year of protests against evictions following job loss during the pandemic.

“Living in Alexandria is expensive — even if you are making decent wages,” said Southern Towers tenant and organizer Sami Bourma. “If the Council approves this project, they should be ashamed of themselves. They should be standing up for workers like me and creating jobs that help us, not a bunch of part-time jobs that families can’t survive on.”

“Approving this project would be an insult to Alexandria workers,” said Sam Epps, Political Director of UNITE HERE Local 25. “How can the Council justify using taxpayer dollars to subsidize a project that creates just nineteen full-time jobs? Workers coming out of this brutal pandemic deserve better.”

Stephanie Landrum, president and CEO of AEDP, said the project will not only be a sorely needed revenue boost for Alexandria, it will also be a showpiece historic renovation. The building was previously the Hotel George Mason at the entrance to Old Town.

“Tourism is a vital part of Alexandria’s economy,” Landrum said. “Supporting the renovation of a historically significant building at such a prominent location in our historic district today and positioning ourselves to meet and even grow hotel demand as it rebounds is an important tactic in Alexandria’s pandemic recovery. This project also has returned the building to the City’s real estate tax rolls for the first time in at least a generation. The previous office tenant was a nonprofit with a federally-granted tax exemption.”

Landrum said the project was first approved several years ago and demolition started in March 2020, but the developers approached AEDP for help with a funding shortfall caused by the pandemic. The proposed city’s financing also takes up a relatively small portion of the project’s overall cost, so an increase in pay for staff would require the developer to secure funding elsewhere — a prospect that seems unlikely given the need to turn to the city for help in the first place.

“Those challenges continue, which means that any increase in cost, increases the gap needed to be closed by an equal amount,” Landrum said. “Without identifying additional capital or resources, substantive cost changes make the project not feasible.”

Landrum also said the hotelier was chosen as a partner in part because of their paid benefits to employees, wage transparency, opportunities for growth, and their other pro-worker policies already in place.

In regard to public funds being used for the project, Landrum said there’s no city policy in place that requires labor agreements when public funds are used.

“The Council will be discussing this as they consider their own construction and investment projects, as they do not currently require labor agreements, and we would expect that once a policy is in place for the City, it logically will extend to projects they chose to financially participate in,” Landrum said.

Landrum also said AEDP worked with city staff and the developer along previously established city requirements and changing those last-minute as the project comes forward could put it in jeopardy. The explanation is a little complicated, so it’s presented in full below:

For the Hotel Heron project, AEDP, the City staff, and the developer engaged with the state and negotiated this deal according to the terms and requirements that are currently in place. Meaningfully changing a policy for an approved and welcomed project has created a challenging situation that has put the viability of the project in peril. Our role is to explain the impacts of these changes, advocate for the approval of this great project on its merits and work with our elected leaders to set new policies that are clear for new projects moving forward.

To your question about feasibility, labor requirements, prevailing wages, collective bargaining agreements all have implications on a project’s bottom line, so any business or developer needs to understand those costs at a project’s inception to be able to adequately budget for them.

Ultimately, there are no provisions at the state or local level that require labor agreements to qualify for this incentive program. Under Virginia law, the City does not have the power to set its own prevailing wage, but we do support efforts to create one at the state level, as outlined in the City’s legislative agenda for the upcoming year. The conversation about including this requirement is under discussion because we are considering public investment- as explained above, and discussed with recent projects like Landmark Mall, staff’s role is to provide information about the feasibility of making changes, and to outline any costs or implications those changes might have on the project, so that Council can make informed policy and project decisions.

If the City Council wishes to make labor agreements a condition of our participation in this state incentive program, it is up to council members to follow the usual decision-making process to hear from City stakeholders, debate the pros and cons of that decision, and adopt and communicate any resulting requirements. And, of course we would follow applicable laws, regulations, and requirements when pursuing projects, as we currently do.

