Montgomery County and RST Development Open Galaxy Apartments In Silver Spring

While Silver Spring has seen a renaissance when it comes to the improvement of the downtown, with splashy new condos and best-in-brand retail, it was never going to become another Bethesda, given the eastern-side of Montgomery County's distinctly working class roots.

Still, for the most part, the redevelop- ment that has consumed much of downtown Silver Spring over the past decade meant flashy condos and apartments for 20-something and 30-somethings who walked to work, iPod in hand, to the Discovery Channel or NOAA, or took the Metro to jobs in the District. Those condos were often paired next to legacy apartment complexes for more working-class families with far fewer amenities.

Now a new apartment complex is trying to bridge that divide. This week the Galaxy Apartments at 8025 13th Street in Silver Spring opened, offering 195 units. The mid-rise, five-story building (though note the 6-story rendering) designed by A.R. Meyers & Associates and built by Clark Realty Builders has all the amenities expected by the downtown hipster class, like a swanky Vegas-style lounge created by Hartman Design Group with a bar and leather-wrapped pool table, along with state-of-the art fitness center with floor-to-ceiling windows more befitting a Hollywood spa.

The difference this time is that there will be 82 affordable units. For singles with incomes between $33,000 and $45,000 a year, a 628 s.f. one bedroom apartment with a den will go for $1,120. That compares with the market rate of $1,770 for a similarly fitted apartment in the same building.

There are similar income restrictions for larger units, up to five residents with a maximum combined income of $69,660. The affordable units have already sold out, said Karen Widmeyer, a spokeswoman on behalf of Hercules Real Estate, the management firm for the apartments.

The site was a previously a surface parking lot owned by the Montgomery County Parking Lot District, and has been in the planning stages since 2005, going through several iterations - initially with 328 units and 700 parking spaces, shrinking in size while adding significantly to its subsidized housing component. The public parking, as well as the county-owned garage, have been integrated into the unit, now with 368 spaces.

Developers are seeking to distinguish the latest affordable housing offering from the many other high-rise apartments within walking distance of the Silver Spring Metro, pointing out the Galaxy's condo-like finishes, including granite countertops, custom cabinetry, ceramic flooring, stainless steel appliances and full-size washers and dryers. "All the units have the same amenities," said Eric Burka of Streetsense, the Bethesda-based design firm which markets the Galaxy. "It's the same if its market-rate or affordable."

The Galaxy was a partnership between Montgomery County and the developer, RST Development. The financing included a tax-exempt bond mortgage of $38.5 million, provided from the Montgomery County Housing Opportunities Commission, along with a $5 million loan from the County's Department of Housing and Community Affairs.

The Galaxy will soon be joined by another mid-rise rental unit, Priderock Capital Partners' $30 million Heritage development on Georgia Avenue (rendering above) which will offer 210 rental units on 1.8 acres starting in December, currently under construction by KBR's Building Group. The Preston Partnership is the architect of record.

The Orion Condominiums are also are being constructed next to the Galaxy on 13th Street, and the 46-unit building will begin delivery this summer.

Maryland real estate development news

Ellsworth Slated For April Groundbreaking in Silver Spring

The Ellsworth Apartments in Silver Spring is set to break ground in late April or early May, said Karl Alt, Development Project Manager of The Foulger-Pratt Companies. The apartment building, positioned two blocks from the Silver Spring Metro, will offer residents a courtyard, fitness center and pool. It was originally billed as a luxury condo development. The 217,655 s.f. building will be built to LEED-Silver certification levels and will offer 222 market-rate apartments and 19 low income units. Alt said the project will take over the entire block from Ellsworth Drive to Cedar Street to Pershing Drive and Veterans Drive. SK & I Architectural Group, the firm behind View 14, Union Row Flats and Arlington's Lofts 590, is steering the project's design. Foulger-Pratt is responsible for both development and construction of the project. 

