The Arlington County government’s longstanding land deal with developer JBG Smith in the Courthouse area is in the process of being extended, and now potentially could run into the 22nd century.
Arlington officials on March 5 announced that both sides had signed a letter of intent, agreeing in principle to a restructuring of the ground lease that JBG Smith holds on government-owned land in the 2100 to 2300 blocks of Clarendon Boulevard and the adjacent movie-theater parcel on Courthouse Plaza.
The county government in the 1980s entered into the agreement, receiving lease payments for the land while also renting office space for the county-government headquarters on the site. Under the revamped ground-lease agreement, the agreement potentially could run another 98 years.
Under the restructured agreement:
• JBG Smith would provide the Arlington government with a one-time payment of $18 million this year.
• JBG Smith would pay $2.5 million per year in rent for the land for the first three years, $3.5 million for the fourth year, and then the rent would be subject to escalation of 2 percent per year thereafter. Every 20 years, there will be an adjustment made to account for inflation, not to exceed 10 percent each occurrence.
• JBG Smith remains responsible for taxes and maintenance costs on the land.
• JBG Smith can sell all or a portion of its ground lease, but if it disposes of more than 40 percent of its holdings, the county government would receive a pre-determined portion of the proceeds.
• County-government approval would be required for any JBG Smith alterations on the parcels that exceed $20 million.
• JBG Smith will have the option to extend the agreement to Dec. 31, 2119 (a Sunday, in case anyone is planning ahead), but has to execute that provision between 2047 and 2052.
The letter of intent, which is not binding until codified in a lease-modification agreement, also makes some minor changes to the county government’s lease on the Ellen M. Bozman Government Center at 2300 Clarendon Blvd.