Alyia Gaskins was the City Council member who first raised questions about fair compensation for employees during the City Council discussion and said she hasn’t fully decided how she will vote but treatment of workers on the project will play a role in her vote.

Since my first Council meeting, I have raised issues from wage theft to worker protections to how economic development benefits small businesses. Unions are about more than wages and benefits they are also about working conditions and the right to have discussions about issues that impact you. The reason I am so focused on preserving the rights of workers is because I believe they are in the best position to articulate what is fair compensation. I don’t presuppose my judgment on these cases so I cannot answer the question about how it will impact my vote. We have time before Saturday. I look forward to working with the developer to find a solution. Ultimately, we have to get to a point when we have greater predictability for all in the development process.

Project zoning and the city’s financing role are scheduled for a vote at the City Council meeting tomorrow, Saturday.

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Morning Notes

Jones Point Park live-action roleplayers fight with foam swords, create community — “It is Sunday at Jones Point Park, and today is the day Marcus finds glory on the battlefield.” [Alexandria Times]

Yunnan by Potomac Noodle House honored on 2022 Yelp 100 list — “The Alexandria restaurant is one of the top 100 restaurants in the country, according to Yelp.” [Alexandria Living Magazine]

Penthouse unit with exposed brick lists for $1.4M in Alexandria — “Would you pay $1.4 million for this penthouse unit? This residence features industrial loft design and rooftop views of the Potomac.” [Patch]

Carr pitches redevelopment of entire block in Alexandria’s Old Town North — “Carr Companies is exploring a major redevelopment in Alexandria’s Old Town North.” [Washington Business Journal]

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The Landing in Potomac Yard, photo via The Landing/Facebook

Senior living facility The Landing (2620 Main Line Blvd.) in Potomac Yard is scheduled to open sometime within the next month or two, and with it comes a handful of the rare affordable assisted living units.

Last week, the city announced that seven affordable one-bedroom assisted living units will be available in The Landing.

“An Auxiliary Grant provides financial assistance to help cover the cost of room, board, and assistance with activities of daily living for low-income aged, blind, and/or disabled individuals,” the city’s press release said.

Staff at The Landing said the project is planned to open sometime in February or March and is currently taking reservations.

The Landing will be a mix of independent and assisted living units in the heart of the planned redevelopment of the Potomac Yard neighborhood. The development will include a spa, salon and fitness center.

Photo via The Landing/Facebook

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A group of activists pushing back against city plans to overhaul the Torpedo Factory Art Center have accused city leaders of working with developers to astroturf a pro-overhaul faction, but city leaders said the goal wasn’t to mislead.

A Change.org petition with 7,694 signers at time of writing has become an online hub for those opposing the city’s plans to reduce artist studio space in the Torpedo Factory and replace it with alternative arts spaces (like glassblowing) or restaurant space. A Freedom of Information Act (FOIA) request made public by the petition organizers highlighted city emails with and about the “Torpedo Factory for All” initiative spearheaded by developer Route 66 Ventures — one of the developers pushing to lead the overhaul.

The Torpedo Factory for All page describes the initiative as being led by “Torpedo Factory for All is a group of Alexandrians who are excited about the potential for a vibrant and sustainable Torpedo Factory Art Center.” The page makes no mention of Route 66 Ventures.

The emails show that city leaders were aware of the distinction. In one email from City Manager Mark Jinks, he pointed out that the Torpedo Factory for All initiative was not the same as the community-based Waterfront for All it was trying to imitate.

“While the marketing message is similar, in my opinion, the difference between ‘Waterfront for All’ and ‘Torpedo Factory for All’ is that the former was largely a community-based organization and the latter is driven largely by for-profit interest(s) including the largest single property owner on Union and lower King,” Jinks wrote.

Internal newsletters and email indicated that the city and Diane Ruggiero, director of the Office of the Arts were facing confusion about whether the Torpedo Factory for All was a city-led initiative. According to one email titled “DRAFT Talking Points for Torpedo Factory for All Campaign”:

While my recommendation overall would be to not engage in a discussion about this, I’ve edited the talking points. Please do not mention Rt 66. We don’t have any information on that and I don’t want us to be part of what could be seen as a rumor.

