City of Alexandria, Virginia
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MEMORANDUM
DATE: JANUARY 22, 2026
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER
FROM: EMILY A. BAKER, DEPUTY CITY MANAGER AND INTERIM DIRECTOR, TRANSPORTATION & ENVIRONMENTAL SERVICES
DOCKET TITLE:
TITLE
Consideration of Modifications to the Washington Metropolitan Area Transit Authority Funding Agreement for the Potomac Yard Metrorail Station [ROLL-CALL VOTE]
BODY
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ISSUE: Consideration of modifications to the Amended and Restated Agreement Between the Washington Metropolitan Area Transit Authority (WMATA) and the City of Alexandria, Virginia, for the Funding of the Potomac Yard Station Project (Funding Agreement) to add $35 million in funding for the Potomac Yard Metrorail Station.
RECOMMENDATION:
1. That City Council authorize the City Manager, subject to approval of all applicable legal documentation by the City Attorney, to enter into a third amendment to the WMATA Funding Agreement upon full execution of a global settlement agreement resolving all merited change orders, negotiated Contractor’s claims, and the existing escalator claim, with such funds constituting the City’s final payment and a release of all current and future claims related to the project; and
2. That City Council authorize the appropriation and use of up to $35M from the Potomac Yard Fund balance to fund such third amendment to the Funding Agreement.
BACKGROUND: On May 14, 2025, the City received notice from WMATA that the project budget is insufficient to close out the project. WMATA’s cost accounting indicates an additional $35M is required to close out all outstanding merited change orders, submitted Contractor claims, and the existing escalator claim currently with the Armed Services Board of Contract Appeals associated with the project. WMATA understands this request for additional funding will be the final request, which must cover all current and any future WMATA costs, litigation or claims associated with the project. The Amended and Restated Agreement between Washington Metropolitan Area Transit Authority and the City of Alexandria, Virginia for the Funding of the Potomac Yard Station Project is included as Attachment 1 and the First and Second Amendments to the Amended and Restated Agreement Between the Washington Metropolitan Area Transit Authority and the City of Alexandria, Virginia for the Funding of the Potomac Yard Station Project are included as Attachments 2 and 3 respectfully.
DISCUSSION: Staff performed an analysis to reconcile WMATA’s budget and reviewed the submitted change orders and claims and concur with the requested close out cost. The additional cost can be attributable to complexities not anticipated in the original budget.
WMATA will submit a project budget increase request to their Board. Once approved, the third amendment to the Funding Agreement will be finalized. After which, WMATA will begin project close out procedures with the Design Build contractor. This close-out process is expected to result in a global settlement agreement resolving all remaining change orders, negotiated Contractor claims, and the escalator claim, and providing a full and final release of all current and future claims related to the project as it relates to City funding. Execution of the global settlement agreement and corresponding third amendment to the Funding Agreement will ensure that the City has no future financial obligations associated with WMATA’s construction of the Potomac Yard Metrorail Station.
The Station opened to revenue service on May 19, 2023. The Design Build contractor has since completed all punch list items and restoration work. Overall project completion (meaningful work) was achieved in fall 2024.
FISCAL IMPACT: By amending the WMATA Funding Agreement for the funding of the Potomac Yard Metro Station project, City Council is authorizing the WMATA project budget to increase from $350 million to $385 million. The $35 million in additional funding will be made available from the Potomac Yard fund balance that has been generated from special tax district revenues and was established to support the construction and operation of the new Metrorail station. No funding from the city’s general fund will be used. The first funding request will be fulfilled 12 months from date of amendment execution, and the second and final request will be fulfilled 24 months from date of amendment execution.
ATTACHMENTS:
1. Amended and Restated Agreement Between the Washington Metropolitan Area Transit Authority and the City of Alexandria, Virginia for the Funding of the Potomac Yard Station Project.
2. First Amendment to the Amended and Restated Agreement Between the Washington Metropolitan Area Transit Authority and the City of Alexandria, Virginia for the Funding of the Potomac Yard Station Project.
3. Second Amendment to the Amended and Restated Agreement Between the Washington Metropolitan Area Transit Authority and the City of Alexandria, Virginia for the Funding of the Potomac Yard Station Project
STAFF:
Daphne Kott, Interim Director, TES- Project Implementation
Lisa Robrahn, Assistant Director Project Controls, TES- Project Implementation
Bonnie Brown, Deputy City Attorney