To facilitate the redevelopment of the former Landmark Mall site, AEDP developed a unique solution through a partnership with the Industrial Development Authority of the City of Alexandria (IDA) and the Alexandria City Council.
The creative solution allowed Inova’s $1 billion construction of the new Inova Alexandria Hospital at Landmark to move forward in 2022 — jump-starting a highly anticipated redevelopment of the 52-acre former mall site.
The medical complex will bring more than 2,000 health care workers to the campus and will anchor the expansive Landmark redevelopment. The renamed WestEnd Alexandria area will become a mixed-use, walkable urban village. Plans for the site include for-rent and for-sale multifamily residential units, plus retail, commercial, and entertainment offerings. There will be outdoor parks, a new fire station, and a relocated transit hub (which has already opened).
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 lease the Landmark ground 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 improvement over the term.
The solution? IDA purchased the land from the private developer, using City funds, and immediately entered into a grond lease with Inova for 95 years at $1 per year. This unique arrangement served as an incentive to help Inova move forward — the hospital system will develop, construct, own, and operate the hospital facilities.
“The Industrial Development Authority has always played an important economic development role in Alexandria, but this is the first time it has been used this way,” said AEDP Vice President for Real Estate Christina Mindrup. “Being able to own property and negotiate lease terms opens up even more opportunities to encourage and incent development in Alexandria.”
According to Inova, the hospital — which is planned to open in 2028 — will provide a larger emergency room and private patient rooms and host the Inova Schar Cancer Institute at Alexandria Hospital, which will offer full cancer services, including radiation and infusion. The hospital will pursue a Level II trauma designation, which would make it one of only three Level II trauma centers in Northern Virginia and among seven across the state.
A Level II center provides 24-hour immediate coverage by general surgeons, as well as coverage by other specialties that include orthopedic surgery, neurosurgery, anesthesiology, emergency medicine, radiology, and critical care. The medical complex will also include a medical office building for an estimated 50 specialty physicians.
“This is a classic redevelopment story, with a unique twist with this new partnership,” said Landrum. “You had a vacant mall that is now being turned into millions of square feet of new development. It’s good for Alexandria and our residents because it takes a blighted, underutilized area and turns it into a thriving space that is also great for the tax base.”