www.sfdc.orgThe Southeast Fairfax Development Corporation is a 501(c)3 non-profit, dedicated

to promoting the redevelopment and revitalization of the Richmond Highway corridor of U.S. Route 1 from the Beltway to Fort Belvoir.

www.sfdc.org

Annual Report 2016

The Southeast Fairfax Development Corporation

"Progress By Design"

03Your Company Name SFDC

Above: Penn Daw, approximately late 1970's at the intersection of Richmond Highway and North Kings Highway. Left, a map of the Penn Daw Community Business Center by Bowman Consulting. Above and left: 1) The Shelby, 2) South Alex, and 3) Novus Kings Crossing

In Focus: Penn Daw..............................................................Page 2

Our Mission.........................................................................Page 4

Greetings..............................................................................Page 5

Our Community..................................................................Page 6

Snapshot 2016......................................................................Page 8

SFDC in the Lead.................................................................Page 9

Transformation..................................................................Page 10

Fort Belvoir and BRAC......................................................Page 10

Embark Richmond Highway..............................................Page 11

Economic Development: Dollars & Sense..........................Page 12

On the Horizon...................................................................Page 13

Operations..........................................................................Page 14

Governance & Sponsors......................................................Page 15

Table of ContentsThe Shelby, left, completed in 2014, was developed by Insight Property Group. It was sold to Passco, an institutional investor, in 2016 for $70 million.

Penn Daw is increasing in density, due to its proximity to Metro and the Capital Beltway. The first multifamily development, The Shelby by Insight Property Group, was completed in 2014. Two more multifamily developments are on the way: South Alex by Combined Properties, right and number two above, in the old Penn Daw Plaza and Novus Kings Crossing by Cafritz, number three above, but not pictured.

There are 11 wayfinding signs along Richmond Highway

In Focus: Penn Daw

03

04 SFDC 05 SFDC

Our MissionTo develop, implement and support projects designed to stimulate economic growth in the Richmond Highway Corridor by working closely with business owners, developers and local residents.

Southeast Fairfax Development Corporation (SFDC) is a 501(c)(3) nonprofit economic development organization dedicated to promoting the redevelopment and revitalization of the Richmond Highway Corri-dor of U.S. Route 1 from the Beltway to Fort Belvoir in Fairfax County, Virginia. Since 1981, SFDC has helped direct nearly $2 billion of private investment to the Richmond Highway corridor. As southeast Fairfax County continues to grow with more residents and new businesses, our organization serves as a helpful resource for business owners, developers, property managers, and members of the community.

On behalf of the Southeast Fairfax Development Corporation’s Board of Directors, it is my pleasure to present the Fiscal Year 2016 Annual Report.

The past year has seen a continuation of economic development activity in the Richmond Highway Corridor, includ-

ing new multifamily and commercial development. The Richmond Highway Corridor is the second-busiest area of development in Fairfax County. In the last five years alone, new projects have increased real estate tax revenues by more than $3 million annually, benefitting all county services and reducing pressure on residential real estate taxes. One of SFDC’s especially successful initiatives has been our quarterly Summits. The summits are business resource events that connect the community with experts to talk about various topics pertaining to the revitalization of Richmond Highway. We are also delighted to report that our Business Roundtable Speaker Series, which provides speakers focusing on topics such as education, networking, business diversity, and other issues affecting small businesses, has been sustained through three years with private grant and sponsorship funding.

I welcome the opportunity for our investors and Board members to carry on our proactive role in talking to col-leagues and business associates about the mission of the SFDC. As President, I am humbled by our board members’ attendance at our events and their investment in redeveloping and revitalizing the Richmond Highway Corridor.

I am grateful for the opportunity to serve as your President; I appreciate all your support for a better community, and look forward to working with you for the benefit of the Richmond Highway Corridor.

Walter Clarke

PresidentSoutheast Fairfax Development Corporation

The Southeast Fairfax Development Corporation functions through a network of essential stakeholders in addition to our Board of Directors and professional staff. This network includes area elected officials, Fairfax County staff, the development industry, other organizations, and our neighborhood

residential community. We have been deliberate and strategic in our approach to marketing the attributes of the Richmond Highway Corridor, always keeping in mind we are funded mainly by taxpayer dollars. We appreciate our strategic business partners (see page 15), who are instrumental in helping SFDC continue to market and promote the advantages of the Corridor, and to host quality programs that assist small businesses, the development industry and local residents. We take seriously our fiduciary responsibility to use all funds in an efficient and effective manner.

