In 2010, Alexandria Renew Enterprises needed land for expansion of its state-of-the-art wastewater treatment facility. They already owned a vacant two acre parcel, but this land was cut off from the rest of the facility and was planned for residential use. The only land meeting Alexandria Renew’s needs was a ten-acre former Go-Kart track already planned for high-density mixed use development.
After a long and difficult condemnation case, Alexandria Renew was forced to pay $36 million for the ten-acre tract of adjacent land. The price tag was so high because the parcel was already zoned for 512,000 SF of office and 170,000 SF of residential apartments, but Alexandria Renew needed the land for industrial-type use. The solution: transfer of development rights.
Working with a team of McGuireWoods lawyers, the public authority known as Alexandria Renew crafted a complicated plan to sell the development rights for private development to JM Zell Partners and Alder Branch Realty. Key to the deal was an innovative site plan that concealed the wastewater treatment uses under a soccer field. The soccer field merges with an elevated landscape extending onto the private land and covering several levels of above-ground parking. Because Alexandria Renew is exempt from real estate taxes, the transfer puts the development rights back on the City tax rolls.
Alexandria Renew negotiated the sale of the development rights for 50% of the fair market value if the sale were to include the land along with the development rights. They also agreed to sell the surplus two-acre parcel that could not be used for wastewater treatment. When the final closing occurs in 2020, the public authority will have received up to $32 million from the private development. In the meantime, the project continues to win national engineering and design awards and the public has begun to enjoy a new soccer field.