Today in Pictures - Boilermaker Shops

With exterior construction of the boilermaker retail building complete, southeast DC will soon have its own retail pavilion in one of the city's more exciting venues.  Forest City started construction on the project in late 2011, turning the century old boilermaker building of the Navy Yard into a waterfront retail locale for destination restaurants.  With exterior work complete, tenants are now beginning to build out their restaurants, which should put opening day next spring.  On track so far are Buzz Bakery and Blue Jacket brew pub, both operated by Neighborhood Restaurant Group.  Blue Jacket, named after the common apparel for navy personnel, will take the end space (on 4th) with walls of glass reaching 3 stories to the steel raftered ceiling.  On tap at the opposite end (on 3rd) is Willie's Brew & Crew (a sports bar & barbecue) from restaurant mogul Xavier Cervera, as well as a drycleaner.  BRB, which had originally signed on, is no longer on the list, but officials say a burger joint is likely.  Across the street construction is underway on a new apartment building, Harris Teeter, and now a Vida Fitness.

Washington DC retail news

Forest City's Parcel D: The Yards Gets Moving

Last month Forest City presented their updated plans for a mixed-use development at the Yards to the local ANC, gratefully receiving a vote of approval. The National Capital Planning Commission (NCPC) also voiced their support for the project earlier this year. And now the proposal, which sees rental apartments stacked atop ground floor retail, goes before the Zoning Commission next month in hopes of earning final approval. Dubbed "Parcel D," the project is one of the first phases of new construction at The Yards, a Southeast waterfront redevelopment site that will eventually feature 2,800 residential units, 1.8 million s.f. of new office space, and 400,000 s.f. of retail shops and dining places. Forest City already delivered the promised 5.5 acre, riverfront Yards Park early this summer. An expansive, vacant parking lot currently occupies the development site at the southeast corner of 4th and M St.

Under their current Parcel D plans, two towers totaling 225 apartments (20% of which will be offered as affordable housing at 50% of AMI) will rise 102 feet in the air, extending from a single differentiated base structure that will house the 50,000 s.f. grocery store (rumored to be Harris Teeter) a 30,000 s.f. health club, and a few smaller "neighborhood-serving" retail spaces. Developers are in final negotiations with several tenants, and will make announcements as soon as leases are executed, for now renderings reveal them simply as "grocery" and "health club." Below grade parking will serve the retail uses, while a third floor parking deck sandwiched between the grocery store and apartment towers will provide spaces for residents.

Project Manager Alex Nyhan of Forest City told ANC6D that he and his team were optimistic that the predicted LEED Silver certification could be upgraded to an ambitious Gold rating by the project's end. Shalom Baranes is responsible for the building design, which has evolved significantly over the last three years as architects and developers responded to the suggestions of the HPRB, the NCPC, and the surrounding community. While plans are firming up, there is still plenty of work to be done. Senior Vice President of Development Ramsey Meiser at Forest City explains that even if all goes swimmingly next month at the zoning hearing, architectural plans will still need to be finalized, and building permits must be secured, likely a six to ninth month process. "I'm hoping to have construction under way by the middle part of next year," Meiser says. Once a groundbreaking happens, excavation and subsequent construction is expected to last 20-24 months.

Washington D.C. Real Estate Development News

New Tenants for New Developments

Less than a week after Deputy Mayor Neil Albert assured the development community that prominent organizations would "still [be] leasing space here in the District," his words appear to be ringing true. Several developers behind major projects in both Washington and Northern Virginia have announced freshly inked deals this week, despite the tubercular state of real estate market.

Forest City's sprawling Southeast Waterfront development, The Yards, went public on Monday with news of two new tenants for the project's retail component - the Boilermaker Shops at 200 Tingey Street SE. Delaware-based brewery, Dogfish Head, has signed on to open a brewpub in the converted nautical manufacturing facility, as Forest City also nears an agreement with an as-of-yet unnamed jazz club for the site. Once completed in 2010, the Boilermaker Shops will boast 45,000 square feet of retail and up to five in-house restaurants.

Forest City’s slate at the Yards also includes a commercial office building at 401 M Street SE – which, according to the Washington Business Journal, will soon be home to the District’s third Harris Teeter grocery store. Also on the brown bag front, there is talk of a Whole Foods Market for the William C. Smith & Co.’s neighboring Square 737 project.