We understand the importance of building coalitions and leveraging resources to increase the viability of the Richmond Highway Corridor as a strategic location for doing business. As separate entities we can only do so much, but together we can become a powerful voice for encouraging quality development, generating new job opportunities and attracting new investment. In addition to our private partners, our public partners include the U.S. Small Business Administration, the Virginia Department of Business Assistance, the Fairfax County Office of Community Revitalization, the Fairfax County Office of Public/Private Partnerships, Visit Fairfax and the Fairfax County Economic Development Authority. All of these partnerships have been instrumental in helping SFDC to continue to market and promote the Richmond Highway Corridor as a place to live, work, and play.

Edythe Kelleher Executive Director Southeast Fairfax Development Corporation

Greetings

07 SFDC

6 CBCs

The nine-mile stretch of Richmond Highway covered by SFDC is a designated Community Revitaliza-tion District (CRD), which allows for expedited land-use and zoning review. The CRD contains six Com-munity Business Centers (Right, depicted in yellow), defined by Fairfax County as: "Areas where redevelopment should encourage a mix of uses focused around a core area of higher intensity, such as a town center or main street in a pedestrian-oriented setting. Transitions in intensity and compatible land uses should protect surrounding stable residential neighborhoods."

9 Miles

SFDC covers nine miles along the Richmond Highway Corridor of US Route 1 in Fairfax County from the Capital Beltway (I-495) to the Fairfax County Parkway.

112,774 Corridor Population

43,017 Households

37 Median Age

71% Retail 17% Office 12% Lodging

Our Community 40,000

Employees on Fort Belvoir 3 Historical Sites: 1) George Washington’s Mount Vernon Estate 2) James Madison’s Woodlawn Manor 3) George Mason’s Gunston Hall

$95,680 Median Income

Sources: US Census, Table S1903, American Community Survey, 2009-2013 5-yr Estimates; Urban Analytics, Inc., "A Sample of Public Revenues and Economic Impacts of Various Land-Uses Along the Richmond Highway Corrdior in Fairfax County, Virginia: 2009, 2013, and 2014

Sources: US Census, Table S1903, American Community Survey, 2009-2013 5-yr Estimates; Urban Analytics, Inc., "A Sample of Public Revenues and Economic Impacts of Various Land-Uses Along the Richmond Highway Corrdior in Fairfax County, Virginia: 2009, 2013, and 2014"

SFDC 06

09 SFDCSFDC 08

9Multifamilyprojects have been completed, are under construction, or have been planned and approved for construction.

Below: In 2016, MRP Realty completed The Parker, a four to six story, 360 unit, multifamily building adjacent to Huntington Metro Station.

17 Hosted Events by SFDC, including:

6 Business Roundtable Speaker Series (Educational events for local businesses, such as government contracting for small businesses and digital marketing)

4 Summit Series Events

(Educational summits with a focus on macro topics, such as transportation and trends in the restaurant industry)

Snapshot 2016 7 Hotels have been completed, are underconstruction, or have been upgraded.

Above: Baywood Hotels completed its fourth hotel on Richmond Highway in 2016, a TownPlace Suites by Marriott, in Woodlawn, near Fort Belvoir.

SFDC in the LeadA Conduit for Change:

Embark Richmond Highway is the project name for Fairfax County's widening of Richmond Highway, construction of Bus Rapid Transit (BRT) along the corridor, and reconfiguration of the area Comprehensive Plan. Six SFDC board members serve on the Advisory Group, which is the body that advises county staff on project development, execution, and community outreach.

The Embark Richmond Highway Advisory Group

SFDC, and Mount Vernon and Lee Chamber of Commerce, hosted the Economic Outlook Summit (Photo, left), featuring the nation's leading economists along with regional and local academics and experts, to give the more than 150 attendees a multi-layered and comprehensive portrait of the economy in Southeast Fairfax County.

