Instead of the anticipated December groundbreaking for the ambitious revitalization of Lake Anne, the community was shocked by the news that Republic Land/Lake Anne Development Partners was dropping out of this public-private venture after months of effort failed to attract financing for the project.
What happened to let the air out of Republic’s acclaimed plan with over 1,000 residential units including substantial affordable dwellings, mixed use development linked to the existing center, pedestrian infrastructure and more? It was viewed as a signature project for Republic and one many of us thought would revitalize economically challenged Lake Anne Village Center in a manner faithful to Bob Simon’s community principles? What happens next?
Having followed for a dozen years the herky-jerky path to the Fairfax County Request for Proposals (RFP) finally leading to Republic’s winning offer and, having testified several times in support of its final approval, I was saddened, but not shocked, by LADP’s withdrawal. It was a complex undertaking involving Fairfax County, owner of the 18-acre Crescent Apartments affordable housing property, and several other property owners along North Shore Drive. And, by the time County approvals were in place to organize financing, there were problems.
Under the arrangement with Fairfax County, Republic was to have paid for the Crescent property over a period of years. Somehow, that changed and the County insisted on payment up front. In addition, along the way Fairfax County announced that every resident of the 182 Crescent Apartments would be guaranteed a residence in new buildings on the site, with costs of temporary relocation during construction and again when the new units were ready shared by Republic and the County, presumably. Good politics and OK public policy in my book, but a costly management nightmare and additional cost burden for Republic. The effect of such actions were to change the project’s profitability picture as Republic sought financing in a Reston market now filled with residential projects in the pipeline competing for financing.
In addition, I understand that some owners of adjacent properties included in the project increased their price demands to acquire their land, arguably above market or previously discussed amounts, further changing profitability. The County did not act to encourage landowners to stick to fair market values.
So, after considerable upfront effort and expenditures for project design and engineering, Republic withdrew, frustrated by the partnership and its increasingly inadequate financial incentives.
What next? I fear the outlook for Lake Anne revitalization is not good. The County could restart the process by returning to the proposals not selected under the RFP and try to work with an interested offeror if there are any.
Certainly, we face at minimum 2-3 years additional delay. Worse, it is difficult to imagine a project of the high quality of LADP’s plan emerging from the ruins, and harder yet to imagine one with anywhere near the generous affordable housing components—not to mention the right of return for all eligible residents.
For starters—1) if Fairfax County continues to put highest priority on payment for the Crescent property, one can imagine that self-imposed urgency leading to acceptance of the first developer offer that comes along; 2) financing is likely to be scarce because of the residential market glut in Reston; and, 3) other property owners may still insist on high prices for their property. Simply leaving them out of the project and focusing redevelopment on the Crescent property is an option, but not a very good one. It would deal a damaging blow to economic revitalization for the existing Village Center. But, we may be left with second best.
I fear our Founder is shedding a tear or two right now…