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This blog focuses on real estate, land use and construction-related topics affecting Virginia and the Washington, D.C. metro area. With topics ranging from contract drafting and negotiation to local and regional land use project updates, the attorneys at Bean, Kinney & Korman provide timely insight and commentary on the issues affecting owners, builders, developers, contractors, subcontractors and other players in the industry. If you are interested in having us cover a specific topic, please let us know.

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Posts in Economic Development.

The second headquarters for Amazon in Arlington, VA is obviously a hot topic in local commercial real estate. Much of the focus so far has been on projected residential price increases and increased commercial leasing. But, let’s not forget about the hotel industry. The forecast for much higher hotel traffic in the area was the reason the Transient Occupancy Tax was included in the incentive package negotiated by the state and local governments. 

On Saturday, July 18, the County Board approved the Retail Action Plan by a vote of 4 to 1, with direction to further amend some facets of the proposed plan. Board Member Libby Garvey voted against the Plan.

During a rather extensive discussion which focused a great deal on the feedback that Board Members and Staff received calling for more flexibility within the Plan, the Board ultimately decided to broaden the “red” category to permit more uses. Many critics of the Plan believed the red category was too restrictive. The use category of Services and Repairs will now also be permitted within the red category.

The Board also voted to incorporate the Process document released by AED within the Plan itself to help aid Developers and the Board in applying the Plan to future and existing site plans. This document, originally requested by Chairwoman Hynes at one of the working sessions, was designed to aid the analysis of a site plan when there were other conflicting policy documents. In essence, the Process document helps to demonstrate when the retail action plan may stand up to or yield to existing policy documents like sector plans and the like.

The Arlington Economic Development staff will be updating the Plan to incorporate the latest revisions made by the Board. There was no timeline specified as to when that may be final, however, the Plan has been approved.

In addition to approval, the Board decided a periodic review of the plan was needed, as retail trends change quickly. With this end in mind, they requested that the Plan be reviewed on a periodic, ongoing basis.

For our previous coverage of the Retail Action Plan, take a look at our original postupdate one and update two.

Original image courtesy of Brett VA – changes made

The debate about the new Retail Action Plan ("The Plan") continued earlier this month as the Board held another work session to discuss the progress on ongoing efforts to update the Plan.

Much of the discussion focused on the so called "red streets" within the Plan. These streets are designated for pure retail uses, including: retail sales, food and drink establishments and entertainment establishments exclusively. Further, under the new plan the red streets would require certain design standards be met both internally and externally to the first floor of any building constructed or redeveloped on a red street in order to permit a retail use.

On April 22, 2015, Jill Griffin of Arlington Economic Development shared with NAIOP the progress being made on the update to the Arlington County Retail Plan (the “Retail Plan”). Following the County Board work session in January, the Retail Plan has undergone some further refinements. The number one theme which emerged during the County Board work session was “flexibility,” as the Board felt it was critical that the Retail Plan be able to adapt to fast-changing trends in retail.

Taking that to heart, Ms. Griffin explained that the draft Retail Plan was reorganized in hopes of making it more user-friendly and the six broad principles of retail (as defined in the plan) remained at the core of the policy.

On January 20, during a special work session open to the public, the County Board considered updates to the Arlington County Retail Action Plan (the “Retail Plan"). County Board members met with Arlington Economic Development staff, the Arlington Retail Task Force of the Economic Development Commission and members of the Planning Commission. In the audience were members of the Arlington Chamber of Commerce and the local Business Improvement Districts.

The discussion centered on the role of the Retail Plan going forward, including the Plan’s overall vision, principals and policy.

The Washington, D.C. metropolitan area has no shortage of airplanes flying over the region. There is also no shortage of developers and landowners who want to create the region’s landmark buildings and skyscrapers which may fall within flight paths. These developers would rightfully be concerned that the Federal Aviation Administration (FAA) is proposing a change to its One Engine Inoperative (OEI) policy that could affect building height limits. The current proposal would allow the FAA to work with airport owners to define an OEI departure area from the runway.

According to a good source, GSA and WMATA are working on a new policy to allow GSA to modify its rent caps for sites that meet certain transit oriented development criteria (i.e. sites within a certain proximity to Metro stations, etc.).  As many of our readers know, GSA caps its rents as a result of negotiations with OMB per rules created to implement the Budget Enforcement Act of 1990. OMB (through Circular A-11) created a set of rules which are used to determine whether a federal lease is an "Operating" or "Capital" Lease. To make a long story short, GSA and OMB have agreed to rent caps to make it easy to stay within "Operating Lease" guidelines. The current Operating Lease rent caps are $34/SF in Maryland, $38/SF in Virginia, and $49/SF in the District of Columbia.  With vacancies finally falling and rental rates starting to rise, the natural effect of these caps will be to push federal office space development away from mass transit locations, which yield the highest rental rates.  Currently, big chunks of space for federal agencies just aren't normally available below these price caps where there are mass transit services available.

It is no secret that the Commonwealth of Virginia is the first choice for business in the Washington-Metro Region (being exceedingly more pro-business than the District of Columbia and Maryland), and for the past several decades, Arlington County and the City of Alexandria, with a few exceptions, have had a virtual monopoly over the Metro in Northern Virginia, access to quite a bit of DOD and other federal bucks (in part because of the access this mass transit provided to federal agencies for businesses and federal employees, etc.)  But let’s be blunt; while good urban planning has played a serious role in the urban expansion across the river from DC in Virginia, good urban planning is basically a symptom of great location, location, location.  Arlington and Alexandria have had the benefit of being immediately adjacent to the federal trough in the most business-friendly state in the region with a monopoly over mass rail transit.  These are the core reasons that they have enjoyed their prosperity and growth.  

As many of our readers know, the new Crystal City Sector Plan was considered last night (see here for our prior analysis of the proposed plan), but did you know it contained a proposal for a Tax Increment Financing ("TIF") fund  to include the Crystal City, Potomac Yard and Pentagon City areas at the same time?

The Arlington County Board will be deciding whether to approve a series of amendments to Arlington's Comprehensive Plan relating to Crystal City at their hearing at the end of September, after several years of evaluation on how best to react to the loss of approximately 17,000 jobs and over 4 million square feet of occupied office space due to the recommendations of the Base Realignment and Closure Commission (BRAC).  Specifically, the County Board will decide whether to adopt the new Crystal City Sector Plan 2050, and modify the General Land Use Plan and the Master Transportation Plan.

With Long Bridge Park and the Pentagon to the north, the airport and the river to the east, Aurora Highlands and Pentagon City to the west and Alexandria/Potomac Yards to the South, existing metro and VRE access, Crystal City seems well poised to make a comeback.  Here is an exhibit showing Crystal City's existing conditions.  The plan specifically outlines which sites are expected to be redeveloped, which sites have potential for redevelopment, and which sites are expected to remain for the life of the plan (click here for the comparison). Much like the Tyson's Corner Plan, Crystal City's 260 acres are broken up into proposed "districts" (shown here), including the Northwest Gateway, Northeast Gateway, Central Business, Entertainment, South End and West Side Districts, each with their own respective district-level focus.