2016 Economic Outlook SummitMarketing and Thought Leadership:

Left to right: Ed Long, County Executive, Fairfax County, VA; Edythe Kelleher, Executive Director, SFDC; Dr. Ann Battle Macheras, Director of Research, The Federal Reserve Bank of Richmond; Dr. Lawrence Yun, Chief Economist, National Asso-ciation of Realtors; Dr. Mark White, Deputy Director and Economist, Center for Regional Analysis, George Mason University (Pictured); Dr. Terry Clower, Director and Economist, Center Regional Analysis, George Mason University(Not pictured); Jane Gandee, President, Mount Vernon-Lee Chamber of Commerce; Michael Neibauer, Reporter, The Washington Business Journal; Scott Stroh, Vice President, Mount Vernon-Lee Chamber of Commerce; Dr. Jerry Gordon, President and CEO, The Fairfax County Economic Development Authority.

$91m New construction

$15mRenovations & upgrades

79 Highway

Beautifiers(Mary Thonen Beautification

Award Participants)

In the past five years:

In the past three years:

11 SFDC10SFDC

TransformationRichmond Highway is on the cusp of change. The growth of Fort Belvoir, the opening of MGM Casino at National Harbor in Maryland, and the relocation of the National Science Foundation to the Eisenhower Valley have all contrib-uted to development along the corridor. Furthermore, Fairfax County is planning what is perhaps one of the most unique transportation and land-use initiatives on the East Coast: Embark Richmond Highway. The project will widen Richmond Highway from the Beltway to Fort Belvoir, include a fully dedicated Bus Rapid Transit (BRT) line, and plan a new grid of streets in each of the corridor's six CBC's.

BRAC and Fort Belvoir

Embark Richmond Highway"Embark Richmond Highway is a multi-year effort involving land use, transportation planning, design and construction, which will result in a bus rapid transit system to operate primarily on dedicated lanes along Richmond Highway. The stations will run initially from the Huntington Metrorail Station to Fort Belvoir and will include a possible future extension of the Metrorail Yellow Line to Hybla Valley." Fairfax County website, http://www.fairfaxcounty.gov/news2/embarking-on-the-future-of-richmond-highway/

$400,000A $400,000 competitive grant was awarded to Fairfax County Department of Transportation (FCDOT) for land-use planning by the Federal Department of Transportation.

SFDC proudly partnered with FCDOT on the grant application.

What is BRT?BRT is an acronym for Bus Rapid Transit. According to the National BRT Institute, BRT "is an innovative, high-capacity, lower-cost public transit solution that can achieve the performance and benefits of more expensive rail modes. This integrated system uses buses or specialized vehicles on roadways or dedicated lanes to quickly and efficiently transport passengers to their destinations..."

Above: A map of the proposed BRT line and stations. The map also includes the corridor's CBCs.

Belvoir Square (pictured, above and below), a joint venture between Chesapeake Realty Partners and Eastwood Properties, is a 283 unit, mixed-use, multi-family development adjacent to Fort Belvoir's Tulley Gate.

Rapid growth. By 2030, Fort Belvoir will employ 55,000 service members and civilians. The Base Realignment and Closure Commission (BRAC) has consolidated agencies and organizations within the Department of Defense onto Fort Belvoir. The result has been a growth of development along the southern end of Richmond Highway, such as Belvoir Square, a mixed use project adjacent to the base, and three new hotels.

Above: Fort Belvoir Community Hospital, completed in 2013. Above background: Fort Belvoir Community Hospital under construction

$57million Insight Property Group, through joint ventures, aquired

two apartment complexes near Fort Belvoir in SFDC's coverage area, for a total of $57.45m.

