We last wrote about the Virginia Tech Innovation Campus about a year ago in an article, All In On Talent for Amazon. Since then, project planning has progressed rapidly despite COVID-related challenges. In October the Alexandria City Council approved the design for the first campus building and development plans for the mixed-use North Potomac Yard area where the campus will be located. The campus and surrounding development promise several community benefits, including an area-wide commitment to environmental sustainability.
We often use the City of Alexandria’s and Virginia’s support for the Innovation Campus as a good example of the Smart Incentives principle to invest in yourself first. The campus creates an enabling environment for companies like Amazon, but it also functions on its own to develop the talent pipeline and promote innovation in the region. As part of the North Potomac Yard Development area, it is expected to help Alexandria attain community priorities regarding environmental sustainability and generate additional transportation, open space and housing gains for the city and its residents.
Innovation Campus Status
The Innovation Campus will expand Virginia Tech’s footprint in Northern Virginia with 1 million square feet of classroom, research, office, incubator, housing and support space in the City of Alexandria. Its purpose is to build a stronger tech talent pipeline in the region and foster collaboration with industry and federal agencies. The campus was a key component of Virginia’s effort to attract the new Amazon headquarters. Amazon is continuing to develop its HQ2 footprint in neighboring Arlington, VA.
The physical campus is still under development but 79 graduate students are already enrolled in computer science and computer engineering master’s degree courses. The program is operating out of temporary space, and classes are all online this semester because of the pandemic.
The university must still finalize site plans and obtain building permits, but it expects to break ground in 2021. The first of three planned buildings will be a 300,000 SF academic building with instruction, research and office space. Its design is intended to “maximize photovoltaic power generation” and is “centered on the principles of sustainability, health and wellness, green and social spaces, accessibility, connectivity, flexibility, and integrated technology.”
North Potomac Yard Development
The campus is one piece of the much larger North Potomac Yard development project. If implemented as planned, this 19-acre mixed-use development will include six additional buildings with 475 residential units; 753,000 SF of office space; and retail, amenity and public and private open spaces. A new Metrorail station at Potomac Yard will serve the area and should be completed in 2022. Lionstone Investments and JBG SMITH are planning and developing the mixed-use site.
The development incentives associated with the project are limited to a property transfer that removes the 3.5 acre campus parcel within North Potomac Yard from the city’s commercial tax rolls. The city approved the subdivision of an existing commercial parcel into two lots, one of which was transferred by the landowner to the Virginia Tech Foundation. The City of Alexandria and the Alexandria Economic Development Partnership (AEDP) facilitated the transfer, which then exempted the parcel from local property tax. AEDP president Stephanie Landrum explained that the city would not typically agree to forego real estate taxes on a commercial property. However, in this case it is a way for the city to invest in a project that will generate a much greater overall benefit to the community while enhancing the taxable value of the remaining properties in the area.
Community Benefits – Environmental Sustainability
The Innovation Campus and surrounding district are expected to yield a number of community benefits. The development plan is grounded in the existing North Potomac Yard Small Area Plan (adopted in 2010), which was amended to incorporate the Innovation Campus. The original and amended plans emphasize greater density, sustainability, open space and parks, and Metrorail access. A May 2020 presentation on community benefits addressed transportation, open space, environmental sustainability, affordable housing, and community interaction with Virginia Tech.
Environmental sustainability emerged as a top community priority during substantial outreach and advisory committee work over the last year. The result was creation of a green policy for the entire site.
In October, the city approved an Environmental Sustainability Master Plan for North Potomac Yard (ESMP). The plan recommends striving to achieve carbon neutrality by 2040 (and carbon neutral buildings by 2030), meeting LEED Silver or City green building standards, encouraging on-site generation and storage of renewable electricity, and requiring the provision and minimum quantities of green roofs for new development. The ESMP articulates specific short-, medium- and long-term targets associated with carbon, water, waste and site characteristics. Health and wellness and infrastructure resilience are also addressed.
The ESMP ensures that sustainability will be top of mind for development within the district, according to Landrum. The site-wide plan allowed the city, university and developers to be more ambitious in striving toward desired environmental outcomes as compared to a building-by-building approach. The plan should enable sustainability to be “woven into the North Potomac Yard fabric,” allow strategies to layer upon each other, and improve site-wide performance. The ESMP will be regularly updated to document progress, with an annual public presentation and opportunity for review and comment.
We invite you to follow the links below to read the previous articles in our series on the incentive agreements associated with Amazon’s HQ2.
Amazon deals show incentives evolution and offer lessons learned
Arlington, Virginia’s incentive proposal for Amazon
Tennessee’s incentive agreement with Amazon
New York’s agreement with Amazon
Virginia’s grant agreement with Amazon
Amazon New York shows it’s time to rebuild incentives