Freddie Mac downsizing is an opportunity for Tysons
While much of Tysons Corner is slated to become a new urban center, parts of the area will remain disconnected office parks for the foreseeable future. By planning for future demand and leveraging rising property values, Fairfax County can encourage more investment in the area and provide new public amenities, like improved transit.
Last week, President Obama announced that the federal government may try to reduce its support for mortgage company Freddie Mac, headquartered in Tysons Corner. If Freddie Mac eventually downsized or consolidated its operations, they might sell their 37.8-acre campus on Jones Branch Drive, far from Tysons' core or the Silver Line.
This may not happen for years, if not decades. By then, it may not be as desirable a location, especially when the Silver Line opens and Tysons begins the transition to a more urban, walkable place. But a land sale could be an opportunity to bring one of its largest office parks in line with the larger vision.
Freddie Mac's campus contains just 800,000 square feet of Class A office space. When built in 2002, it had a very desirable location: direct access to the Dulles Toll Road and adjacent to the Westpark transit center, served by 6 Fairfax Connector routes. It's also close to the new Jones Branch Drive exit on the new 495 Express lanes.
Map of Tysons with Freddie Mac and Jones Branch Drive from the Tysons Comprehensive Plan Amendment and edited by the author.
By 2025, much of the land around the four future Tysons metro stations will be substantially developed. The street grid will still be discontinuous, and each of the station areas may act as a discreet hub, similar to Reston Town Center. But the area will have enough density to justify its own internal transit needs, perhaps even exceeding the capacity of bus service.
Meanwhile, the office parks of North Tysons, where Freddie Mac is located, may have filled in with some residential development. But it still won't have direct access to transit, nor is it covered by the design guidelines of the Tysons Comprehensive Plan, which guides the redevelopment of Tysons. Freddie Mac's property will be very valuable, but the current zoning and allowable density prevents major redevelopment from occurring.
In order to take advantage of this site's potential, two things need to happen. First, Fairfax County should rezone the property for higher density and mixed-use development to fit with the larger vision for Tysons Corner. Second, the county should start planning for high-quality transit service to North Tysons that can not only support future redevelopment, but be financed by it as well.
Street section of light rail on Jones Bridge Drive. Image from the Tysons Comprehensive Plan Amendment.
The Tysons Comprehensive Plan refers to a light rail circulator that would serve parts of Tysons Corner that are far from the Silver Line. The estimated cost of a 2.5-mile light rail line along Jones Bridge Drive between the future McLean and Spring Hill Metro stations (via a future bridge over Scotts Run) is about $60 million.
This assumes that Jones Bridge's existing right-of-way could accommodate a new rail line. Let's take a worst-case scenario and say the county would need an additional $40 million in right-of-way. For approximately 200,000 square feet of land, that comes out to a very conservative $8.8 million per acre.
With a floor-area ratio (FAR) of 3.0, Freddie Mac's 37.8 acres could easily support 5 million square feet of development. (To compare, the property's current FAR is about .5, and the maximum FAR allowed in downtown DC is 10.) If the county rezoned the property, they could also levy a special tax as was done for rezoned properties associated with the Silver Line, or to cover school and public safety improvements.
At the current assessed price per square foot, a fully built-out development on this property would have assessed value of $2.1 billion, generating $23.1 million in taxes to Fairfax County and $2.1 million in special taxes each year. The county could initiate a bond using the special tax as backing that could pay for all capital costs associated with the light rail.
Is this all pie in the sky? Of course, as is the case with all long-term planning, everything over the course of 20 or 30 years is an assumption based on reasonable estimates created from a past history. If Tysons' critics are right, it may struggle to get development activity going, and vacancy rates could be high enough to undermine the marketability of such a land transfer. If that were the case, the above scenario would not be necessary.
So far, that's not the case. Land sales in Tysons have garnered a lot of private interest, especially for large corporate campuses. If those trends continue, Freddie Mac could sell their property to a developer in the future, and the county as well as taxpayers could really benefit. It would also be a step towards creating a new type of infrastructure in Tysons, giving more options to commuters, workers, shoppers, and residents.
What the sprawl history of Tysons has taught us is that if you don't plan for the future, you are destined to end up with a disconnected mess. Instead of leaving the Freddie Mac property to deteriorate or hoping for a new corporate tenant, Fairfax County needs to plan their next steps and leverage future changes to the benefit of Tysons and the county.
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