ALEXANDRIA, VA—The East End of this submarket is seeing a good bit of activity. The National Science Foundation headquarters is currently under construction, and the US Patent and Trademark Office complex, as well, is located to the east on Eisenhower Avenue in the Carlyle neighborhood.

Now the City of Alexandria is hopeful that the US Transportation Security Administration's decision to move its headquarters to the Victory Center Building could boost the other end of the street.

"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," said Mayor William D. Euille in a prepared statement.

He said the city is working on a small area plan for Eisenhower West -- Eisenhower West Victory Center Redevelopment District -- to encourage new investment and redevelopment. "TSA will serve as a catalyst, and will add a daytime office population and on-site retail activity to this developing market," Euille said.

New development districts also mean new tax districts and the city believes the numbers pencil in for this investment.

Real estate improvements made for TSA would receive up to $1.5 million in annual partial real estate tax abatement, projected to be a $23 million tax savings value over the initial 15-year lease. The Victory Center land and existing building, which has been vacant for the last 10 years, would remain fully taxable. The city estimates the net new tax revenue over the same 15-year period at $25 million, even after the partial tax abatement.

But the benefits of the lease do not stop with tax revenues.

TSA has an annual budget of about $7.36 billion and economic projections show that in addition to the permanent jobs moving to Alexandria, the headquarters relocation will spur more than 640 temporary jobs to construct the new facility, for a total of 3,400 new jobs -- which translates into a 4% increase in Alexandria's overall workforce.

The city estimates that over the 15-year lease the headquarters is expected to generate close to $16 million each year for Alexandria's economy, including new salaries and wages for Alexandria residents, as well as the spending by TSA employees and visitors at local businesses.

Finally, occupancy of the existing Victory Center building will result in a 3% decrease of the city's overall office vacancy rate, bringing it to 13.5% from 16.5% to 13.5%

The creation of the new tax district is subject to public hearing and approval by City Council.

Instant Insights /

City Of Alexandria to Create Redevelopment, Tax District Following TSA Lease

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