City of Alexandria, Virginia
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MEMORANDUM
DATE: OCTOBER 21, 2026
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER
FROM: ASPASIA XYPOLIA, DIRECTOR, OFFICE OF HOUSING
DOCKET TITLE:
TITLE
Consideration of a Grant Submission to the Virginia Economic Development Partnership to Support Site Remediation for Potomac Yard Landbay G - Block G.
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ISSUE: Submission of a Grant Application to the Virginia Economic Development Partnership’s Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund for $500,000 to support site remediation of Potomac Yard Landbay G - Block G to facilitate the development of affordable housing.
RECOMMENDATION: That Council approves submission of the grant application. If funds are awarded pursuant to the competitive review by the Virginia Economic Development Partnership (VEDP), request approval to authorize the City Manager to execute any documents necessary to facilitate the project as proposed.
BACKGROUND: Located at 601 E. Glebe Road, the subject site is an approximately half acre vacant parcel owned by Wesley Housing. In December 2025 City Council approved development of 88 units of affordable rental housing on the site as part of DSUP 2025-10024. The proposed units will be affordable between 30% and up to 80% of the area median income for a minimum of 40 years. The majority will be designed as two- and three-bedroom units which will enhance housing options for families and multigenerational households proximate to transit, jobs, and amenities.
In March 2026, Wesley Housing applied for 9% Low Income Housing Tax Credits to secure equity financing for the project. Due to the high degree of interest in that application round, adequate funding was not available to support all applications, and Wesley Housing did not secure tax credits. The organization is strengthening the competitiveness of its application and intends to reapply in March 2027. As part of its resubmission, Wesley Housing is exploring opportunities to diversify and maximize other funding sources (such as the Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund) to reduce the amount of debt needed to develop the project.
DISCUSSION: The VEDP’s Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund (VBAF) provides up to $500,000 in grant funding to support the remediation of contaminated properties to remove hazardous substances and waste. The VBAF requires the jurisdiction in which the site is located to apply for the grant on behalf of the project. If awarded, the funds will be sub-granted to Wesley Housing, which will conduct the site remediation. It is noted that the City has been successful in applying for these competitive funds in the past; in 2022 it was awarded funding for site assessment and planning work associated with the GenOn (Potomac River Generating Station) site.
VBAF applications are due on or before November 13, 2026. Awards are expected to be announced in January 2027. The grant’s period of performance is up to three years with work to start within approximately one year of the award.
FISCAL IMPACT: Grant funds will be sub-granted to Wesley Housing. A local match of at least 100% is required for this grant; it can be met through public and/or private sources, including funding for the purchase of property. JBG Smith’s donation of land for the project, estimated to exceed $2 million, has been determined to meet this requirement.
While Wesley Housing is fully committed to developing the project, its delivery ultimately hinges on the organization securing and layering a series of affordable housing funding and financing sources involving a broad range of public and private partners. In light of this, staff sought clarification if the City would be responsible to pay back the grant following remediation if the project were delayed. The Virginia Economic Development Partnership confirmed that as long as the property was not redeveloped for an unauthorized use (that did not support new economic development prospects), within one to two years following the award, that the City would not be required to reimburse VEDP for the value of the grant.
ATTACHMENTS: None
STAFF:
Emily A. Baker, Deputy City Manager
Tamara Jovovic, Acting Division Chief, Office of Housing