Over in the District’s second development hotspot, NoMa, another project nearing completion is also rapidly running out of vacancies. J Street Development’s 90,000 square foot condo complex at 111 K Street NE now has confirmed three not-for-profit organizations as soon-to-be tenants: the Sierra Club, the National Association of Student Personnel Administrators and, most recently, YWCA USA – the latter of whom will occupy the building’s entire 11^th floor. According to sources at the NoMa BID, the Gensler-designed building is now 60% leased and will deliver on-time in 2010.

Meanwhile, projects across the river in Arlington are working towards deals with even the most cash-strapped of clients – like the Arlington County government. The Monday Properties-controlled site at 1101 Wilson Boulevard (the pre-2002 home of the Newseum) is being pursued by the County Board as the possible site of a new Cultural Center – as part of a sweetheart deal the developer cut with the Arlington officials late year to facilitate the much beleaguered development of their project at 1812 North Moore Street.

County authorities estimate that it would take $4 million to convert the 53,826 square foot facility into a viable cultural venue. However, Monday won’t be seeing one cent from the County until next year’s numbers start to become clearer. “I will only recommend proceeding with the center once the County’s 2010 budget is clear, and only if a viable center can be developed with no new general tax revenues,” said County Manager Ron Carlee in a prepared statement.

If the County passes on the deal, the space will be given back to Monday “in exchange for approximately $10 million for the value of the public benefits.” At present, the terms of the deal would allow the County to occupy the space rent-free for the first 10 years of a 15 year lease. The Rosslyn Business District has already contributed $1 million towards construction costs associated with retrofitting the former museum.

Neighborhood Report: Capitol Riverfront Southeast

"Our neighborhood is no longer emerging," said Michael Stephens, Executive Director of the the Capitol Riverfront Business Improvement District. "It has blossomed." Stephens cites 35,000 people who commute to work in the area every day and the rising number of residents to buttress the growing retail imprint just north of the Anacostia River.
Retail, restaurants and office space leases are filling in at a more rapid rate than counterpoint emerging neighborhood NoMa, where the snap-up of square footage has been dominated by office leases. Sexier retail - even indie tenants such as as Pound Coffee have defected to Capitol Hill, while Capitol Waterfront is a hot commodity for retailers.
It helps that temporary projects draw the young and artsy to the water - Trapeze School Washington, Sensorium Dining and Art at the Yards generate buzz. Then there's the developing Canal Park that's scheduled to open in May 2012, Yards Park which opened last year, and Diamond Teague Park that was completed in 2009. In the meantime, enter the bridge to connect the two parks. And of course there's the ball park.

Many completed office buildings have lassoed tenants. Monument Realty's 55 M Street S.E. is 86% leased, with tenants such as the FAA and DDOT. Several D.C. government offices plan to move to the neighborhood in the second quarter, and this month Booz Allen Hamilton moved into 20 M Street, bumping the building to 97% leased. And 1015 Half Street, the former Opus East LLC and Prudential Real Estate Investors partnership that was resuscitated by Skanska this past May, is slated to open in July.

Both Lumber Shed at The Yards Park Pavilion and The Yards Boilermaker Shops are among the most anticipated retail projects. Both buildings - the Lumber Shed at 100 Water Street and Boilermaker Shops at 200 Tingey Street - are part of the National Register of Historic Places, with Forest City Washington as developer and Gensler shepherding construction and design. Among other tenants, Neighborhood Restaurant Group has signed a lease for a restaurant that's expected to become a brewpub. According to Ramsey Meiser, Senior Vice President of Development at Forest City, 50% of the Lumber Shed and 70% of the Boilermaker Shops leases are tied down. Estimated opening date is early 2013.

Over at 400 Tingey Street S.E., Michael Stevens confirms that "a major health club" is signing a lease for 30,000 s.f. of this Forest City cite; sources tell DCMud that said major health club is VIDA Fitness, and that the lease is a done deal.

Also destined for the block at 401 M Street is a 50,000 s.f. Harris Teeter, above which will rise two residential towers with 220 units, with 20% affordable housing, also by Forest City. Environmental remediation will continue through the year with construction is expected to begin in the spring of 2012.

