Arlington County and JBG Smith (JBGS) have entered into a letter of intent to restructure the ground leases of 2100/2200 and 2300 Clarendon Boulevard and the theater parcel in the Courthouse Plaza complex. The County owns the land under these three properties while JBGS owns the buildings. The LOI agreement states the County will provide JBGS the option to extend the leases from the current expiration in 2062 to 2119.
Under the current leases, annual rent paid by JBGS to the County has varied significantly, ranging from $100,000 to $3.9 million. The new agreement would modify the annual lease payments to fixed rates and will include a one-time lump sum of $18 million paid by JBG Smith upon execution of the leases.
“This revamped deal is great news for County taxpayers,” said County Manager Mark Schwartz. “These terms will bring in additional revenue over the term of the extension. It also allows us to stay in the prime Courthouse location, which has been home to County Government operations since 1989.”
Letter of Intent Details
- The current leases will be restructured into three ground leases for 2100/2200 Clarendon Boulevard, the theater building, and 2300 Clarendon Boulevard.
- JBGS would make a single $18 million payment at execution of the agreement. This funding was included in the County Manager’s Proposed FY22 budget and primarily was utilized toward a contingent to address COVID-19 impacts in the next fiscal year.
- Rent would be $3.5 million per year, plus 2 percent annual escalations and 20-year inflation adjustments not to exceed 10 percent. For first three years, the rent will be reduced to $2.5 million.