Construction Sites, Parking Lots Surround The Nearly Open Potomac Yard Metro. But Not For Long

A new Metro station is scheduled to open next month in the Potomac Yard area of Alexandria, a rare addition of an infill stop creating new access to a neighborhood that has a massive amount of development in the works.

Sitting on the northern edge of Alexandria near the Arlington border, Potomac Yard is part of the larger district that was rebranded as National Landing when it won the region's biggest economic development prize in a generation: Amazon picked the Crystal City-Pentagon City area for its second headquarters in late 2018, coinciding with the announcement of the new $1B Virginia Tech Innovation Campus in nearby Potomac Yard.

Want to learn more about National Landing? Come to Bisnow's event on the neighborhood Tuesday, April 18. Get tickets here.

The long-term vision for Potomac Yard calls for a host of new mixed-use development around the campus, but that won't be what greets Metro riders when the new station is expected to open next month. 

Instead, they will see a pair of active construction sites: the first academic building on Virginia Tech's campus is scheduled to open in August 2024 and, across Route 1, an Inova Health System facility and adjacent multifamily project from Stonebridge that is also scheduled to open in 2024. 

They will also see a sea of surface parking that surrounds a Target-anchored shopping center directly to the west of the Metro station.

That 19-acre property was approved in October 2020 for more than 1M SF of mixed-use development from JBG Smith, the same developer building Amazon HQ2 and a series of nearby multifamily and retail projects. 

But JBG Smith has yet to break ground on its Potomac Yard development. The publicly traded REIT told investors in November that it was putting the first two buildings on pause due to macroeconomic conditions. 

JBG Smith Senior Vice President Taylor Lawch told Bisnow Wednesday that it still doesn't have a projected timeline for when construction will start. 

"The reason those particular buildings aren't under construction is because the market dynamics, particularly construction costs, are not working in our favor," Lawch said. "It's hard to put a date to it. We don’t control macro factors that affect things like construction pricing. What we can control is ensuring we’re shovel ready, have infrastructure in place so we're ready to pounce when conditions are right."

While it hasn't begun constructing the buildings, the developer has been working on a series of public space and infrastructure improvements in the area around the Metro station, Lawch said. This includes new public roads, a half-acre pedestrian plaza and a 4.5-acre park that is expected to open by the end of this year.

But the lack of activity on the new buildings has been a source of some disappointment from other developers and officials in the area, given how the location of JBG Smith's property next to the Metro serves as a critical connection between the station and everything else planned in Potomac Yard.

David Baker, the director of operations and chief of staff for the Virginia Tech Innovation Campus, said he has been in communication with JBG Smith, so the delay didn't come as a shock, but he had previously hoped the developer's buildings would be opening around the same time as the university's campus. 

"That was the plan pre-Covid, that some of this was going to come online around the same time. There was talk that even the commercial aspect could come online before the campus, but unfortunately Covid happened and things took a different turn," Baker said in an interview. "It’d be great to have some of that already built, but it’s not a huge issue for us in terms of recruiting and our plans for the campus to not have it here on day one."

Stonebridge principal Doug Firstenberg, whose firm broke ground in late 2021 on the Inova building and an adjacent multifamily-and-retail development on its Oakville Triangle site, said he sees JBG Smith's project as important for the overall neighborhood's growth. 

"We would like JBG to go as soon as possible, but we understand in today’s environment things are happening slower than we would like," Firstenberg said. "The sooner they develop, the more this area’s going to mature and get better, so we hope they get going soon, and we expect they will."

Alexandria Economic Development Partnership CEO Stephanie Landrum said she doesn't see JBG's pause as a reflection of the Potomac Yard area's health, but rather as part of the slowdown facing the commercial real estate sector nationally.

She said she is confident there will be demand for the multifamily components of JBG Smith's project once it builds them, and AEDP is actively working to help draw commercial tenants that could occupy the office and retail space planned at the project. 