I am continually asked about this. My answer is that I don’t know who is behind it or what they’re trying to do. We agree that the Torpedo Factory should be for everyone and of course we agree with the statistics – they’re from our reports. Right now, staff is focused on implementing the vibrancy and sustainability plan and on gathering the information needed to go to council in December. When they ask a follow up, I repeat the above statement.

I know it’s hard to be on the front line, but we can’t get dragged into this.

The petition organizers said in an update that this shows the city knew who was behind the campaign and were in communications with the organizers — and emails show that city staff did have communications with a representative from Route 66 Ventures — but opted not to share that information with the public:

Some of you may remember the “Torpedo Factory for All” campaign that appeared out of nowhere last summer and disappeared just as quickly.

At the time, the staff at the Office of the Arts claimed no knowledge of this project. However, these emails obtained via the FOIA (Freedom of Information Act) show that they not only knew about it, they were in communication with the organizers, and they conspired to lie about it to the artists whose future might be impacted by such a campaign.

Ruggiero told ALXnow she didn’t have concrete information about who was organizing the Torpedo Factory for All initiative and didn’t want to misinform the public.

There were a lot of people (including artists) who thought TFFA was a City initiative (or that we were involved, which we were not) and my team was interested in clarifying it. My request to not mention Rt 66 was that we didn’t have any specific information connecting them to the Torpedo Factory For All (TFFA) initiative. We thought they might be involved (especially since there were signs in their office space), but there was no information on the website or signs that provided a point of contact or anything mentioning Rt 66 and I was hearing from others that there was a “community group” involved so if someone asked why we mentioned Rt 66 we didn’t have anything to point to.

Since we couldn’t be 100% sure, I felt it was best to not mention them in our FAQ in case we were wrong. It was not in an attempt to hide anything.

Alexandria’s City Council recently approved a set of guidelines for potential changes at the Torpedo Factory. Of note: changes at the Torpedo Factory will also be the topic of the next Agenda Alexandria discussion scheduled for Monday, Jan. 24.

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Rebuilding Together DC Alexandria has been chosen to receive a $1.6 million grant to reduce housing related hazards to 120 homes in the city.

RTA is one of  three nonprofits in Virginia to get the multi-year funding from the U.S. Department of Housing and Urban Development’s $104.7 million package. There were 60 similar organizations that were awarded revitalization funds.

“By providing these grants, HUD makes it clear that ensuring healthy and safe homes for communities across our nation is a priority,” HUD Secretary Marcia L. Fudge said in a release. “HUD is working every day to keep families safe from home health hazards like lead paint because for many Americans, their home is a primary determinate of their health, and that is why HUD is committed to protecting families from these hazards and to providing healthy and sustainable housing for all Americans.”

RTA was founded in 1986, and is among the 130+ Rebuilding Together affiliates. The nonprofit has dedicated more than $8.8 million toward local revitalization efforts to homeowners in need, and 28,000 volunteers have donated their time and energy on more than 2,200 projects.

Via RTA/Facebook

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Proposed development at 765 John Carlyle Street and 1900 Eisenhower Avenue, image via Perkins Eastman

A towering project that will bookend Eisenhower Avenue is going through some design changes as it heads through the city’s approval process, but the changes are facing objections from City staff.

The changes are scheduled for review at the Carlyle Design Review Board on Thursday, Jan. 20. Developer Carlyle Plaza LLC has proposed several architectural changes for the project, two connected towers at 765 John Carlyle Street and 1900 Eisenhower Avenue, but staff said virtually all of these changes are a downgrade from what was approved in November.

According to the staff report:

With this request, the Applicant proposes a number of revisions to both towers, including but not limited to changes in height, scale/proportionality, materiality, and general architectural character. The amendments to the approved design for each tower are discussed in more detail below. The changes proposed are not supported by Staff.