The big news as far as grocery stores in the area has been the potential for a Whole Foods at 800 New Jersey Avenue, S.E., however, the developer William C. Smith + Co. and the grocer are looking for tax abatement to the tune of $8 million over ten years. The groups have apparently been discussing a store for the site since 2002. With a city handing out tax breaks to far less game-changing endeavors - but now strapped for funds - the plan is still given better than even odds.

Among residential options, of Capitol Quarter's EYA development of 113 homes, phase I has sold out, and the 130 homes of Phase II are on the market now, with a move-in date of June 1. Construction had started in 2008, with Phase I construction completed in May of last year.

Other apartments include the off-then-on Foundry Lofts project at 201 Tingey Street S.E. which will offer 10,000 s.f. of retail and 170 market rate units. Forest City was able to resume building in September of 2010 as a result of President Obama's New Issue Bond Program (NIBP) that allowed for the D.C. Housing and Finance Agency (DCHFA) to fund the project and kick it forward. Leasing will begin this summer, with move-in likely in October.

In a holding pattern are several other projects awaiting financing. They include Factory 202, the SK&I-designed building that had been home to Federal Protective Services which was to have become a condo building. Forest City is still entertaining other plans for the site, but as of now it is considered a building for a later phase of development.

Though Monument Realty's 55 M Street is filling up, there is no start date for the hotel or residential buildings at Half Street since funding has not been secured since Lehman Brothers' exit. The grand plans for this property tanked with the fall of the economy, leaving a crater sized hole in 2008.

Akridge's Half Street mixed use office, residential and retail tower is also on hold, as developers are in the process of securing an office tenant. "We've just picked things up again in regard to design," said Kathy McDaniel, Project Administrator for Akridge. "Three months from now, we will have more progress to report."

Still on the boards is the CSX plan to widen its rail lines that run under Virginia Avenue, which is not marketed as loudly, partly because it will be some time before the location will be affected. A $98 million TIGER grant will raise the clearance in 38 locations in three states; 23 more need to be funded and amended before the bigger clearance allows for taller trains. The Virginia Avenue tunnel is among the largest and the most expensive pieces of the project.

Washington, D.C. real estate development news

Industry Insight: Michael Stevens on the Capitol Riverfront

Two years ago, it occurred to Michael Stevens that the Southeast Riverfront could use a Business Improvement District of its own, rather than being lumped together with that of Capitol Hill. A consultant at the time, Stevens approached property owners, already considering joining the Capitol Hill BID, in what is now the Capitol Riverfront Business Improvement District and told them that the area surrounding the incoming Nationals Park had unique development needs.

With the stadium, Department of Transportation, and residential projects popping up around his 1100 New Jersey Avenue office, Stevens, the Capitol Riverfront BID Executive Director, agreed to sit down with DCMud to talk about what's new in Southeast. Stevens discussed how to bring development to a portion of DC formerly associated with housing projects and strip clubs, a river two tires and a soda can past picturesque, and why the Green Line is the new Red Line.

So what, exactly, do BIDs do?

It’s hard to say. They are management organizations that address issues of cleanliness, safety and cleanliness, development, advocacy, community building, infrastructure and transit access. Property owners vote taxes on themselves to get these extra services.

You seem to be in a unique position, as you had a hand in developing the BID. How did you get involved?

I was a consultant and I approached the property owners; they had been approached by the Capitol Hill BID, but the context of the mature Capitol Hill neighborhood was totally different. That is a mature townhouse neighborhood with commercial corridors. This is a twelve-story, high-density, mix of uses that’s going to have access to transportation, infrastructure, parking, and the new ballpark. I approached the property owners and said, “You need a BID here to deal with your very specific issues. You can’t bring the Clean and Safe from Capitol Hill and say, ‘here you’ve done it.’” I told them that this is literally going to be a twelve-story neighborhood versus the two and three stories of Capitol Hill. The freeway is also a very clear divider both physically and perceptively.

They agreed to that idea and hired me as a consultant over two years ago this month to start pulling together the nuts and bolts of a BID, to meet with property owners to understand the issues and the development dynamic, and that’s when we started understanding how special this place could be. You have a development dynamic that will lead to the creation of a new mixed-use downtown essentially, that many mid-sized cities in America would kill for.

