Thursday, March 31, 2011

Ft. Totten: Hanging Tough, or Just Hanging?

Art place at Ft. TottenBeing on top of a Metro station means that real estate development and rising property values are a given; or so goes the axiom. More so if that Metro line is vermilion and close to downtown. Ft. Totten is proving the exception, with neighborhood-transforming projects sidelined, and now a distressed apartment sale shows why developers have held off.
Clark Realty Capital
Despite Ft. Totten's 3 Metro lines (Green, Yellow, Red), its bike trail, its local parks, its juxtaposition at several major traffic arteries and ample developable land, developers have balked at building out what seems on paper to be a model of transit-oriented, mixed-use development.

Clark Realty Capital, the only developer to have built on the site, demonstrated the hazards of pioneering, having recently lost its 5.6 acre property in a distress sale to Greystar, which paid $55m for Fort Totten Station (Greystar also snapped up 909, Axiom, Jefferson at Capitol Yards, all near the ballpark, and Jefferson at Thomas Circle.) Clark had completed the project in late 2007 after obtaining a $47m financing loan in 2006 plus a ground lease from the Washington Metropolitan Area Transit Authority, but had gotten several foreclosure notices late last year. At the time, Clark called the project "the anchor for a comprehensive revitalization plan for the Fort Totten Metro site...the first of several developments planned for the Fort Totten neighborhood," but hedged its bets with little retail space and low budget architecture.

map of Ft. Totten DCClark's vision might still come true, but not soon. The few single family homes in the area sell (after a while) for around $200,000, and commerce is all but forgotten. The Morris and Gwendolyn Cafritz Foundation and Lowe Enterprises, the two biggest private landowners in the area, have both iced plans for development. Representatives of Cafritz refused to speak about their project, and a representative of Lowe would say only that the project has been "put to the back burner." An Urban Land Institute (ULI) study in 2009 (sponsored by WMATA) noted that the project is "a mere 3.5 miles from the U.S. Capitol" but that "the Fort Totten market will support calls for smaller, more affordable units, and basically allow only for wood-frame construction."

If anyone sees opportunity in Fort Totten, it is WMATA. The publicly chartered organization still owns 9.3 acres around the Metro station (on top of the 5.6 it leased to Clark), and can't afford the pessimism of a private developer. The transit agency has been pushing for the past several years for Ft. Totten to be a different kind of example, one that showcases revised concepts of transportation planning, and has been working to corral developers to integrate plans, so that the individual pieces are built in some semblance of an Art Place, ft. Totten, Cafritz Foundation, Washington DCorganized whole.

Foremost among those pieces are Cafritz's Art Place and Shops at Fort Totten, 2 million s.f. with a mixture of community-serving retail, residential (over 1200 units) and arts and cultural space to house arts promoters like The Washington National Opera. Cafritz expected to begin construction in the first half of 2010.

The Lowe team (with partners Jack Sophie Development and City Partners Development, and now JBG too) was to include 898 residential units on 9 acres of land (see rendering below right), and was to have preceded Cafritz. Together the projects would have added more than 200,000 s.f. of retail space. Washington DC commercial property listingsBut if its clear that projects need to be coordinated, its also clear that the area cannot yet support that much development, at least to its financiers.

Laura Cole, an executive with RCLCO and formerly head of ULI when it issued its Fort Totten study, says that there's a gap between what a financier would typically support and what might work for the area. Cole notes that a financial institution will require traditional parking-to-apartment ratios, a model that is simply too expensive for a neighborhood like Fort Totten, and sites the DC USA site as a model of overbuilt parking requirements.

WMATA is attempting to change that philosophy, and followed up with another study in 2010 with urban development planner Parsons Brinckerhoff. Nat Bottigheimer, Assistant General Manager for Planning at WMATA, seconds Cole's assessment of the financial inviability of traditional notions of housing development, but is also keen to change the way planners see parking in general. Bottigheimer's vision for the undeveloped site is a communal approach to parking, where evening uses (for residents) piggyback on daytime uses (office and retail). "We should experiment with a kind of residential building that doesn't reserve spaces for cars, the building might provide 50 or 75 shared spaces instead of 150 dedicated parking spaces...[y]ou don't want to be just doing standard models, you also want to push the envelope as a public agency to promote the achievement of these public goals that we're in business to support." Hence the ULI report.

"We don't want to find out that we've built adequate parking, and others have developed theirs, and together we all contribute more than the necessary amount of parking...but that requires alot of coordination with other property owners to come up with an overall development plan." Bottigheimer pleads the case for a concept he admits is an "untested product in this market," but points out that "it costs $40,000 per space to build...more than a vehicle. Most of these are just car storage spaces, there's got to be an efficiency to provide a better system than we have now."