Staff outline several objections to the changes in the report, most notably the removal of a distinctive extended open parapet at the top of the northern tower.

“The elimination of the extended open-parapet has visually eliminated an additional perceived floor of the North Tower,” the report said. “Mechanical equipment is no longer screened to the former degree, and the trees at the terrace level have been eliminated.”

Carlyle tower design change, image via Perkins Eastman

Several less notable but, according to staff, architecturally objectionable changes are also made to the south tower. The report said the changes remove depth from the facade and “signature architectural features.” To the untrained eye the changes to the South Tower seem minimal, but the report said the changes result in a “boxier expression” that gives the building a less rich texture.

Carlyle tower design change, image via Perkins Eastman

Overall, staff said the changes from what was approved detract from the building’s design:

Staff find the changes to be significant alterations from the approved design. Chiefly, the loss of the strong vertical expression of the South Tower and the visual loss of three floors with the North Tower result in an undesirable urban design and architecture.

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2525 Mount Vernon Avenue, photo via Google Maps

Redevelopment plans are finally moving forward for an office building in Del Ray, the Washington Business Journal first reported.

Bonaventure Realty purchased 2525 Mount Vernon Avenue, which currently houses the Alexandria Department of Community and Human Services (DCHS). DCHS will be moving to the West End in 2023.

“On Friday, the developer submitted a development concept plan for a new project at 2525 Mount Vernon Ave., bound by E. Mount Ida Avenue and Stewart Avenue, calling for a redevelopment of the older office building there for mixed-use,” the Washington Business Journal reported yesterday. “Plans show the roughly 1-acre building and parking lot would be redeveloped with a four-floor, 88,500-square-foot building with ground-floor retail and 78 apartments above.”

Bonaventure Realty leaders previously said they were waiting for the city’s plans for the area to move forward before redeveloping at 2525 Mount Vernon Avenue and other nearby properties.

Photo via Google Maps

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While only in the conceptual phase, the Landmark Overlook development would transform the corner of South Wilkes Street and Stephenson Avenue into a mixed use property with hotels or office buildings, two-level stacked condominium units, apartments and retail. (Image via BCT Design Group)

A development near Landmark Mall was deferred at the applicant’s request after the project was hammered by City Council for its lack of affordable housing and design issues.

Things had been looking positive for West End Associates LLC’s Landmark Overlook project — spread across 5901, 5951, and 5999 Stevenson Avenue and 2 South Whiting Street — as it headed into the City Council on Saturday. The project was approved by the Planning Commission and city staff.

The developers were seeking an amendment to the Landmark-Van Dorn Small Area Plan to change the primary use of the development from office and retail to primarily residential, allowing the developer to increase the proposed floor area ratio and construct new multifamily residential buildings.

But the project faced stern pushback from the City Council on everything from traffic impact to affordable housing. There were areas where the project met the letter of the law but was unsatisfying in ways that, reading between the lines, gave the Council less reason to be lenient in other allowances.

“There’s no affordable housing here, nevertheless they’re giving us money to compensate, but that isn’t the same,” City Council member Redella “Del” Pepper said. “All of these units and not one of them could possibly be affordable housing? Now we can’t ask for that, but it doesn’t mean how disappointed I am that that’s how they’re running it. I haven’t felt that this is a very thoughtfully done plan, frankly.”

There were also concerns from the Council that the city is moving forward with individual Landmark-adjacent plans without having a clear idea of what the city wants the area to look like.

“I think what we have here, and what I’m worried about with anything around Landmark, is that everyone rushes to make their developments pop before we finalize Landmark and the network around Landmark, especially on Duke Street,” said City Council member John Chapman. “We’re talking about something pretty significant. To me, my response would be: why not push some of this work and this development off until after May and we have a better sense of what we’re doing with that area and this intersection? Why are we letting the cart jump before the horse gets rolling?”

