Summary

Although the City owned 5.33 acres of the 7.5 acres of land where the Virginia Tech Northern Virginia Center (the “Grad Center”) is located in Fairfax County, the 1995 lease to the universities allowed the lessee to buy the land beginning in 2021.
Virginia Tech (VT) decided to exercise the purchase option but ultimately decided to relocate the Grad Center to its new Innovation Campus in Alexandria and sell the land to developers Converge West Falls, LLC.
The sale was easier done by the City, and the City agreed to complete the sale on VT’s behalf, so that VT technically did not execute the purchase option.
In November 2023, Converge paid $25 million for all 7.5 acres. The City received $8.4 million’ Virginia Tech received $16.6 million.
During the lease period, the City received $1 in annual rent from the universities , and the $500,000 initial payment, but the lease was accompanied by additional financial benefits for the high school and the Whittier land transfer from Fairfax County to the City.

Background

In November 2023, the City received $8.4 million for its share of the sale of 7.5 acres of prime land in Fairfax County between the West Falls development and the West Falls Church metro station. The City owned 5.33 acres, and Virginia Tech owned 2.18 acres. This land is occupied by the Virginia Tech Northern Virginia Center until March 2025.Commonly referred to as the Grad Center, it was sold to Converge West Falls, LLC, a Rushmark Properties and Hitt Construction partnership. This post looks at how the City came to own these acres in Fairfax County and the events that led to its sale.

City Council meetings on this sale occurred on July 11 and 25, 2022. The remaining City-owned land in Fairfax County today are at Mount Daniel Elementary School and part of the Property Yard.

The strategy to maximize revenues from City lands

Since the City of Falls Church was incorporated in 1948 having broken away from Fairfax County, City leaders have wrestled with the scarcity of land within the City and the need for revenues. The solution has been to prioritize land development that would generate tax revenues within its borders.

Kiessling Tract land parcels map - location of grad center — Location of the Kiessling tract. Parcel 1 is owned by Falls Church City. Source: Modified from VT PowerPoint Presentation Summary, July 20, 2022.

It was advantageous to locate as many municipal facilities outside the City as was practical, so that land within the City could be put toward generating revenue. Fortunately for the City, at that time there was abundant land to acquire just across the border in Fairfax County, though land use and development plans would require the County’s approval. As a result, it was not accidental that, until the border adjustments of 2013, three of the four City schools and half the property yard were located in Fairfax County.

City Manager Wyatt Shields said that the City purchased 5.33 acres of the land, known as the Kiessling Tract, because it was adjacent to George Mason High School as part of its long-range vision. Fairfax County records show that the $283,000 sale took place in 1975, and the City, as a government agency, was exempted from paying real estate taxes to the County. The remaining 2.18 acres along Haycock Road was sold to a developer. (City Council meeting, July 25, 2022.) According to local historian Harry Shovlin’s research, reported in the August 25, 2022, edition of the Falls Church News-Press, it was used as a community garden for many years.

Did the City really lease the land for $1 a year since 1995?

Mr. Shields said that the University of Virginia and Virginia Tech put out a solicitation to jurisdictions throughout northern Virginia for sites that would be suitable for a center for graduate and professional studies. The City, with the support of Fairfax County, proposed this property for their use, believing that the presence of the universities would be beneficial for economic development and bring learning opportunities. Their efforts were successful. In 1995, UVA and VT leased the City’s parcel and purchased the adjacent 2-acre property to build the VT/UVA Northern Virginia Center, or Grad Center.

Details of the original 1995 lease were not provided. However, Mr. Shields described key features of the lease:

Lease period of 40 years, ending in 2035.
The universities paid $500,000 and annual rent of $1 a year.
The universities had the option to purchase beginning in 2021 for $3.35 million, less a $500,000 initial payment. No inflationary terms were included, but the land would be restricted to educational or government uses only.
Sale to a third party – The City would be entitled to a third of the adjusted value.

Whittier School historical marker on Hillwood Avenue. Source: Mary Riley Styles historical archives.

The lease seems exceedingly generous to the universities, especially as the Fairfax County records show that the land was assessed at $3.5 million in 2000. Inflation in 1995 was around 3%. However, Mr. Shovlin said that there was an agreement that the universities would foot the bill for a computer room and a distance-learning room at George Mason High School for $400,000 plus $35,000 a year for 20 years.