While WMATA has no specific plans for its own property, and can't force other developers to abide, it still has an influential voice at the District's Office of Planning. "We will collaborate with the District to get the kind of development that makes sense for the area" says Bottigheimer...we need to do more research with the development community to see how this could work." Admirable as that may be, it still requires developers to invest in an area that now is 0 for 1. At least WMATA seems intent to keep trying. Says Bottigheimer, "all options are open."

Washington D.C. retail and commercial real estate news


Critically Urban on Mar 31, 2011, 9:50:00 AM said...

The failure of the Clark Realty project is its shear pitifulness. The architecture is reminiscent of, say, Manassas or Germantown, the retail is anemic (7-Eleven, anyone), and I'm sure the interior quality is lacking. With a high-quality housing and apartment stock nearby, why, on Earth, would anyone want to lease or purchase in this insultingly low-class development?

Anonymous said...

Well, it's a lot cheaper than any other apartments close to the metro. Not everyone can/wants to afford an overpriced apartment in Columbia Heights, U Street, etc. It's very close to the metro. Yes, although there is nothing else there (aside from a terrible 7-Eleven), it's close to everything. And maybe Cafritz, JBG, and WMATA finally get their act together and work together to get something done up there.

Committed to Ft. Totten said...

As a homeowner in the community this makes me sad. I had so hoped we would get some retail and other growth in the area. Even after reading this it's not clear to me why the builders think it's not possible or that the area can't sustain it? That makes no sense to me. "traditional parking-to-apartment ratios?" Isn't the point of building near a Metro to reduce or eliminate the need for cars and encourage public transportation?

I think the whole thing is shortsighted considering the housing stock while older is still affordable compared to some other parts of the city.


jag2923 on Mar 31, 2011, 11:43:00 AM said...

I wish Ft. Totten the best, but I can't imagine the area changing very much until people get priced out of downtown Silver Spring, which won't be happening especially soon since 1000+ units are currently under construction there which will keep prices stable for a couple more years.

Anonymous said...

Correction. Greystar doesn't own the ballpark deals. JPI is still the owner. Greystar does manage those projects however.

IMGoph on Mar 31, 2011, 1:41:00 PM said...

the vacant apartment buildings just to the east of the station that have the fences up around them - they're due to be torn down, correct?

if so, it would be a damn shame. the visible contrast between them and the new construction to their west is stunning. the difference in quality is clearly visible.

the ones that are fenced in look like they could last forever. the new stuff looks like it'll fall down in 10 years.

Anonymous said...

The blame for the debacle in Ft. Totten can be put squarely on Clark Realty. As the first developer in, they set a tone for poor quality design and construction that can't be shaken until someone else makes a significant investment of higher quality. Unfortunately, the die is cast and it will be difficult to justify such an investment as long as the Clark junk is the dominant product there. The quintessential Catch-22 and the Ft. Totten community is left to pay the price.

Anonymous said...

I find this strange. Catholic U / Abdo is doing major development one metro stop and 1.5 miles away from Fort Totten. Fort Totten is on Red & Green lines, convenient to Downtown, Downtown SS, U Street, Nats Park via Metro. It is a quick drive to upper NW (Missouri to Military) this makes no sense to me.

Developers are probably trying to hold out for more city tax breaks. (handouts)

Erin said...

I agree with the author, "low budget architecture" is putting it nicely. I'm sorry it costs more to build good architecture, but figure it out or don't build it.

Sivad said...

What ever happened to if you build it they will come? Values are suppressed because although there is good transit and recreation there is poor retail. As soon as people see the cranes, that's when they start moving in. Humans are impulsive and reactionary. Renovated homes are selling for $300k plus. So $200k is an improper assessment unless you want an original 1940's renovation. DC is proceeding with their portion of the MBT (which pales in comparisson to what Maryland has done). It's so funny to me that one of the best areas in the city is one of the most neglected. Something is not adding up.

Anonymous said...

It's all about demographics. If there are other choices with nicer environs, people will go there first. You cannot just build it and hope they will come - no matter how nice it is. Ft. Totten is years away from being something that attracts people willing to pay high rents that justify new construction - no matter what the architecture.

Anonymous said...

Anonymous 10:17 the people are here and more would come once shovels go in the ground. The condos / apartment would not command the same prices as NW but people would come for the value. People priced out of DuPont Circle migrated to U Street, people priced out of U- Street migrated to Columbia Heights. I live in Fort Totten I see the young(ish) singles walking to Metro. DC / Ward 5 councilman needs to step up and get one anchor store / anchor developer. The neighborhood has been starved for retail for years

Anonymous said...

