City of Alexandria, Virginia
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MEMORANDUM
DATE: SEPTEMBER 25, 2025
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: JAMES F. PARAJON, CITY MANAGER /s/
DOCKET TITLE:
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Resolution Authorizing and Directing the City Manager to Execute (1) A Commonwealth’s Development Opportunity Fund Performance Agreement and (2) Local Performance Agreement Related to the Expansion of Systems Planning & Analysis, Inc.
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ISSUE: Consideration of acceptance and allocation of $1,700,000 from the Commonwealth Development Opportunity Fund (COF) to support an economic development incentive grant to Systems Planning and Analysis.
RECOMMENDATION: That City Council authorize the City Manager to:
1. Execute the Commonwealth Development Opportunity Fund Agreement - Sign a Performance Agreement between the City of Alexandria, The Alexandria Economic Development Partnership (AEDP), the Virginia Economic Development Partnership (VEDP) and Systems Planning and Analysis (SPA) (the “COF Agreement”) that outlines the disbursement and management terms and conditions of the COF grant and the Alexandria Investment Fund (AIF) grant, on behalf of the Alexandria City Council.
2. Accept and Appropriate State Grant Funds - Accept and appropriate a $1,700,000 grant from the COF that will be transferred to AEDP and then to SPA, subject to the terms and conditions of the COF Agreement .
3. Execute the Local Incentives Agreement - Sign a Performance Agreement among the City of Alexandria, AEDP and SPA (the “Local Performance Agreement”) that outlines the disbursement and management terms and conditions of the Alexandria Investment Fund (AIF) grant, reimbursement of permitting fees and investment by the City in infrastructure project(s).
BACKGROUND: Systems Planning and Analysis (SPA) was founded in Alexandria in 1972 and has experienced rapid growth over the past few years. They currently occupy a 239,000 square-foot office building in the Mark Center, which they began leasing a portion of in 2004 and have grown to occupy over their lease term as the sole tenant. They have a global workforce of approximately 2,800 professionals, with half of their workforce in the greater Washington region. SPA is a data-driven analytics company dedicated to solving the most challenging national security problems facing the United States and our allies.
As SPA evaluated their options as they continued their rapid expansion, they decided to look throughout the Washington, DC region, and their other locations throughout the United States to identify the best place for their next phase of planned growth. They identified a highly skilled talent pool and access to their federal government clients as their key criteria, and as a result, began weighing an expansion in their current location in the West End of Alexandria against a move to new space in Fairfax County, Arlington County, or Washington, DC. Economics were also identified as a key factor in their real estate decision, including the opportunity to purchase their building at auction, and move from lease to ownership. The company engaged various jurisdictions to discuss potential economic incentive packages and space scenarios.
AEDP worked with VEDP to discuss the use of the Commonwealth Development Opportunity Fund (“COF”) to assure SPA’s retention and growth in Alexandria. After the State confirmed that SPA and the project met the eligibility criteria for the COF incentive program, the Governor approved a COF grant in the amount of $1,700,000.
As a requirement of the COF grant, the City of Alexandria will provide a local match in the form of a performance-based grant of $1,700,000 composed of both cash and in-kind contributions, resulting in a combined total State and City incentive package of $3,400,000.
DISCUSSION: The COF Agreement and Local Performance Agreement outline specific requirements that must be satisfied for the $1,700,000 COF grant to be transferred to Systems Planning and Analysis and for the disbursement of the City of Alexandria’s matching contributions. The agreements will be in place for a period of five years.
The principal requirements outlined in the COF Agreement include the following:
• The Company will purchase, equip, improve, and operate offices in Alexandria, and make or cause to be made a Capital Investment of at least $33,400,000, of which approximately $3,900,000 will be invested in furniture, fixtures, and equipment, and approximately $11,500,000 will be invested in the up-fit of the building;
• The Company will create and maintain 494 new jobs in Alexandria, for which the Company pays an average annual wage of at least $152,828, in addition to the existing 590 jobs currently in the City;
• The Company will invest back into the community via partnerships with, including but not limited to: Alexandria City Public Schools, Northern Virginia Community College, Virginia Tech, and the AEDP; and
• The Company will make a commitment to “Alexandria First” by offering priority interview preference to qualified candidates presented to the Company from the Alexandria Workforce Development Center and will show preference for Alexandria qualified vendors when procuring goods and services for corporate events.
In accordance with the Local Performance Agreement, Alexandria will provide the following incentives as a match to the COF grant:
• $494,000 in cash from the Alexandria Investment Fund, disbursed on a performance basis at $1,000 for each job actually created, up to 494 jobs;
• $227,000 in permit fee waivers to be reimbursed to the Company for actual expenses incurred related to permitting fees for building improvements to the Facility.
• $979,000 in in-kind public infrastructure improvements and enhancements in the West End neighborhood, to include new bus stops, improved pedestrian walkways, curb extensions, and ramps at the N. Beauregard and Rayburn intersection.
Upon execution of the COF Agreement and Local Performance Agreement by all parties, the City will request VEDP release of the COF Grant by no later than October 15, 2025. The COF Grant in the amount of $1,700,000 will then be paid to the City. Within 15 days of its receipt of the COF Grant proceeds, the City will disburse the COF Grant proceeds to the AEDP. Following receipt of the COF Grant proceeds, the AEDP will disburse the COF Grant proceeds as outlined in the COF Agreement to Systems Planning and Analysis. Given the performance-based nature of this incentive, the COF Agreement includes a provision that requires the company to repay the grant if the targets outlined in the COF Agreement are not met within the five-year performance period.
Beginning on January 1, 2027, and each subsequent year thereafter through the COF Agreement period, Systems Planning and Analysis will submit to the AEDP a report outlining their performance outcomes during the previous 12-month period, including capital investment, job creation, and community investments, to be eligible for the COF match payment from the City.
FISCAL IMPACT: AEDP’s analysis of SPA’s proposal and additional proprietary financial information provided by the Company concluded that the City will recoup the financial incentive investment within the first year of retention and growth. Over the course of the COF Agreement, the City is estimated to receive more than $8,000,000 in direct tax revenue. Following receipt of the $1,700,000 COF grant from the Commonwealth, staff will include the disbursement of the grant to AEDP in the November 2025 Supplemental Appropriation Ordinance (SAO).
ATTACHMENTS:
1. Draft Commonwealth’s Development Opportunity Fund Performance Agreement
2. Draft Local Performance Agreement
3. Proposed Resolution
STAFF:
Stephanie Landrum, President & CEO, Alexandria Economic Development Partnership
Marian Marquez, Senior Vice President, Alexandria Economic Development Partnership
Alex Cooley, Director, Business Development, Alexandria Economic Development Partnership
Bonnie Brown, Deputy City Attorney, City Attorney’s Office
Gregg Fields, Director, Department of Code Administration
Kevin Greenlief, Director, Department of Finance
Hillary Orr, Deputy Director, Department of Transportation & Environmental Services