"From the city’s perspective, obviously our vision is to have a whole district, not just Virginia Tech sitting sort of in an urban field," Landrum said. "We want it to be surrounded by development and users and a mix of uses."

Despite the delays to some of this development around the Metro stop, the station's opening marks a major milestone for a neighborhood that has been waiting years for it. The station will run trains on the Yellow and Blue lines, providing direct access to Old Town Alexandria, Reagan National Airport, Arlington and Downtown D.C. 

The long-planned station has helped draw some new office tenants to Potomac Yard that have already moved in. 

The National Industries for the Blind in 2019 opened its newly built, 105K SF headquarters in Potomac Yard, relocating from the Braddock Road area. The American Physical Therapy Association in 2021 opened a new seven-story headquarters building in the neighborhood. The Institute for Defense Analyses last year opened its new 370K SF headquarters on a Potomac Yard site it bought from JBG Smith's predecessor, The JBG Cos., and MRP Realty. 

"Part of the reason they chose to invest in building offices there was because it was going to be served by Metro," Landrum said. "So they are literally invested in the opening of this new facility and will be there to celebrate."

Next year will also represent a big milestone for Potomac Yard, with its new educational and healthcare facilities slated to open. 

Virginia Tech has already launched the computer science and engineering master's programs that will occupy the Potomac Yard campus, which are now operating out of its Falls Church facilities. It aims to have 400 students in the programs by the time they can begin working in the first building of the new Innovation Campus, scheduled to open in time for the fall 2024 semester. 

The campus is ultimately slated to have two additional academic buildings, but Virginia Tech's Baker said it doesn't have an estimate for when those will start construction. He said the long-term vision is to have students and faculty living in the area and working with some of the nearby tech companies from Amazon to Boeing to Northrop Grumman. He said the Metro station will create the connectivity to bring that vision to life. 

"It will become truly a destination area that people will want to live and work and learn in, as opposed to what it is today, which is a car-centric commercial district where you drive in, get goods at Target and drive away," he said. "Now there will be a huge wealth of opportunity and a reason to stay here. So it will have a vibrancy that rivals Old Town Alexandria and parts of the District."

Next year is also slated to bring the new, 93K SF Inova HealthPlex, which officials said is a much-needed healthcare facility for the neighborhood. It is being built on the development site where Stonebridge is also constructing a 571-unit multifamily project with 37K SF of retail. 

Firstenberg said Stonebridge anticipates strong demand for the apartments given the proximity to the Virginia Tech campus, and he said the addition of a Metro station will allow the developer to command significantly higher rents than it could without the transit stop.

Stonebridge has signed letters of intent with several retailers, Firstenberg said, but he declined to name them before the deals are closed. He said the the Inova facility has helped drive demand for the retail space, in addition to Virginia Tech and the Metro station. 

"Imagine 1,000 people a day going into the Inova HealthPlex, and we’ve got all these shops restaurants and retail," he said. "Their daytime traffic is going to be dramatically different than it would otherwise."

JBG Smith also sees the Metro station and the Virginia Tech campus as "huge demand drivers" for apartment units and commercial space it ultimately plans to build, Lawch said. 

"Potomac Yard is a critical component of National Landing, anchored on the north by Amazon’s headquarters and on the south by Potomac Yard and Virginia Tech's Innovation Campus," Lawch said. "Because of that, Potomac Yard is a major focus and opportunity for us."

For Alexandria, Potomac Yard represents a key hub for potential growth on the city's northern end, and Landrum said it sees the Metro station as one of the best investments it has ever made. 

"In terms of the city’s excitement, expectation and expected return on investment, this might be the largest project in our history,” Landrum said. “Because we planned for this Metro station literally decades ago, this has been a very long and hotly anticipated opening. The great news is that so much investment has happened in front of its opening, so we don’t have to wait to start to see the spinoff and all of the tail we knew would come if we were able to make this investment.”