Foulger-Pratt Development Executive Briggs Bunker said the apartment exterior closely resembles the drawing above, despite that the project has been retraded as rental apartments. Of course it's still being dubbed as luxury residences. "The materials used in each unit are what make it a luxury rental," said Bunker. "Marble counter tops in each unit, for example." The common spaces are also what the developers consider a notch above: "Not many rental buildings have a common courtyard, a pool, a fountain, two areas for outdoor barbecues, and an outdoor fireplace." The building will also feature a fitness center, a game room and cybercafe. The Ellsworth is one of the few projects in Silver Spring to move forward without substantial subsidies for affordable housing, which Montgomery County Executive Isiah Leggett has made clear is a staple of real estate development.

Projects like The Argent, an affordable housing project developed by Perseus Realty at 1200 Blair Mill Road that opened last year, have been able to move forward with local and federal grants for below-market housing, while Galaxy will rise at 8025 13th Street, with 113 market-rate apartments and 82 subsidized units designed by A.R. Meyers & Associates. So while the proliferation of development in the suburb just north of the city may offer some sunny optimism regarding the housing economy, the roll out remains slow, with projects often scaled down and subsidized. Development of the Ellsworth, in that light, is a sign of more faith in the market forces. 

Silver Spring, Maryland retail and real estate development news

Silver Spring's Contracting Galaxy

The Galaxy in Silver Spring is at last underway, at least in name. RST Development began excavation work on the site last month to make way for the apartment building that will soon rise at 8025 13th, just west of Georgia Avenue on the Silver Spring-Washington DC border, but now as a smaller, subsidized version of the original project.

Initially planned and approved by the county as a 328-unit, 700-parking space condominium, the project has spiraled downward in scope over the intervening four years. The ultimately prevailing design is a 195-unit rental apartment building with 113 market rate units and 82 subsidized units reserved for occupants making less than 60% of the Area Median Income (AMI). RST began sales for the Galaxy, then a condominium, in 2006, which ended unsuccessfully in 2007. By early 2008, with the condo market in Silver Spring moribund, A.R. Meyer's & Associates' designs for the approved condo project shrank to a more modest 241-unit complex with 430 underground parking spaces - with some as public spaces - was rebranded as an apartment building. But the shrinkage continued and - any port in a storm - the developers took advantage of public dollars by amping up the affordable housing component, and earlier this year RST submitted an application for $40m in tax exempt bonds, nearly $3m in Low Income Housing Tax Credits (LIHTC), and an additional $5m from the county's Housing Initiative Fund.

 

The Galaxy is RST's third project on the site, but the first new construction. In 2004, RST converted the vacant, 15-story office building around the corner into Gramax Towers, a-182 unit apartment complex also heavily subsidized by the state with 153 subsidized units. A year later RST began the renovation of the Williams and Willste buildings, two abandoned office buildings next to the Galaxy site, which it converted into the Aurora Condominiums. Developer Scott Copeland of RST declined to talk to DCMud for this story.

Silver Spring Maryland real estate development news

The Ever-Shrinking Galaxy

A long time ago (2005), in The Galaxy far, far away (Silver Spring), Scott Copeland, owner of RST Development, began pushing the idea for a 328-unit, 700-parking space condominium development through the Montgomery County application process.

The Galaxy isn't the first project undertaken by RST Development in the Silver Spring neighborhood bounded by Eastern Avenue, 13th and King Streets. In 2004, RST converted the vacant, 15 story office building at 8060 13th St into Gramax Towers, a 182 unit apartment complex. Copeland's company began planning the renovation of the Williams and Willste buildings—two abandoned office buildings on the north side of Eastern Avenue, into the Aurora Condominiums that same year.

In 2005, in the wake of these successful projects, The Galaxy of downtown Silver Spring was born. But by early 2008, the condo market in Silver Springs was not what it used to be and the A.R. Meyer's & Associates - designed condo project shrunk in to a more modest, 241-unit complex with 430 underground parking spaces.

Fast forward to the not-so-distant future date of December 3rd, 2009 and the Montgomery County Planning board is expected to approve two new amendments to The Galaxy development plan - the first splits the project into two phases and the second reduces the number of parking spaces.