Source: Washington Business Journal

Map: Fairfax County Government

12SFDC

2009

Single Family 807 $479,000 $386,553,103 $108,000 $87,317,400

Town Homes 498 $198,567 $98,886,556 $48,600 $24,202,800

Condominiums 292 $167,561 $48,927,870 $41,300 $12,059,600

Total 1,597 $534,367,529 $123,579,800

Weighted Average $334,604 $77,382

Total Units

Average Real Estate

Market Value

Total Real Estate

Market Value

Average Imputed

Houshold Income

Aggregate Imputed

Household Income

2013

Single Family 827 $587,421 $485,796,889 $122,400 $101,224,800

Town Homes 355 $325,157 $115,430,648 $71,900 $25,524,500

Condominiums 228 $217,143 $49,508,544 $49,200 $11,217,600

Total 1,410 $650,736,081 $137,966,900

Weighted Average $461,515 $97,849

2014

Single Family 734 $634,435 $465,675,357 $134,600 $98,796,400

Town Homes 381 $336,005 $128,017,932 $75,700 $28,841,700

Condominiums 277 $252,041 $69,815,320 $58,100 $16,093,700

Total 1,392 $663,508,609 $143,731,800

Weighted Average $476,538 $103,256

2015

Single Family 535 $587,456 $314,288,883 $121,000 $64,735,000

Town Homes 211 $348,368 $73,505,752 $75,900 $16,014,900

Condominiums 135 $237,302 $32,035,761 $52,900 $7,141,500

Total (3) 881 $663,508,609 $87,891,400

Weighted Average $476,538 $99,763Source: County of Faifax, VA; Long & Foster; Burke & herbert Bank; Urban Analytics, Inc Note: 1 Reflects actual units sold. Does not include units not-for-sale or units listed for-sale.2 Through June 30, 2015.3 In current year dollars.

10 SFDC

The Richmond Highway Corridor is second only to the Tysons Corner-Silver Line Corridor in economic development in Fairfax County. The corridor serves as a gateway to the growing areas of Fort Belvoir, the Eisenhower Valley and Old Town in Alexandria, Arlington, Washington DC, and the National Harbor in Maryland. Demand for walkable and pedestrian-friendly multifamily build-ings will continue to add residents to the Richmond Highway Corridor.

The table below displays residential sales data1 in 2009, 2013, 2014, and 20152, in zip codes 22303, 22306, 23307, 22308, and 22309. Sales prices have increased by 42% since 2009, and reflect growing demand for housing. The decline in imputed household income from 2014 to 2015 is primarily attributable to a national decline in 30-year fixed rate mortgate funding

Economic Development Dollars & SenseOf the total 5,514,512 non-residential square footage along the corridor, 71% or 3,915,008 sq ft is retail, 17% or 936,799 sq ft is office, and 12% or 662,325 sq ft is hotel and lodging. Assessed values remained flat in 2015, however, once a property had been redeveloped, its valuation increased substantially. Since January 2011, there have been over 20 private developments along the Richmond Highway Corridor, that resulted in an additional $3 million in annual real estate tax revenue for Fairfax County. The table below displays non-residential real estate data along the Richmond Highway Corridor for 2009, 2013, 2014, and 2015

The Parker, built by MRP Realty for $80m, opened in May of 2016

The Shelby, built by Insight for $60m, opened in August 2014

Richmond Highway Economic Development Facts: Fairfax County is an attractive place to live. Property values are driven by the county's location and services it provides, such as the school system, parks and recreation, and transportation.

Year Total Assesment Value Percent Change2009 $1,181,987,5302013 $1,254,939,720 6.17%2014 $1,268,104,450 1.05%2015 $1,280,752,030 1.00%

The Multiplex Cinema became Costco in 2013

On the HorizonThe Richmond Highway Corridor is also home to many unique development projects. The corridor's age and early development, relative to most other areas in Fairfax County, requires creative applications of land-use to meet area and regional demand. Among the unique projects are the re-use of the Original Mount Vernon High School, a structure built in 1939, atop 22 acres. In 2016, the Islamic Saudi Academy exited the Original Mount Vernon High School, where it had been a tenant since 1985. A citizen task-force made suggestions for the structure's future use. Another project is the the North Hill development. The Fairfax County Redevelopment and Housing Authority (FCRHA) owns a vacant 33-acre parcel on the east side of Richmond Highway at the intersection with Dart Drive. The developer, CHPPENN, a partnership between Virginia-based Community Housing Partners (CHP) and Pennrose, has proposed 278 units in six multifamily buildings, structured parking, and 195 for sale town homes.

