With its Metro station financing puzzle on the verge of resolution, Potomac Yard, a hub of American transportation and industrial might from a by-gone era, now sits poised to become the region’s most innovative neighborhood.
The progress of the redevelopment relies upon construction of a Metrorail stop for the area. To date, the cost of that project about $240 million had been a sticking point, but city planners and developers seem to be on the right track.
“We’re getting closer,” said Mark Jinks, deputy city manager. “At this point it appears if we continue to make progress that we’ll have something for the Planning Commission and the City Council to vote on in May.”
On top of expected contributions from developers, financing would also include revenue from creating a “special tax district” for Potomac Yard properties, according to the current draft of the North Potomac Yard Small Area Plan.
The high-density, transit-oriented area furthers the city’s emphasis on sustainability, according to the plan.
Initially the proposed special tax district, adding 20 cents per every $100 of assessed value, lumped some currently inhabited properties in with the to-be-developed landbays.
One of the developed neighborhoods, Old Town Greens, is exempted from the high-tax area because its permit predates the original 1999 zoning plan that proposed a tax increase to fund the new Metro station, according to a city statement.
The other residential properties, including Potomac Greens, remain part of the plan, but will feature lower rates introduced once the rail stop is completed, Jinks said.
Projections for the landowners’ contributions are based upon the increased land value for properties close to Metro stations. Their taxes would also rise with the increase in available space and multi-story buildings.
The city is still working with developers on what that contribution will turn out to be, Jinks said.
Although the reality of a new Potomac Yard remains several years out, the public also brought up several concerns with the path development will take at that time.
“I am concerned about the requirement for more residential than office development,” wrote Deborah Johnson, a member of the city’s planning commission. “It also seems the higher residential density would require more new funding from the city to build and operate schools and provide other services residents will need. This seems counter to one of our primary goals of economic sustainability.”
When the entire plan is carried out, Potomac Yard could be worth an estimated $3.5 billion, according to city officials, dwarfing the present-day value.
“It’s a big priority [for the city],” Jinks said. “Development of this kind will, over time, produce new tax revenues that can help fund the city’s budget and help with the whole annual debate of taxes so it benefits city residents as a whole.”
The current Potomac Yard Center retail space, built as an interim use for part of the property, will be torn down to make way for high-density growth with more than 10 times the square footage, according to the city estimates.
“It’s been a very successful retail center, but it’s a suburban, big-box, surface-parking-lot model in an area that really needs or should have more urban, transit-oriented development,” Jinks said.
The proposed financing solution requires approval of the Planning Commission and City Council before taking effect.