City Council approves controversial Old Town luxury hotel

City Council approves controversial Old Town luxury hotel
City Council approved a luxury hotel development at 699 Prince Street. (Photo/Google Street View)

By Olivia Anderson |

City Council approved partially financing a luxury hotel at 699 Prince St. during its Saturday public hearing, to the dismay of some community members. 

A total of $16.3 million in public funds will go toward the project, with a $10.2 million federal and state tax credit, called “net historic tax credit proceeds,” and $6.1 million in gap financing, half of which will come from state and half from local portions of Virginia sales and site-generated taxes. A grant from the City of Alexandria and the Alexandria Economic Development Partnership will provide $250,000 to the developer. The proposed hotel costs $69.6 million in total, according to the city staff report. 

The project appeared before council as part of a tourism development plan created in conjunction with the Virginia Tourism Development Financing Program. According to a presentation by Alexandria Economic Development Partnership CEO Stephanie Landrum, the city had been working with the developer on the project and underwent Board of Architecture review and partial demolition in 2019, but when the pandemic hit it became difficult to secure funding. 

“Getting financing for commercial projects, and specifically hospitality projects as the pandemic hit became pretty much impossible, so the developer was in a position where they could not continue,” Landrum said.

However, many labor activists and community members showed up to the meeting to oppose the project, claiming that the city’s funds could be better directed elsewhere. 

Virginia Diamond, a labor lawyer and president of the Northern Virginia Labor Federation, expressed concerns about the project’s impact on labor protections for employees.

“There will be labor brokers, there will be misclassification and the only way to avoid that is to have real labor standards, prevailing wages, which are simply market wages to prevent low-road labor brokers from getting onto the scene. That’s something that really hurts the immigrant workforce in Alexandria,” Diamond said. 

She and other labor activists, many from United Here Local 25, also argued that the hotel in question should be a union hotel. 

“These people who are hotel union members here, they have good jobs, they have good union full-time jobs. They have middle class wages, they have free healthcare, they have retirement plans, and, most importantly, they have a seat at the table. They have a voice on the job, they have a contract that gives them due process, and this hotel should be a union hotel or at least the workers should be able to freely choose that,” Diamond added. 

Berole Bekele, an Alexandria resident and community organizer with African Communities Together, criticized the proposed hotel’s aim to create 19 full-time jobs and 92.5 part-time jobs. According to the staff report, the projected annual staff hours number 231,920 and the projected annual salary expenditures equate to $5,118,682. 

“[This is] making it harder to find a place to live for working class immigrants,” Bekele said. “For me, this is really degrading to our community and it’s like a slap in the face.”

During deliberation, council grappled with the notion that on one hand, the project would promote tourism and economic growth and on the other hand, labor activists brought forward genuine concerns. 

Vice Mayor Amy Jackson noted that the city push is currently about COVID-19 recovery, with which this hotel would assist. 

“[For] our city recovery, having it booming again, this would be a gem, but the flip side is I also want to protect the workers. I want to make sure everything is A-OK for the residents and I don’t want our city on the line for everything,” Jackson said. 

Landrum pointed out that the city is already invested in the project and that it’s already fairly far along in the process; thus, any significant changes must be directed toward future projects rather than one that is currently in progress. 

However, council did make some smaller additions to the project, such as using new language declaring council priorities and vision; securing anti-wage theft provisions during construction; ensuring equal employment opportunity provisions for hiring during construction and at the hotel; monitoring for independent construction; prioritizing hiring for Alexandria residents and establishing a labor management relationship.

Councilor Canek Aguirre also proposed an amendment requiring the entity to allow space for a potential union-organizing effort on the site, which Jackson seconded. 

Councilor John Chapman expressed appreciation for the labor activists and conversation around workers’ rights, urging that more of them must happen in the future with AEDP, Visit Alexandria and other taxpayer groups. But he also highlighted the importance of acknowledging the revenue boost the project would bring to the city. 

“[My colleagues] have seen what we’ve had to do in terms of dealing with other partners – whether it’s Metro, whether it’s ACPS – that’s going to bring a bigger bill to our door. We’re going to have to figure out how to fund it,” Chapman said. “So finding little opportunities like this where we’re leveraging some of our new income and tax money and state tax money I think is a win.”

The project site served as Hotel George Mason in the mid 20th century. (Photo/Office of Historic Alexandria)

The hotel may also prove an economic boon with historic ties, as it served as Hotel George Mason in the mid 20th century. It later became an office building. 

Councilor Kirk McPike called the early discussion of the project, which first took place on Jan. 11, “frustrating” because it was about financing concerns that he claimed did not reflect the reality of the existing project. McPike said the project could have been a “slam dunk” had it better addressed the labor concerns brought forth on Jan. 11. 

“If this project moves forward, it will not include a true labor neutrality agreement, but the desire by our city for a fair opportunity for organization is now clear,” McPike said. “It will be on us as leaders and people committed to improving the lives of Alexandria’s workers to ensure that the spirit of this agreement is actually upheld by the final product.”

McPike went on to say that as the city tackles future equity issues, including the ongoing debate regarding pay for unionized first responders and potential unionization of other city staff with the legalization of collective bargaining, accruing resources will be imperative for council. 

“This is a half step, and I hope that the next project that we look at in this area is a full step forward in terms of where we want to be with our labor rights,” McPike said. 

Chapman made a motion to approve the project, with Jackson seconding. Council approved the project 4-3, with councilors McPike, Alyia Gaskins and Sarah Bagley dissenting.