Too sweet of a deal?

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By Derrick Perkins (Photo/Derrick Perkins)

After celebrating the National Science Foundation’s announced relocation as a major coup earlier this year, city leaders questioned the deal’s cost over the weekend — specifically how it affects subsidies for affordable housing.

Luring the foundation to Alexandria required a competitive package: The landmark deal saves the organization about $28 million in real estate taxes over 15 years. City Hall also freed it from contributing to the Eisenhower Avenue improvement and affordable housing funds.

The latter concession has drawn scrutiny as officials formalize the deal and green-light the project. Fearing it signaled a shift in Alexandria’s approach to affordable housing — which has plummeted by more than 1,200 units in recent years — planning commissioners recommended city council shunt tax dollars into the fund to make up for the loss.

City Councilor John Chapman successfully convinced his colleagues Saturday to follow the commission’s lead by considering redirecting $500,000 in real estate taxes toward the affordable housing fund at a later date. But the suggestion reignited an old debate about using tax dollars to preserve affordable housing.

How and when to set aside money for the cause, not to mention how much and where to spend it, have become contentious issues as redevelopment and gentrification force out increasingly more low-income residents. City officials said the foundation’s contribution for the cause would have been $1,043,725.

“With this project coming and affordable housing being taken off the table, that signals something, and I think that it has signaled something to a lot of citizens,” Chapman said.

Instead of waiting until later, Chapman wants the $500,000 of taxes earmarked for affordable housing during the foundation’s construction, which troubled City Councilors Paul Smedberg and Justin Wilson. Both strongly oppose setting aside tax dollars independently of the negotiations that mark budget season.

While affordable housing is a priority, it’s not the city’s sole focus, they argued. Any allocations must be made in the context of other needs, like school and public safety funding.

“I object to making budgetary decisions outside of the tradeoffs that are inherent in that year’s budget,” Wilson said. “And so if we want to have a discussion about allocating $500,000 of next year’s tax revenue to affordable housing, let’s have that discussion when we’re in the budget process and we’re weighing it against everything else.”

The duo also argued that without the package, which included eliminating the affordable housing contribution, the foundation would have stayed in Arlington or relocated elsewhere. Either way, Alexandria would have lost out, Wilson said.

“Clearly we did something here that we’ve never done before,” Wilson said. “We used … incentives to try and attract an employer to the city and encourage community development that, quite frankly, had we not put this incentive package on the table, would not have happened.”

The organization’s arrival in Alexandria is expected to spur job growth and redevelopment efforts, particularly in the Eisenhower Avenue corridor. Along with 2,400 jobs, the presence of the National Science Foundation — which draws about 200,000 visitors annually — will lead to at least one new hotel, an apartment building and several office buildings, officials said.

Local business experts believe the federal agency could generate as much as $83 million for the city’s economy annually through the course of its 15-year lease.*

*This sentence initially indicated the NSF would generate $83 million over the course of its 15-year-lease.