Alexandria is $50 million closer to a new Metro station at Potomac Yard after the Virginia Commonwealth Transportation Board agreed Wednesday to give the city a $50 million low-interest loan for its construction.
The Potomac Yard Metrorail Station, one of the city’s highest priorities, would be built on Metrorail’s Yellow and Blue Lines, between the existing Braddock Road and Ronald Reagan Washington National Airport stations, and the city expects it to generate billions of dollars in new private sector investment.
The station, which is expected to cost between $209 million and $268 million, has been in the planning stages for years. Public comment on a draft environmental impact statement will be taken in March, according the city’s Web site.
The City Council is expected to choose a preferred location for the station this spring. The existing commercial and residential development, a CSX rail line and the nearby George Washington Memorial Parkway have made the choice of a site challenging. If all goes as the city hopes, the station could open by late 2018.
The city projects that a new Metro stop at Potomac Yard would bring up to 26,000 new jobs within one-quarter mile of the station, and 13,000 new residents within one-half mile.
The loan locks in an interest rate of 2.17 percent over 30 years, said city spokesman Craig Fifer, “lower than we might expect with municipal bonds and with payment terms that are more flexible. There’s a four-year grace period before we need to start repayments, that will allow new development to come in and begin to pay back the loan.”
The city’s loan application also included an offer to accelerate repayment if revenue exceeds expectations. This provision would allow the money lent to the city to be returned to the state’s revolving fund 11 to 12 years earlier than originally planned.
The city’s application to the Richmond-based board was presented by council member Paul Smedberg (D) and supported by state Sen. Adam Ebbin (D-Alexandria), Del. Rob Krupicka (D-Alexandria), Sen. Richard Saslaw (D-Fairfax) and Sen. George Barker (D-Fairfax).
Mayor William Euille (D) noted that the city had to enter a competitive process to apply for the loan, and said he was pleased to hear that the state board granted it.
“This helps,” he said. “The more we can get from other funding sources, the less we’ll have to depend upon” tax revenues.
The station’s financing is expected to come from new tax revenues triggered by development in the booming Potomac Yard corridor, along Route 1, as well as from two already created special tax districts, developer contributions, federal money from the Federal Transit Administration and additional state money from the Northern Virginia Transportation Authority.
Alexandria plans to fully fund the station without any additional revenue needed from its general fund, although the city expects to issue general revenue bonds to cover cash flow until revenues from new development begin to kick in, Fifer said.
In a statement, Gov. Terry McAuliffe (D) called the loan “an important step towards a major economic development project for Virginia, and a sign of continued progress.”