I worked in Memphis for four years, they have 6.5 million s.f. of office space, we will have 15 million, San Antonio is the seventh largest city in America, they have 5.5 million s.f. of office space. We’ll have 9,000 housing units, 800,000-900,000 s.f. of retail space, and 1,200 hotel rooms with four new parks and the Riverwalk Trail. So on 500 acres in this city, we’ll build almost ten percent of the existing office market. I had to start making points of comparison to understand how much stuff will be happening down here and how close it is.

That 15 million s.f. of office space means 95,000 daytime employees. 9,000 housing units means 15-16,000 residents. 900,000 s.f. of retail space is like a mid-sized regional mall, but it will be diffused through the neighborhood and in two mixed-use projects rather than in one building. The 1,200 hotel rooms are in six, 200-room hotels. We have the Marriott of 200 rooms which is already exceeding all of their sales expectations. In our efforts, we try to brand this as an office and business center, as an urban neighborhood, as a retail hotspot, as a tourism destination, and then as a great waterfront and parks environment. This will be a regional destination that embraces the river. We call it our front porch, rather than our back door so we have opportunity to engage and embrace and use river like it’s never been done before.

What is your view for the BID five years from now?

I think you’ll see a lot of the amenities that people are looking for start rolling off. Two parks will have opened, maybe a third, which starts to provide that open spaces system that builds community. You will see a number of restaurants which office tenants want, but that also serve residents. You will also see retail from the Forest City Project. You will see a lot of buildings that are coming out of the ground now, finish and start leasing up, which will add another layer of activity, and then people will start to understand that this is a new neighborhood emerging on the river that it’s not this far away place. In five years you will see a grocery store if not two, and very nice ones on the market, not Safeway or Giant – Whole Foods and Harris Teeter are looking at the area.

You seem to have a lot of green space and green buildings, has that become a branding thing for Southeast?

Oh yes, we have the largest green roof building system on the East Coast in the DOT building. The ballpark is the first LEED certified stadium in the country, we have special standards for tree wells, and they will catch storm water runoff and naturally filter it before going into the Anacostia River. Then Canal Park will be a model of environmental sustainability, it will catch storm water runoff from surrounding blocks, capture, filter, recycle, and reuse the water on sight. We are hoping to capture it on the rooftops of other buildings as well. A lot of that was planned before ballpark. I think the city should be very proud because they were very prescient about area. This is ten years of economic development positioning.

It started in 1998 when NAVSEA (Naval Sea Systems Command) consolidated all the regional operations to the Navy Yard campus and brought 14,000 employees and improvement to the Navy Yard, and that spurred five new buildings in the area to house contractors who worked as part of the BRAC (Base Realignment and Closure) process. The federal government should be proud. Then you have Mayor Williams who was a visionary guy, then you have the federal government which said, “we want the DOT down here,” and that sent a certain signal and then GSA worked with Norton in the SE federal center and Forest City was awarded development rights to the area, so that was a huge perceptual change. People said, “if Forest City wants to be down here…” Then the Hope VI grant at the Capper Carrollsburg, then the ball park – we even say the ballpark, while catalytic, is just gasoline on the fire. The other major factor in all this, is downtown will be built in four years – Mount Vernon Triangle, NoMa, and us are in competition with each other to capture that growth.

Where Golden Triangle and NoMa have a lot of commercial tenants coming in, it seems that there are a lot of residential projects coming here, how does that affect the BID?

I want to clear that up. We’ve had a lot of tenants come here. We have the 2 million s.f. Department of Transportation with 6,000 employees. That is bigger than ATF. There are 14,000 employees in the Navy Yard campus and 12,000 contractors associated with the navy yard campus. Plus we have the William C. Smith Headquarters, Parsons Engineering is coming… So we have around 27,000 employees, I don’t think there are that many in NoMa. So we’ve done pretty well from an office tenant standpoint, and were much farther along in the development cycle for residential. It’s the proximity to the river, to Capitol Hill, to the ball park, and what’s in the pipeline here for new parks that will support a lot of community development. We definitely consider ourselves a mixed-use neighborhood. And Golden Triangle, downtown, Capitol Hill are mature districts compared to NoMa, Mount Vernon Triangle, and us. The younger BIDS confront similar challenges.

