Millions in anticipated tax revenue and expense to utility users are at the center of a squabble between the Alexandria Sanitation Authority and the city's planning commission.

The sanitation authority is trying to acquire a 10-acre property next to its 33-acre plant through an eminent-domain seizure. Authority representatives say the plant must be expanded in order to install a mandatory backup power system and meet stricter water quality regulations that will take effect in 2011.

The city, however, planned four years ago to encourage development of a high-density office, retail and residential neighborhood on the parcel, which is strategically located near Interstate 395 and the Eisenhower Avenue Metro station. The Sanitation Authority did not participate in the planning process at the time.

Nearby buildings offer an idea of the real estate taxes that could be levied if the property were developed. The city proposes a 512,000-square-foot office building and a 170,000-square-foot residential building as part of its Eisenhower East Small Area plan.

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Alexandria billed two nearby office buildings more than $1.2 million in taxes this year.

One building comprised only 215,000 square feet and the other 175,000 square feet.

“We’re talking about loss of revenue to the city, loss of the view (from the Beltway),” Eric Wagner, chairman of the planning commission, said at a meeting late Tuesday.

In a further complication, the planning commission’s view of how the land can be used supports a much higher assessment of its value. The owners, Charles Hooff and John Fagelson, who are fighting the seizure, assert the land is worth $51 million. The Sanitation Authority insists it cannot be developed as extensively as both the owner and the commission say because of how close it is to Cameron Run and one of its tributaries. The Authority asserts the land is worth only $20.4 million.

The plant is surrounded by a national cemetery, Lee Recreation Center, existing neighborhoods, and the Beltway, General Manager Karen Pallansch told the commission Tuesday.

The land the Authority is attempting to buy is the only suitable spot, Pallansch said.

mhegstad@dcexaminer.com