The Alexandria City Council unanimously approved permitting to create a public private partnership to develop a 19-acre, $155 million, mixed-used development on the banks of the Potomac River on the site of a former coal-fired power plant.
"This site probably has the most unique set of circumstances and partners and reviewers and people interested, perhaps of any site in this region," said Stephanie Landrum, president & CEO of the Alexandria Economic Development Partnership.
"Because of its location and its prior use, having to deconstruct, abate, and remediate a coal-fired power plant on top of the normal cost of development makes the total cost of bringing this site into the 2026 world extremely expensive."
The comments came during a hearing before the vote last week, laying out terms for making the project a reality which includes creating a community development authority.
The CDA is responsible for setting up and administering a 30-year tax increment financing system on the property that will be used to provide debt service.
According to numbers crunched by City Manager Jim Parajon, "the net return on the city's investment would be between $250 and $300 million over that period of time."
The preliminary
The deal sheet also gives the city the right to use general obligation bonds for the second phase of the project.
The city believes, "the proposed transaction structure as described boosts future debt capacity via increased tax revenue and mitigates any impact to the city's AAA credit rating."
HRP Potomac LLC is the developer in the deal and bought the property in 2020 for an undisclosed amount.
"We thank the City of Alexandria for their collaboration and support of a public-private partnership that will play a vital role in making this project possible as envisioned and delivering generational community benefits," HRP CEO Roberto E. Perez, CEO of HRP via statement. "We can't wait to break ground on this transformational redevelopment."
Construction on the Potomac River Generating Station was completed in 1957 and it supplied power to the D.C. area until it was closed down in 2012. The site has been vacant and closed to the public since then.
Redevelopment of the site will be challenged by the hazards of dealing with coal ash residue which can contain heavy metals.
The city's plan is to leverage a TIF and bond sales "to enable transformation of the site into a vibrant mixed-use development."
"The realization of the plan would encompass up to 2.5 million square feet of commercial and residential development with a projected capitalization of approximately $2 billion."
The site would also host over five acres of public green space, convert a pump house into a community amenity and offer more than 900 underground parking spaces.
Housing would include a 494-unit mix of apartments and condos, with 11 designated as affordable.
HRP expects to break ground in 2027.
