Measure of Land Revitalization Benefit
Property Tax Increase and Total Assessed Value
Case Study Name: USPTO
Case Study Location: Alexandria, Virginia
Project Summary: The 15.66 acre Site is located in Alexandria, Virginia and was once part of a larger tract of land which is still under redevelopment. Work began around 2000 to redevelop the Site as a 2.4 million square foot office complex and campus. The Site was divided into seven parcels for development purposes which included the construction of five office buildings and two parking decks. Past use of the property had resulted in extensive soil contamination along with groundwater contamination which would require remediation to be completed as an integral part of the redevelopment process.
Site Location and History: The Site is located inside Washington, DC/Metro Area beltway and is less than eight miles from the US Capital area in Washington, DC with close proximity to rail, metro, bus lines and Reagan National Airport. Large tracts of undeveloped property are difficult to obtain and highly sought after within this market area as can be seen in the pre-remediation 87 million dollar purchase price of the 15 acre study Site. This proximity to the nation’s capital results in exceptionally high land values even when obvious contamination is present.
Past use of the property included a railroad switching yard dating back over 150 years, a scrap yard, and a historic municipal landfill which closed in the 1970s. Prior to sale to the developer, all past use of the property had ceased and former structures had been razed.
This property is now leased to the US Patent and Trademark Office (USPTO) and is considered their “Main Campus” housing nearly all of the employees of this agency in this complex of five buildings.
Environmental Issues and Remediation: The Site Characterization indicated the presence of select metals, volatile organic compounds, semi-volatile compounds, petroleum hydrocarbons, and polychlorinated biphenyls (PCBs) in the soil and/or groundwater. Resultant remediation included the excavation, management and/or disposal of 450,000 cubic yards of material. Once remediation was completed, the risk assessment evaluated reuse of the Site as the proposed office complex. Institutional controls were placed on the property which prohibited the use of the groundwater except for environmental monitoring and required dewatering, prohibited residential use, required hardscape capping of the Site or two feet of clean fill, and required the construction of a gas collection system which utilized vapor barriers, gas collection piping and blowers under the buildings to prevent the potential build up of methane, other landfill gases or volatile organic compounds.
Measuring Economic Impact: The Property Tax Increase and Total Assessed Value were extracted directly from the City of Alexandria tax and assessment records which are available on-line and a summary of this data is presented in the table below. Also included in the table is an adjacent a 2.43 acre parcel for comparison.
The predevelopment 87 million dollar study Site was valued at $5,586,060 per acre at purchase in 2001 and in 2009 was assessed at $9,823,772 per acre excluding the value of the buildings. The corresponding annual property tax increase is from an estimated $962,254 without structures to $9,823,772 for the property and buildings combined.
Total assessed value based on Alexandria’s 2009 property assessment is approximately 1.077 billion dollars.
Audience for Data: The intent of the Brownfields Program initial study (which is briefly discussed below) was to provide Virginia Department of Environmental Quality (VDEQ) and local officials a tool to evaluate the potential economic benefits of brownfield redevelopment including employment estimates and real estate tax revenues.
Other Economic Benefits: The VDEQ’s Brownfields Program completed a study in 2009 to assess the beneficial impacts of Brownfields redevelopment based on an evaluation of six successfully redeveloped properties including this study Site. Although this study Site is more of an extreme example due to the high value of the property as compared to the average Brownfields redevelopment in Virginia it did fit with the model which was developed to predict and evaluate future redevelopments.
This campus complex accommodates more than 9,000 employees of which approximately 5,900 have Virginia residences. Since the buildings that make up the campus are occupied by a Federal agency, it can be assumed that a great deal of this employment would not have been generated in Virginia if the development had occurred in Washington, DC or Maryland. The facility did consolidate employees that were working in 18 buildings at other locations, so it should be noted that some of this employment may have been preserved rather than created. However, it should also be noted that a significant increased efficiency has to be realized by consolidation of these 9,000 employees and 18 offices into this campus complex. Furthermore each site which has been redeveloped along this former rail line has been a stepping stone for further redevelopment and increased property values over the entire corridor.
Also of interest is that this 2.5 million square foot complex represents the largest lease signed by the U.S. General Services Administration for a federal government tenant. Another interesting result of our evaluation of this property is that the total wages paid at this complex are estimated at $795 million per year.
This property was enrolled into Virginia’s Voluntary Remediation Program in order to receive statutory benefits for liability protections once the site completed the program and to allow VDEQ’s involvement in the remediation process. One of the developer’s attorneys who negotiated the environmental issues surrounding this cleanup indicated that without Virginia’s Brownfield/Voluntary Remediation Program, it is very likely this project would not have been completed.
J. Meade R. Anderson, CPG
Brownfields Program Manager
Virginia Department of Environmental Quality
Note: This success story was part of a large study/report developed by the Environmental Council of the States and can be found at the following link: http://www.ecos.org/files/4282_file_November_2010_Green_Report.pdf?PHPSESSID=4a75ea0e89640a1dd7d3f35bb54120b4