North Hill

Chipotle in the Beacon Hill Shopping Center, owned by Saul Centers, Inc, a real estate investment trust

For every $1.00 spent locally by new residents, 48 cents is added to Fairfax County. (Source: Urban Analytics, Inc)

$1.48

3 High Schools, 6651 students3 Middle Schools, 3,344 students

15 Elementary Schools, 10,935 students. (Source: Fairfax County Government)

21 Schools

Average annual ridership of Fairfax Connector routes serving Richmond Highway (Source: FCDOT, data averaged by SFDC)

112,233 Passengers

1895 Acres Of protected wetlands and park space in Huntley Meadows and Dyke Marsh.

(Source: Fairfax County Government and Friends of Dyke Marsh)

Source: County of Faifax, VA, Department of Tax Administration; Urban Analytics, Inc Note: 1) Raw data smoothed by Urban Analytics to eliminate duplicative tax map number and assessed valued entries in the database.

The Original Mount Vernon High School

14SFDC

Marketing and promotion $15,087

In-kind program space expense $3,300

Beautification and landscaping $0

Facade improvement $0

Special projects and Mary Thonen Awards $255

Total direct expenses $18,642

Fairfax County (base grant) $183,320

Private sector contributions $19,750

In-kind program space contributions $3,300

Interest income $510

Total revenues $206,880

Direct Expenses

Salaries $41,623

Employee benefits and taxes $17,793

Contracted services $90,900

Total personnel services $150,316

Personnel Services

Accounting and Legal $1,000

Information technology $2,411

Depreciation $0

Dues and subscriptions $2,044

Insurance $1,746

Meetings and seminars $1,456

Office expenses $1,417

Postage $147

Payroll service and bank fees $1,378

Professional staff development $500

Supplies and small equipment $702

Rent and utilities $10,797

Taxes and licenses $27

Telephone and internet $2,184

Travel $893

Total operating expenses $26,702

Total expenses $192,360

Net operating result $14,520

Operating Expenses

Total Expenditures

Expenditures

Revenues

Operations of SFDCWe are a 501(c)3 nonprofit that relies on financial support from grants, sponsorships, and in-kind donations. Without the backing of our private and public partners, we would not be able to provide the programs, information, and educational events that foster growth and development along the Richmond Highway Corridor. If you are interested in becoming a partner in the revitalization of the Richmond Highway Corridor, please visit www.sfdc.org or contact us directly at info@sfdc.org

SFDC Staff Edythe Kelleher, Executive Director

Daniel Lagana, Communications DirectorEleni Goulias, Administrative Assistant

Fairfax County SupervisorsDan Storck, Mount Vernon Magisterial District Jeff McKay, Lee Magisterial District

Sponsors & Supporters of Revitalization

GovernanceSFDC 2016 Board of Directors

Executive Committee:Walter Clarke, Burke & Herbert Bank, President

John Thillman, Landmark Atlantic, Vice PresidentBruce Leonard, Streetsense, Treasurer

Karen Pohorylo, Community Volunteer, Secretary

Anthony "Tony" DeLorenzo, Fairfax County Office of Community RevitalizationKaty Fike, McEnearney Commercial Real Estate and the Mount Vernon-Lee Chamber of Commerce

Carlos Heard, Saul CentersRichard "Dick" Knapp, Community Volunteer

Tim Mulcahy, Lennar Multifamily Vik Patel, Baywood Hotels

Christopher Soule, Lee District Association of Citizens Organizations Rebecca "Becky" Todd, Community Volunteer

Mark Viani, Bean, Kinney & Korman, P.C.Ellen Young, Mount Vernon Council of Citizens Associations

Richmond Highway, 1960 Photo: SFDC Archives

The Dixie Pig, now the Rite Aid on Beacon Hill.Photo: SFDC Archives

SFDC15

The Southeast Fairfax Development Corporation 6677 Richmond Highway, Second Floor

Alexandria, VA 22306

(703) 360-5008www.sfdc.org

Southeast Fairfax Development Corporation

This annual report could not have been possible without the invaluable contributions of West Potomac High School Arts Students, Carlos Miguel Lopez Acquino and Lindsay Daffron James, who captured many of the beautiful photographs contained in this document. This report was prepared in coordination with Edythe Kelleher, Executive Director, SFDC, Daniel Lagana, Communications Director, SFDC and primary author, and Walter Clarke, President, SFDC.