Mr. Shovlin also said that Fairfax County deeded the 9.6 acre Whittier School property to the City as part of the deal in 1994. This was a Fairfax County school located within the City on the corner of Hillwood Avenue and Cherry Street, a remnant of the past when the City was part of Fairfax County. Because of a declining student population in the preceding years and consolidation efforts, the school had been vacant for some time. The City subsequently sold the Whittier property to a residential developer for $9.6 million.

Virginia Tech bought out UVA and decided to exercise the purchase option

The universities invested $16.7 million to construct the 101,000-square foot grad center. It opened in 1997. Twenty years later, the building needed renovation, but UVA decided to pursue facilities elsewhere. According to a Virginia Tech 2019 document, VT decided not only to buy UVA’s share but also to execute the lease option to buy the City parcel. VT paid UVA $8.23 million for UVA’s 40% share in 2019, and was in contact with the City about executing their purchase option, possibly earlier than 2021.

It is unclear if VT intended to profit from the sale of the land by executing the purchase option. They had other facilities in Arlington, and VT had just launched the Innovation Campus in Alexandria. In a subsequent 2024 document to the VT Board of Visitors, VT wrote that the property “would require significant investment for long-term usage” and that it had explored other options but none were financially viable.

Fairfax County updated their Comprehensive Plan for higher density

Fairfax County comprehensive plan WMATA TSA study area

In 2018, Fairfax County revised its Comprehensive Plan for the Washington Metropolitan Area Transit Authority (WMATA) parcels that included the Grad Center properties. This area is referred to as the West Falls Transit Station Area (TSA). The previously adopted plan recommended public facilities, governmental and institutional/mixed use at the base level, with an option for residential use at a density of 30 dwelling units per acre, a density lower than the City’s revised T-Zone ordinance allows.

In addition to higher density, retail, offices and more housing, Fairfax County’s new plans also set a 10% affordable dwelling unit (ADU) requirement for rentals and 15% ADU for sale units of workforce housing. The City’s parcel was zoned for a height of 145 ft. The County intended these changes to make it financially attractive to redevelop the WMATA parcels.

Sale of the grad center site to Converge West Falls, LLC.

The first indication of redevelopment plans for the Grad Center site itself was publicized in July 2019, with the announcement of plans for a mixed-use residential complex in partnership with HITT Contracting along with an expansion of the existing academic program. Redevelopment plans were then pursued by Converge West Falls, LLC (a partnership between Rushmark Properties and HITT) leading to an agreement to purchase the land for $25 million. (Rushmark and HITT also submitted a proposal for West Falls that the City rejected.) The City’s share of the proceeds would be $8,430,000.

Negotiations were primarily between Converge, Virginia Tech, and Fairfax County. However, VT asked the City to be the seller. If VT exercised the right to purchase the 5.33 acre portion from the City, the land would still be restricted to education or government uses. Therefore, VT sold its 2.18-acre parcel to the City on the condition that it be sold simultaneously by the City to Converge. VT and the City terminated the ground lease, reverting the 5.33 acres to the City and removing the use restrictions. (It was not clear if the use restrictions in the lease would have carried over to a third-party sale.)

The City Council thought that this Fairfax County redevelopment would enhance the economic fortunes of the City’s West Falls development. They voted to approve the sale on July 25, 2022. The sale would be executed when Fairfax County approved Converge’s redevelopment plans.

The redevelopment plan was approved in 2023

The Fairfax County Board of Supervisors approved the developer’s rezoning application on July 25, 2023, exactly one year after City Council approved the land sale. Converge closed on the land in November, the City received its $8.4 million, and VT received $16.6 million. At the time Mayor David Tarter said, “This closing marks an important milestone in a decade-long planning effort initiated by the City of Falls Church.”

Converge intends to build:

a 240,000-square foot office building to be used as the Corporate Headquarters for HITT Contracting.
a Virginia Tech National Center for Smart Construction within the office building.
440 residential units with ground floor retail, located on Haycock Road.
road improvements – including extending West Falls Station Blvd from the West Falls development through the middle of the site, connecting to the West Falls Church metro station.