NSF in Alexandria: Setting a Bad Precedent?

Alexandria’s capture of the National Science Foundation earlier this year carries the promise of new jobs in a host of sectors and hope for revitalizing the area around the federal research institute’s yet-to-be-built office on Eisenhower Avenue.

When its office is completed in 2017, the NSF will bring its 2,400 employees and a contractor tail of another 2,200 to the city. The institute is also expected generate 90,000 hotel room nights per year and spur the construction of several new hotels, eateries and other retail along Eisenhower.   

And while that promise is thrilling, some city officials are concerned about the precedent set by the incentives and abatements being offered to the developer of the office.

In order to secure the lowest lease-rate offer in a very competitive process to land the NSF, Alexandria gave Hoffman Development a $23 million tax abatement. The city is also waiving a $750,000 contribution to the Eisenhower Avenue Improvement Fund and a $1.04 million contribution to the city’s affordable housing fund.

Last week, Planning Commissioner Derek Hyra took particular issue with the affordable housing fund waiver when the developer was seeking a slight height increase on the 660,000-square-foot complex.

Hyra called the waiver “a blemish” on a grand slam deal for the city.

“Added up, there are probably $80 million in incentives to get NSF to move here and it’s probably worth that money,” Hyra said. “But I think we’re sending a signal to the federal government, to NSF and to the developers in the city that we’re willing to put some of this on the backs of the low- and moderate-income residents of this city by giving up a million dollars in affordable housing contribution. … I think we are setting an unfortunate precedent that we are for development at all cost.”

Hyra and the planning commission, conferring with Deputy City Manager Mark Jinks, offered a recommendation to City Council to earmark $1 million of the estimated $9.3 million in real estate land tax on the property for the city’s housing trust fund.

“This is not a debate about whether or not NSF is coming here,” Hyra said. “They’re coming here. This is about the way in which they come here.”

Council will consider the recommendation at an Oct. 19 public hearing at City Hall.

Vice Mayor Allison Silberberg said she believes waiving the affordable housing contribution “leaves a terrible message.”

Councilman John Chapman complimented the creativity of the commission’s recommendation and said the donation would go a long way in instituting parts of the city’s housing master plan.

Building support for the recommendation could prove difficult, however, as councilmembers squabbled over the use of set-aside funding from tax revenue during budget discussions in the spring.  

“We held the line with the redevelopment plan for Landmark Mall,” said Chapman, referring to an affordable housing contribution of more than $2 million from the developer of another catalyst project for the city. “Obviously, that was a different process.”