"the people are here and more would come once shovels go in the ground."

The issue is that no developer is crazy enough to spend what it takes to bring a real building to the area. There's no way they could get the rent necessary. I expect Silver Spring, Brookland, and the GA Ave corridor are all going to have to max out before Ft Totten sees any real changes (10-25 years, if ever).

Anonymous said...

(10-25 years, if ever).
Yikes...I so hope you are wrong. There are only a few parcels of that size and Metro accessible available for development.

"I expect Silver Spring, Brookland, and the GA Ave corridor are all going to have to max out before Ft Totten sees any real changes “

Is Brookland really that distinguishable from Fort Totten? I am calling Ft. Totten a cheaper alternative to the locations you have pointed out. There is quality development @ Hyattsville Metro (Prince Georges Plaza) and on Route 1 (by EYA not close to Metro) but Fort Totten can’t support development? Not buying it.

Stephen Smith on Apr 1, 2011, 6:51:00 PM said...

They should have given the developer more density. Although this is a big project, the truth is that the neighborhood is pretty cheap, and if you want anything nice built there, you're going to have to allocate enough space that it can transform the neighborhood, which, though I've never been there, I gather is quite low-density and rather boring. A million square feet just isn't enough to turn that kind of place a good place to live.

Anonymous said...

"There is quality development @ Hyattsville Metro"

That's, sadly, a good example of why Ft Totten development will be sparse and cheaply done. The condo building on America Blvd has been selling units for something like 5 years now and it's still half vacant. It's astonishing. "Build it and they will come" is about as far from the truth as it gets, especially now that places like Hyattsville are littered with 100 million dollar failures.

Anonymous said...

@ A 1:44 - "condo building on America Blvd has been selling units for something like 5 years" It has not been five years but I get your point (NOTE: I read on another blog Parker Flats, a 92-unit in neard 1st steet Ledroit JUST sold out The Floridian went into bankruptcy - $*it happens) I think any neighborhood has to be properly developed and then the 'product' properly marketed:

"You in DC working for a non-profit, no rich parents? no problem Fort Totten is for you (along with cops, young teachers etc) People are looking for it to be the next U Street, the next Logan, the next H street (so they can cash in) if they let it be what it is it would be fine.

I have to concede that those bearish on Fort Totten are 'right' since the developers are backing out.

JF on Apr 4, 2011, 9:52:00 AM said...

What I find interesting in this article is the failure to mention all the other projects in the community that have moved forward with great success. K. Hovnanian is in the process of finishing phase 2 of a very large town-home development 2 blocks form the metro station, and UDC has finished renovation the former Bertie Backus Middle School at the bottom of the metro on South Dakota and have made it one of their main campus' for CCDC (their nursing and architecture programs will be there) and Yu Ying PCS will be moving in as well. Food and frieds opened their new campus at the intersection of Riggs and SD a few years ago as well.
No one started losing faith in Cloumbia Heights when all the new construction Condos turned to rentals because of a poor economy. It took time for those neighborhoods to adjust as it will the area surrounding Ft. Totten.
One thing the other areas, Ft. Totten is compared to, are lacking is an abundance of undevelopabel green space in the form of parks administered by the National parks Dept. We may not have retail or the flash some other neighborhoods have, but we are a quiet and safe community with alot of upside.

Not Just Hanging said...

As a resident of Lamond-Riggs (which abuts Fort Totten), I find this article somewhat misleading. It is true that the Fort Totten area, despite all its advantages, has been lacking in amenities long-desired by residents. But the specific issues with the Clark project were de-emphasized. Ask a resident about the “low-budget architecture” and you will get more than line or two in an article—you will get a mouthful. The community hated the design of that project, and is far from surprised about its current state.
The article makes note of “the few single family homes in the area.” I’m not sure about how large an area from the metro station was being referred to, but just looking around the Fort Totten/Lamond-Riggs community you will find more than a “few” SFHs,” and not just ones selling for “around $200,000”; homes do sell for more. Maybe the writer meant there were few homes on the market—that’s primarily because residents tend to hold onto their homes. It is a well-established community.
Due to the nature of the Cafritz and Lowes projects, as well as a comprehensive small area plan developed with the Office of Planning, the community was able to work with the developers to ensure that the projects’ design would complement the community, not clash with it, like the Clark project. Yes, the Cafritz and Lowes’ projects have been delayed, but we’ve gotten no indication that the developers are no longer committed to their sites. Rather, it’s been the opposite. In the latter case, the addition of JBG as a new partner is a positive sign.
Further, in noting that developers have “held off,” the article fails to mention the new townhome development near the metro station. There’s also a townhome/single family home development that is beginning less than a mile from Fort Totten, on New Hampshire Ave. There is a major intersection restructuring project currently underway near the metro that once finished, will provide for a pedestrian-friendly streetscape that will be attractive to residents and potential businesses.
In closing, as WMATA works with the District on the kind of development that makes sense for the area, I hope that has its own copy of the small area plan, and actively includes the residents in its “research” and collaboration.

