By Erich Wagner and Chris Teale (Photo/Alexandria Economic Development Partnership)
City officials and business leaders are brimming with excitement following the announcement last week that the U.S. Transportation Security Administration will relocate to Alexandria.
The agency will move its approximately 3,400 employees into 500,000 square feet of existing office space at Victory Center in the Eisenhower West neighborhood in 2017. The news came at the end of a multi-year bidding process, and more than a decade since the Victory Center last had an active tenant.
Officials are hopeful the advent of a large federal tenant will spark new economic activity in the Eisenhower West corridor, a neighborhood where plans for redevelopment already are in the works.
Stephanie Landrum, CEO of the Alexandria Economic Development Partnership, said securing the TSA was among her organization’s top priorities for many months.
“Because of [Victory Center’s] size and location, and even the way it’s situated on the lot, the only likely tenant was going to be the federal government,” she said. “Every one [of these agency moves] that has come out in the last 10 years, Victory Center has competed for … so this was one of the last chances — if not the last chance — to get this building filled.
“If the TSA hadn’t chosen Victory Center, we’d probably be talking about tearing that building down or repurposing it to a noncommercial use, and that’s not something my organization would have wanted to see happen.”
City Manager Mark Jinks said the city offered up to $1.5 million in tax breaks per year for the agency over the course of the initial 15-year lease. Even after the tax relief, which only covers the small technology and meeting center TSA plans to build at the site, city staff anticipates $25 million in new tax revenue will enter Alexandria’s coffers. But that’s just a conservative estimate, Jinks said.
“The tax abatement is on the value of the new construction they’re doing,” he said. “The existing land and existing building will become more valuable now that it’s being leased and improved, so the taxes on those are what totals the new $25 million.
“[And] the abatement is an up-to dollar amount, and it’s only on the center portion where the TSA will be. The owners intend on subdividing the property into three pieces and developing the surface parking lots on the east and west sides, and those will be fully taxable. Those aren’t even in the [$25 million] number we’ve calculated.”
Landrum said that although the initial lease is for 15 years, she anticipates the federal government will want to extend its stay when the time comes.
“A number of research entities look at leasing in the D.C. region, and the average stay of a federal agency is 40 years,” Landrum said. “So basically, there’s a 99 percent chance that they’ll renew for an additional term. When you think about that sort of stability and what an anchor like that can build over a long-term period, the value is really great.”
Landrum said she expects to see a similar process as what happened on the eastern portion of the Eisenhower Valley with the relocation of the U.S. Patent and Trademark Office to the Carlyle neighborhood, although on a somewhat smaller scale.
“If you look at the USPTO and when it moved from Crystal City to Carlyle — that was a similar move — and what we’ve seen is over the 10 years since their relocation, there’s been a slow and steady relocation of businesses that do business with the PTO [to the city],” she said. “Employees who started to work at the agency choose to live close to where they work, and Carlyle really built up around the PTO. And I think we’ll see some immediate new investment and new development projects to capitalize on the new activity.”
Mayor Bill Euille applauded the news in a statement last week, noting how well the TSA move will dovetail with current efforts to craft an Eisenhower West small area plan for redevelopment.
“GSA’s decision to locate the TSA headquarters at Victory Center is a huge economic boost for Alexandria as a whole, and for the West End in particular,” he said in a statement. “The city is working on a small area plan for Eisenhower West that encourages new investment, redevelopment and business activity. [The] TSA will serve as a catalyst and will add a daytime office population and on-site retail activity to this developing market.”
City Councilor John Chapman said the news provides an opportunity to build a burgeoning mixed-use community near the Van Dorn Metro station.
“With 3,400 or more employees moving to that area, obviously there’s some opportunities for small businesses and local businesses to take advantage of folks being there in Alexandria,” he said. “You’ll probably see eateries, you’ll probably see entertainment options coming to that area because folks will need something to do after they get off work or before work, and they’ll need support services, whether it’s daycare, babysitting or something like that near the facility.”
Vice Mayor Allison Silberberg also highlighted the importance of Victory Center being near mass transit options.
“I am thinking ahead regarding, like a lot of people, the transportation impact,” she said. “We have a Metro stop right there as well as the [Capital] Beltway, but the Metro stop is key in that location. … We need to work hand in glove with TSA to encourage them to provide any and all incentives that workers take mass transit.”
And the move comes as particularly good news for Dak Hardwick, vice chairman of the board of the Alexandria Chamber of Commerce and the chairman of the organization’s government relations committee.
“I live literally right across Backlick Run from Victory Center [in Cameron Station],” he said. “After the last 18 months of planning [for Eisenhower West], instead of having to wait 20 or 30 years for something to happen, all the planning efforts move into implementation very quickly now.
“It’s just a huge victory. There is no downside to the selection — all upside. Everything is already there. The Metro is there, it’s just underutilized, and it dovetails with all of the community planning efforts that have been so robust over the last 18 months.”