What kind of input do the current residents and all those future residents and companies have in the BID and what is their role?

There aren’t a lot of residents yet, there are about 1,000 in the BID’s area, with 2,000 units under construction. Some will roll off this summer. Over the period of a year, we met with the Capitol Hill Co-op, the DCHA that’s building on the old Capper Carrollsburg site, and we met with all property owners individually and collectively. We have quarterly meetings with owners to say, “Here are the issues, lets prioritize, and go over the BID tax leading up to filing.” We have had enormous public input and since then, we have created a Board of Directors of twenty-one voting members, of property owners, and five at-large non tax-paying community stake holders. We have an extensive committee structure that supports the actions of that board.

You mentioned the Capper Carrollsburg project. What are your expectations for that?

It will be an instant neighborhood over the next five years. It was such a transformation of this area when they tore down the really bad public housing. It was a perceptual and physical change that was instantaneous, our crime rates went way down, the bad housing was eliminated, and people started to see what could happen with rebuilding. We will double the number of housing units to 1,550. What’s also good is that it introduces, instead of just having a consolidation of affordable or low income families in one complex, this will be a blended income strategy that introduces different economic levels, home ownership versus leasing, and the 350 townhouses will be fantastic. We are creating higher density units.

Do you think there will be a time when, after a baseball game, you will say, “Hey kids, want to go hang out by the Anacostia waterfront”?

Absolutely – next season, next spring. The bike trail has come to the 11th Street Bridge. We will bring it under the bridge to tie it into the already built Navy Yard section. Next year the Riverfront Park will be done. In fall 2009, Yards Park opens, and that will be five acres, then Diamond Teague Park will open that spring.

How do you think that infrastructure will continue to evolve? It seems that now the Capital Waterfront area is a place to which you take the metro to the ballpark for a few hours and then leave, but that kind of transit puts a strain on infrastructure in terms of driving and the Metro.

I’d say sixty-five percent of ballpark patrons are Metro-riders. I think it has worked fairly well, I know that people have said they have waited for two and three trains, but I think Metro is learning and that they add more cars and increase frequency. The parking lots have only been half and a quarter full – that’s fantastic!

How do the BIDs work together, what is the communication between them?

We have a BID council that meets every six weeks, there are eight bids, we are newest. We’ve been up and running for almost a year. NoMa preceded us by about 3 months and Liz (Price) has done a great job. We all collaborate because we have issues of commonality, infrastructure, and transit accessibility. We think there might be maybe one central employment pool for all of the BID Clean and Safe teams, that we will purchase goods together, but for now, we advocate together, do strategic planning together, and look at how we can do things better. We share what we are doing. It’s very good company.

How does the budget work?

Our budget is about $1.4 million and it’s all through BID tax, although we do accept contributions or sponsorships. We have a several-layer BID tax. There is a formula all the way down, first we tax unimproved land, or buildings under 15,000 s.f. It’s twelve cents per $100 dollars of value, ... Then we realized that there were land uses that didn’t put as much demand on service – public storage, industrial uses, so that is also taxed differently.

Can you explain the Clean and Safe idea you have been mentioning?

BIDs were started forty years ago when downtowns across America were experiencing declines and were dirty and dangerous and experiencing an exodus of retail and office to the suburbs. BIDs were created as management organizations to provide additional services to what municipalities were willing to do in the financially strained time. Property owners essentially voted taxes upon themselves, beyond what the city does. They taxed to get a pool of money to improve geographic area.

One of the first things to come out of that was Clean and Safe teams. They are men and women in uniform with pans and broom, power washers, and street sweeps who work to make the areas as clean as possible. It is streetscape improvement. The safe part consists of Hospitality Safety Ambassadors, men and women in uniform on patrol at street corners, by Metro stations, handing out information, and answering questions, so visitors have someone to talk to. They can also intercede in aggressive panhandling and notify the appropriate service.

We’ll expand to weekend service, now they work from about 7:30 am to 4:30 in the afternoon. We want the most impactful services on employment days. As we add more residential units, we will add weekend services. One-third of our budget goes to the clean and safe teams.

You’ve had a big year with the Nationals Park opening, how has it been working with the Lerners and the sports industry?

