Financing Falls Through For Long-Planned, 2.6M SF Northern Virginia Development

A massive mixed-use redevelopment of a 364-unit condominium community in Fairfax County, Virginia, will not move forward as planned after critical funding fell through.

The 19-acre community at 2601 Indian Drive, next to the Huntington Metro station, was set to be overhauled into a 2.6M SF mixed-use development. The plan called for 200 townhomes, 1,300 multifamily units, 210K SF of office, 80K SF of hotel and 27K SF of retail.

The team had previously hoped to begin construction on the first of three phases this fall, but it announced in a Friday afternoon press release that the plans have been paused indefinitely due to financing issues. 

“We’re just victims of these macroeconomic shocks to the system that have hit us here and have made financing a complex project like this quite difficult,” The IDI Group Cos. Managing Director Enrico Cecchi, whose firm is serving as the master developer, told Bisnow in an interview Monday.

The community's residents in 2017 voted to terminate their condo association to allow the redevelopment to move forward. Since then, they’ve been working with IDI to secure zoning approval, plan approval and funding. Zoning and plan approvals were in place, but this month, a funding roadblock caused the project to stop in its tracks. 

The contract purchasers for the Phase 1 land bays, Jefferson Apartment Group and Dream Finders Homes, notified the community and IDI that they would be unable to secure the funding for the land, capital necessary to buy out two-thirds of the condo owners, Cecchi said. 

“Everybody let out a sigh of disappointment,” said Lloyd Tucker, president of the Huntington Club Board of Directors, who has been involved in the master plan since its conception in 2005. 

Tucker said the community has seen a lot of hurdles with its nearly unprecedented termination-for-development project, but this was an especially hard break.

“We thought we had it this time,” he told Bisnow.

Cecchi said the purchasers wrote saying due to the current economic climate, they wouldn’t be able to close. 

“They’ve been under contract for a long time, but they informed us recently that despite their best efforts, despite all our best efforts, that this was not going to work,” Cecchi said. 

But IDI and the Huntington Club say they don’t expect this to be the end of the road. 

IDI remains under contract as the master developer on the project, and Cecchi said the idea is to wait and see how the economic situation shakes out in order to determine when they can forge ahead.

“We’re going to continue to assess the market in late 2023, early 2024 to see if the conditions warrant moving forward,” he said.

He noted that the other piece of the financing puzzle, the capital for infrastructure, was already underway, in the form of bonds from Fairfax County. The county was in the process of underwriting the bonds, in an effort led by Wells Fargo Bank, Cecchi said. 

“We’re confident that the county was going to come through because this is a very, very critical project for Fairfax County,” Cecchi said.

At a December committee meeting, Fairfax County Board Chairman Jeff McKay said “we really need to get something done here,” referencing “the importance of this particular location” for transit ridership and growth in the region, the Washington Business Journal reported.

Fairfax County did not respond to requests for comment. 

Cecchi said the scope of the project would be a game-changer for the area.

“It not only creates tremendous economic growth that moves on down the Route 1 corridor but it also achieves a tenfold increase in annual tax revenue for the county,” he said.

“We’re talking hundreds of millions of dollars of future tax growth to Fairfax County just from this project alone," he added. 

Tucker said the community is ready to push forward when the time comes, as they’ve done since the radical project’s conception. 

“The folks, as they had done over the past 15 years that we had been doing this, kind of let out a big sigh and say well we got this far, we can carry it home as well,” he said. 

Cecchi said he is confident the road ahead will be more clear.

“We’ve been through cycles in the past and cycles are predictable — we slow down and then at the right time it bottoms out and things pick up strongly again so we’re looking forward to that happening in the near future,” he said.