Alexandria Plans to Borrow $190.7 Million for Major City Projects
By Pat Malone | Zebra Press Staff
ALEXANDRIA, VA — The City of Alexandria plans to issue $190.7 million in tax-exempt general-obligation bonds later this year to help finance major projects involving George Mason Elementary School, the waterfront and City Hall.
The borrowing comes as Moody’s Ratings and S&P Global Ratings have again awarded Alexandria their highest possible credit ratings, Aaa and AAA, respectively. Alexandria has maintained the highest ratings for 35 consecutive years.
The ratings allow the city to borrow at lower interest rates when financing schools, public buildings, infrastructure and other long-term projects.
The city has not publicly provided a project-by-project breakdown showing how much of the $190.7 million will be used for each of the three projects.
George Mason Elementary
Part of the bond proceeds will help finance the modernization of George Mason Elementary School. The Zebra recently reported that the rebuild has reached its halfway point.
The school was originally built in 1939 and expanded several times over the years. According to the City’s joint capital-planning page, the project will preserve the original portion of the building, remove later additions and construct a new two-story building.
The completed school is being designed for approximately 670 students in pre-K through fifth grade, along with about 80 teachers and staff members.
In fall 2023, the Alexandria City School Board budgeted $87 million in capital improvements for the project. The planned bond issuance will help finance the George Mason modernization and does not represent an additional $87 million project.
City Hall and the Waterfront
Bond proceeds will also support initial work on the renovation of Alexandria City Hall and the next phase of the Waterfront Improvement Project.
City Hall is undergoing a major renovation intended to modernize the building while keeping city government at its historic Market Square location. The Zebra’s recent City Hall renovation guide explains the scope and timeline of that work.
The waterfront project is part of Alexandria’s continuing work to improve public spaces and reduce flooding along the Potomac River.
Both are among several major capital projects Alexandria expects to finance over many years.
Alexandria’s Long-Term Borrowing
The $190.7 million issuance is part of a much larger capital program involving schools, transportation, stormwater infrastructure, public buildings, parks and other city facilities.
General-obligation bonds allow Alexandria to spread the cost of long-term public projects over many years rather than paying their entire cost from a single annual budget.
That borrowing also creates long-term debt-service obligations.
Alexandria’s FY 2027 capital-planning documents project debt payments associated with George Mason Elementary through 2048, City Hall and Market Square through 2049, and the Waterfront Flood Mitigation Project through 2050.
Those dates show how capital projects being financed today can remain part of the city’s budget for more than two decades.
Why the Credit Rating Matters
Alexandria’s credit rating affects the cost of borrowing.
S&P said Alexandria’s AAA rating reflects an expanding local economy with economic measures stronger than national averages, along with conservative management practices, strong reserves and positive revenue trends.
S&P also rated Alexandria “above the sovereign,” saying it believes the city could maintain better credit characteristics than the United States in a financial stress scenario.
Alexandria must repay the principal on its bonds along with interest.
The final interest rates and repayment terms for the $190.7 million issuance will determine how much the borrowing ultimately costs.
The city’s highest possible ratings help Alexandria secure lower interest rates when issuing bonds.
The $190.7 million will help finance projects residents will see throughout Alexandria, including a modernized elementary school, improvements along the waterfront and the renovation of City Hall.
Alexandria taxpayers will repay that borrowing over the years ahead.