The ballpark has run very smoothly, each game is an opportunity for 20,000 -40,000 fans to come and see a new neighborhood being built on the river, the Lerners have been good partners with us. They are on our board of directors, the Sports Commission is on board as an at-large member (not voting). They run a thirty second video on our BID before every home game. That clip really starts to position in peoples’ minds that this is the Capitol Riverfront and that it’s a new neighborhood being built around the new ball park. People are astounded when they come down here – its fifty years of overlooking an area of the city that has now caught fire and is, we think, farther along in its development cycle than Penn Quarter was when the MCI Arena opened. We think the ballpark will have a similar catalytic effect.

With all of these deliveries approaching and all of the development going on, what has been your greatest accomplishment?

I would say getting a BID started with a board of directors and staff and the Clean and Safe Team, also, one of the first big accomplishments as a BID was getting a special assessment district created in concert with the Deputy Mayor. We realized that this development could not be supported by the current infrastructure and so we had to rebuild it all in concert with the DOT five-street reconstruction.

How would you change the overall development process of DC?

I think I’d streamline the development review process to make it more predictable and less time consuming. I don’t think its predictable, I think it takes much longer than developers anticipate, so they incur enormous interim financing costs. What would take three years in another city could take nine here. The city also needs to fix infrastructure – across the board in the United States, we are facing massive infrastructure issues – we have realized how woefully underfunded our infrastructure is in cities across the country. We need to improve mass transit, water, and sewer. Those are the huge pieces. Here we are trying to create mass transit options beyond what we have. We are thinking about streetcars and light rails, we were predicted to have street car across the 11th Street Bridge that would tie into M Street and connect Southeast and Southwest and then head up 7th Street to downtown.

Is there a timeline or is it just an idea?

I think it is conceptual because there isn’t funding for it yet. All of this is driven by funding. We could see the light rail, best case scenario, in five to seven years, worst case, ten to fifteen years. Its more than just funding though, its engineering, acquisitions, relocating utilities, then building.

What is the timeline on Florida Rock?

It was just in the paper last week that they their PUD has been approved and they are waiting on architectural approvals, but now they are talking about whether they want to build or just sell the land.







How does their decision and development affect the BID?

If they build, the quicker they do, the quicker revenue goes up for us, it is a key piece of waterfront linkage but also the front yard to the ballpark. A lot of people don’t like it, it doesn’t bother me, it’s the industrial heritage of the area.

How are some of the other developments in the area coming along like Half Street and JPI’s three buildings?

For Half Street, Monument and Akridge are going to negotiate before court, so someone will be made whole and we hope that happens over the summer. JPI’s 70 I Street opens this month, 100 I Street will open in July, 909 New Jersey will open in summer 2009. Those are said to be the fastest selling projects in DC. Then, Velocity Condos open in spring 2009, Faison’s 265 units open this summer as well, in August. 100 M, which is adjacent to Faison, will finish in September, Parsons Engineering in January, and 1015 Half Street is their second building and I hope the Department of Agriculture will choose that as their new site.

William C. Smith has two tracts here and we pitched to NPR to come too, but they chose NoMa because it’s on the Red Line. We said, “you have 175,000 cars on a daily basis, unimpeded views of the Capitol, and you’re in the Riverfront district!” There is such urban walkability here.

How many people do you have on staff?

In terms of staff, there are three of us with a fourth coming later this month. We are fairly small, but growing.

How do you guys go about getting your message out?

We’ve had numerous articles in the press over the past year: NY Times, Washington Times, Washington Post, On Site Magazine for The Washington Business Journal, Landscape Architecture Magazine, Luxury Condo, DC Modern Luxury, Washingtonian.

We like to say, “NoMa’s had a good month of publicity; we’ve had ten years of publicity.” We use our website; we’ve done forty to fifty presentations on the BID to the public. You’re going to have ups and downs of media coverage. Our property’s owners aren’t as aggressive in shouting that they have a Harris Teeter coming as other places. It’s about tours to the brokerage, public presentations, media coverage, website, publications, and community events. We were part of a boat tour with 430 Brokers, we went by riverfront sites and each of us got a chance to talk about our sites. We are on the Real Tour on the 19th.