Unknown on Apr 5, 2011, 10:46:00 AM said...

you mention all of these other places but NONE of them have THREE lines... something is not adding up. with the price of gas and people moving into the city... you're telling me that this is NOT a place to invest in?

Unknown on Apr 5, 2011, 10:48:00 AM said...

something is not adding up. all of the places you have mentioned have possibilities but NONE of them have THREE metro lines. with the price of energy and the migration back to the cities, you're telling me you don't see an investment? and btw: that is an ugly cheap building attached to a 7 11.

Not Just Hanging said...

I echo JF's comments. I left a more detailed post yesterday that was not published for some reason that further expounded on this issue. What gives?

Not Just Hanging said...

Just in case my post did not publish due to a technical glitch, let me summarize:
1. The article just skims the surface about the Clark project. Community residents hated its design, Clark residents had complaints, and so we are not surprised at what happened and consider much of its outcome project-specific.
2. The area (Fort Totten/Lamond Riggs) has more than just a “few” SFHs and $200K seems more like the price of some older townhomes in the area — not SFHs. Maybe the writer meant few SFHS are for sale -- and that would be because the residents tend to hold unto their homes because of the quality of the community.
3. Unlike the Clark project, the developers of the Cafritz and Lowes projects both worked with the community and analyzed the small area plan the community developed with the Office of Planning to come up with design concepts more in line with the community. And although there have been delays (as found in several projects due to the economy), it is our understanding in talking with the developers that they are committed to the projects. For example, the recent addition of JBG to the Lowes project is a good sign.
4. As JB noted, the article failed to mention the new townhome community, a SFH/townhome community soon to come near the Metro, on New Hampshire Avenue, and a major street reconstruction that will be attractive to residents and businesses (old and new) alike) .
5. As WMATA collaborates with the District, it is hoped that research also includes analysis of the small area plan, and working with the residents. To be fair, WMATA did hold a “visioning” workshop several years ago — but nothing since, and WMATA/DDOT do have plans for pedestrian and traffic-flow improvements at the metro station.

Anonymous said...

I agree with Just Hanging and JF. The article under represented the community and shows that the author did not do their research. The community has lots of open fields and two recreation centers within walking distance from the Metro. The crime is low in the area and families tend to stay in the neighborhood. This has lead to a strong sense of community and neighbors that actually talk to one another.

The only thing that the area lacks is good retail and great dining choices. I would love to walk to a resturant with my wife and kids versus driving to Silver spring or Capitol Hill. This is the sentiment of many of my neighbors as well.

Ken on Apr 6, 2011, 6:30:00 AM said...


Sorry, blogger incorrectly labeled your post spam and it was sidelined. We get lots of spam posting and have to keep the guards up. I pushed the original post live, sorry for the inconvenience.

Steven Sorrell on May 4, 2011, 1:59:00 PM said...

I think there may be a couple of inaccuracies. First of all, the Khovnanian Townhome development Emerson park is all done and only has two units remainin, which are right next to the metro and train lines.

Secondly, there are a lot of dominos that have to fall for this to happen correctly. For example, the intersection is currently being renovated, upgrading not only the streets but sewer and utilities. Starting construction on a building that needs to tie into those utilities before those utilities are completely installed is a bit backwards wouldn't you say?

A developer saying a project on hold, does not necessarily mean that they are not still building it, it could mean they are waiting for other items to be completed (such as an intersection).

From the people I have talked to, the apartments failed, because the previous managemenent had very low ratings, and no one wanted to live there because of that. HOwever, there are still plenty of people who do live there.

Also, it is my understanding that a grocery chain such as Safeway would love to get in this area, as it is already a solid market. Since both of the major developments are waiting for a major retail component, this deal may still need to be hashed out. Sometimes, this requires modifications to the original architectural documents and design.

From what I recall, most of these projects were to be completed by 2017 or 2018, unless I'm mistaken, I still see a lot of time left in those timelines. I'm in the architecture and design industry, and right now, there is still plenty left to do before the shovels hit the ground.

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