Industrial Development Authority

About the IDA

The Industrial Development Authority (IDA) of Alexandria provides financing assistance to qualified businesses and organizations wishing to make an investment within the City of Alexandria. A seven-member body appointed by the Alexandria City Council for staggered four-year terms, the IDA was created by ordinance of the city council according to the Industrial Development and Revenue Bond Act (Chapter 49, Section 15.2 of the Code of Virginia).

The IDA acts as a conduit, issuing bonds and lending proceeds to 501(c)(3) organizations, small manufacturers and others. The financial markets set interest rates on such bonds below the rate of traditional financing because the interest earned by bond holders is exempt from federal taxation. Since 1998, the IDA as a conduit bond issuer has helped 90 nonprofit organizations with bond financing, issuing $1.5 billion in revenue bonds.

For more information, please download the IDA Bond Financing Brochure.

PROJECT

HIGHLIGHT

Inova Alexandria Hospital at Landmark

The project, now known as WestEnd Alexandria, will house a town center in addition to the Inova campus.

Unique Solution Allows Landmark Redevelopment to Move Forward

How did AEDP facilitate this project? Let’s start with the IDA: The IDA is a seven-member board, appointed by the Alexandria City Council, that promotes and facilitates economic development within the City. Historically, it has operated as a conduit issuer of bonds to support financing for nonprofit real estate transactions. AEDP President and CEO Stephanie Landrum administers the IDA, although the IDA is a separate entity.

The City evaluated a number of deal structures that would allow the City or a related entity to ground lease the site to Inova, and determined that IDA ownership of the land allowed for the longest and most flexible lease term. Length of term is extremely important when structuring a ground lease, as the building financier (in this case, Inova) must amortize the cost of the improvements over the term of the ground lease. The solution? IDA purchased the land from the private developer, using City funds, and immediately entered into a 95-year ground lease with Inova. This unique arrangement served as the necessary incentive for Inova to advance the project — the hospital system will develop, construct, own, and operate the hospital facilities.