The Alexandria City Council unanimously approved the first phase of a $135 million funding plan to turn an old power plant in Old Town North into a 2.5 million square foot mixed-use development featuring housing, restaurants and new parks.

The HPR Group purchased the old Potomac River Generating Station in 2020 after it had been closed for over a decade.

On Saturday, the city council approved development special use permits for the first phase of the site’s redevelopment, as well as a tax increment financing package to support the public infrastructure investment.

“I think it is worth pausing for a little fanfare. This is a significant development, and I cannot wait to see a lot more activity in Old Town North,” Vice Mayor Sarah Bagley said following the vote.

The project will divide the nearly 19-acre site into several sections. It would include an arts and cultural center, offices and retail space, condos and apartment buildings and a waterfront park, which would have about three acres of new park space and upgrades to nearby land that the National Park Service oversees.

The city council’s approval comes following a unanimous recommendation for DSUP approval by the Alexandria Planning Commission on June 2. The 30-year financing plan for the project costs around $135 million.

Work on the first phase of the project, which includes demolition of the power plant while construction begins on another part of the parcel, could begin next year.

Some residents have expressed concern about the demolition process and the impact it could have on the surrounding neighborhood, including traffic concerns.