The applicant, represented by Kenneth Wire, said the applicant would be happy to convert the dollars into some affordable housing units in the multi-family residential parts of the development.

“I’m requesting a deferral unless I’m completely misreading the six of you,” Wire said.

The City Council approved deferral until the January meeting to allow staff and the developer to put something together more in line with the city’s goals.

“We understand private market interest and profitability, along with businesses coming in and why this might be an advantageous time for them to move forward with all sort of plans, and they have every right to do that under the law,” said City Council member Mo Seifeldein. “We take no issue with that. We want to work with you, but you have to be willing to work with us. We consider your margins and the market, but you have to consider what we do.”

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(Updated at 1:45 p.m. on Jan. 5) The new owner of 628 King Street is shopping the property around, and wants it to remain two retail spaces.

Douglas Development now owns three of the four buildings at the intersection of King and Washington Streets. The D.C.-based commercial real estate firm owns the adjacent properties at 700 (Lululemon) and 701 King Street (the now-closed Le Pain Quotidien), as well as 610 King Street (Anthropologie), 614 King Street (H&M) and 615 King Street (the former Walgreens) and 700 King Street.

Douglas Development bought the property on Dec. 10, and representatives of the firm say there has been some interest from prospective tenants, although nothing definite. The building was previously owned by the family of Wellington Goddin, and was appraised for $6.2 million last January.

GAP Inc. has leased the three-level, 20,000 square-foot building at 628 King Street since 1986, where it has long been home to a Banana Republic and Gap Outlet store, which will permanently close on Jan. 24. Staff at both stores said Gap Outlet was underperforming at the space, with most business coming in on weekends.

Commercial real estate firm KLNB’s represented Douglas Development in the purchase of the building, and is managing its next steps.

The owners plan on splitting the property into two units, keeping the uses as retail and renting them out as soon as possible.

The firm says their 652 retail transactions this year is a 39% increase over 2020 and 15% over 2019, but that property values have stayed relatively flat over the last two years.

“Brick and mortar retail also remains extremely relevant regardless of what folks may say about it being dead, as evidenced by KLNB’s transaction volume,” KLNB President and Chief Operating Officer Marc Menick told ALXnow. “All this being said, transactions are well up over 2019 levels, but value is basically flat.  More deals, less value.”

The property, which has 158 square feet of frontage on King and S. Washington Streets, was originally developed as a 600-seat theatre in 1854, was converted to a Union hospital during the Civil War, changed hands through the decades and even burned down.

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The Mark Apartments, photo courtesy Washington Property Company

The Mark Apartments at 100 S. Reynolds Street near the Landmark area is under new ownership.

Washington Property Company (WPC) announced its acquisition of The Mark, a 227-unit apartment tower in the West End, last Friday. The company bought the tower for $52.7 million.

“This is WPC’s first acquisition of an existing multifamily property,” said Quinn Rounsaville, WPC Senior Vice President of Acquisitions, said in a press release. “We have long been committed to multifamily as an asset class in our portfolio, and this acquisition provides an opportunity to grow. We believe that with Amazon HQ2, Virginia Tech’s Innovation Campus, the redevelopment of Landmark Mall, and Virginia’s business-friendly political climate, the Alexandria submarket is poised for tremendous growth over the next five to ten years.”

In the press release, WPC said it plans to complete an ongoing renovation program at the apartments to finish upgrading apartment finishes and features. WPC also said it plans a more extensive upgrade of the building’s systems and common areas.

The redevelopment planned at Landmark and the HQ2 development in Arlington were name-dropped as a key feature that made the building an appealing acquisition.

“It is just 1.4 miles from the Van Dorn Metro station and four Metro stops to Amazon’s HQ2,” the press release said. “Only a half-mile from the property is the Landmark Mall redevelopment, expected to comprise 4.2 million square feet of mixed-use development anchored by a new billion-dollar Inova Alexandria Hospital, delivering as early as 2025.”

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