Potomac Yard Metrorail Station Opening is Centerpiece of New Metropolitan D.C. Neighborhood

A new Alexandria, Virginia, infill transit station is doing more than improve travel in the metropolitan Washington, D.C. area. It is also the central feature for the transformation of a 300-acre former rail yard into an accessible and walkable mixed-use development.

On May 16, the Washington Metropolitan Area Transit Authority (WMATA) and City of Alexandria elected officials and residents celebrated the grand opening of WMATA’s new Potomac Yard-Virginia Tech (Potomac Yard-VT) Metrorail station. It marked the culmination of more than a decade’s worth of collaboration between WSP, the City of Alexandria, WMATA, as well as other regional partners, to turn vision into reality.

Potomac Yard-VT station will provide riders with walkability to the Virginia Tech Innovation Campus currently under construction. The new campus was a key piece in attracting Amazon’s second headquarters, HQ2, under development a few stops north of the new station.

WSP has been providing Alexandria with ongoing financial analysis consulting services since 2008. The firm has helped several city departments — the city manager, planning and zoning, and the department of finance to name a few — determine how best to pay for the new station.

“Our team has been working with Alexandria and WMATA for many years,” said David Earley, director of strategic planning and development at WSP. “There’s just a great deal of connection between all of us, and that helps us deliver important work for this region.”

The initial work culminated in a value-capture analysis to fund the new rail station, followed by ongoing assistance and updates as the project progressed.

“WSP’s mission is to help deliver infrastructure projects that truly improve people's lives,” said Simon Mosbah, director of project development and finance at WSP. “The Potomac Yard Station is a tremendous example of that!”

One of the goals for the Potomac Yard-VT station was to increase the economic development potential of this section of Alexandria with its scale and proximity to the metropolitan D.C. area, and its adjacency to the Metrorail Blue and Yellow lines.

Potomac Yard features an opportunity for up to 12 million square feet of new commercial and residential development and is expected to introduce 26,000 new jobs and 13,000 new residents to this brownfield, urban infill redevelopment.

“It’s an energizing piece of development for the neighborhood, particularly for the local community,” Earley said. “The commercial and residential developments have energized the area to the south of the station, and just to the north, you’re starting to see progress on higher density developments, bringing to life the analysis we did for many years.”

WSP’s initial work with the city culminated in a value-capture analysis to fund the new rail station. This was followed by ongoing assistance and updates as the project was further developed.

The team’s financial analysis showed how channeling revenue from new real estate development surrounding the station through several value capture mechanisms would cover the station’s costs, which in turn shaped the station’s funding plan and developer agreement that Alexandria City Council adopted in 2010.

“WSP helps clients fund and finance their capital programs, and in particular their strategic projects like the Potomac Yard-VT Metrorail Station, through a combination of skillsets – funding strategy, grant development and financial modeling, among others.” Mosbah said. “Our ability to work seamlessly with project planners, designers and engineers to identify these funding solutions, make the project compliant with grantor or lender requirements, and generally tell the story of the project to help secure funding sets us apart within the industry.”

WSP collected and analyzed several inputs in the process, which included estimating revenue over time and required an understanding of commercial and residential real estate values, retail sales potential, hotel occupancies and other drivers of city fiscal revenue.

This flexibility allowed WSP to be very responsive to new client questions and answer questions quickly, even at times when there were multiple real estate buildout scenarios and station location alternatives that resulted in up to a dozen possible scenarios.

“We were able to help the city with all kinds of unique challenges when it came to the financial and analytical questions,” Earley said. “Different city departments would come to us, and they saw us as partners who they could call up for help with solving a variety of challenges.”

The WSP team’s work with Alexandria and WMATA on this hugely impactful project reflects the firm’s capacity to work with a variety of clients for similar funding opportunities. These clients range from transit and transportation authorities to municipal governments (counties and cities), metropolitan planning organizations and councils of government, states and multi-state organizations.

“We have exceptional expertise in supporting multilateral agreements and working at the intersection of multiple agencies at different levels of government,” Mosbah said. “Our work for projects like the Potomac Yard-VT Metrorail station uses innovative funding strategies like value capture and leverages funding from different sources.”

Earley highlighted the benefits that the new station will create for local residents by increasing support for technology-related employment in the area and developing the neighborhood for future growth.

“This community is now future positioned; the time and work invested will pay many benefits for decades,” Earley said.

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