The good news, according to Montgomery County Senior Planner, Sandra Pereira, is that "there will still be 3,366 s.f. of ground floor retail." She adds that Phase 1 of the project will not only include "a five story building, but also recreation and public use space" which adds up to 25,816 square feet of space for the public.

A public parking component has been at the center of The Galaxy plans from its beginning. But RST's newest amendment will once again reduce the amount of available parking spaces - this time from 430 spaces to 368. Pereira assures us that this change is quite minor when compared to past amendments and that public parking will still be a component of the development but will now be "divided so that 160 spaces are public and 208 are private."

Despite the assurances, it's noteworthy that the only feature of the Galaxy project to experience a growth spurt in the recent months is the percentage of available moderately priced dwellings units (MPDUs).

In an effort to strengthen an application for 9% tax credits, RST Development went before the Montgomery Housing Opportunities Commission (MHOC) in September for approval to transfer 27 project-based vouchers from the Gramax Towers to The Galaxy. Susan Yancy from the MHOC confirms that "101 Galaxy units" available in Phase 1 of the development "will be offered at an affordable, 30% AMI rate," meaning that roughly 42% of Galaxy's 241 rental units will be available as MPDUs. That's quite a jump, considering RST's original 2005 plan only met the minimum MPDU requirement of 12.5%. And what was once being billed as a swanky new condo development is now going all rental.

Whether or not construction will ever begin on the four story, 46-unit second phase of development remains to be seen. No date for Phase 2's construction has been set. That said, RST Development is pushing forward into the subcontracting stage of Phase 1 despite the setbacks in the market so far. 

Silver Spring commercial real estate news

Portico Nears Full Occupancy in Silver Spring

Patriot Realty’s Portico project in downtown Silver Spring – since rebranded as the Portico at Silver Spring Metro – appears to be doing solid business in a housing market gone kaput. The AR Meyers and Associates-designed building at 1203 Fiddler Lane usurped what had been a long vacant parcel whose only claim to fame was being straddled by Cuban and Scottish (MacDonald’s) restaurants. Now, since opening its doors to the public on November 15^th of last year, the 12-story building once planned as a condo is succeeding in its conversion to rental units.

According to the Portico leasing office, 82% of the building’s 151-units are now occupied. Of course, that could be chalked up to the fact that they’re offering two months free rent to tenants (how’s that for an amenity), but could also have to do with timing. In the two years since Patriot broke ground on the Portico, other Silver Spring projects once pursuing similar timelines – 1050 Ripley, Midtown Silver Spring and the Transit Center Towers, to name a few – have seen their timelines extended ad infinitum as developers struggle to secure financing.

That’s left a big hole in Silver Spring urbanista-friendly housing market that Patriot has seemingly filled with flourishes like in-house billiard and yoga rooms, a wireless internet lounge and a mini-theater that screens movies and sporting events. Plus it’s a block from the Metro – an advertising point so strong that the developer renamed the project after it.

Rents in the Portico are currently starting at $1550. Patriot Realty did not respond to DCmud’s inquiries concerning the project.

Silver Spring commercial real estate news

Portico Condo Springs to Life

With excavation mostly complete, construction is getting ready to begin on the Portico, a new condominium in the center of Silver Spring. The 151-unit building had long been planned for the vacant lot on Fidler Lane, between Cubano's restaurant and McDonald's, but was halted when neighbors in an adjacent new development complained (typical) about the density and parking. The Patriot Group purchased in the land in 2003, anticipating starting prices to be around $200k, but the controversy slowed the project and the developer eventually agreed to sell the pre-construction plans to Centex. Centex in turn pulled the plug on most of its urban projects, including the Portico, as well as Scene (Arlington), 1200 East-West Highway (Silver Spring), Pavilions at Huntington Metro (Alexandria), and Pavilions at Takoma Metro (DC).

The project has been approved by the county and excavation is now underway, the Patriot Group anticipates completion in late 2009. Located just a short walk to the Metro in Silver Spring's central business district, the new condo is being designed by Silver Spring-based AR Meyers & Associates as entirely residential, no retail, which the developer states is prohibited by zoning code.

Silver Spring commercial real estate news