Rock Spring Centre, Optimistically Pushing Forward

Rock Spring Centre of North Bethesda, a 53.4-acre tract of land within the Garrett Park area, sandwiched between the two legs of I-270, has been partially built, stalled, transferred, and reworked in the decade-plus since the development was conceptualized, and the land rezoned, from high-rise residential real estate to commercial property, back in 1997. Of the remaining 30 acres of land to be developed, Washington D.C. based DRI Development Services says it is moving forward; plans are approved, an architect is on payroll, and retail leases are being pursued, lacking only an equity partner, said Chris Spitz, president of DRI. 

DRI's most recent plans for the site were approved by the Montgomery County Planning Board this past February, but the last step - partnering with an institutional investor or real estate investment trust - is still elusive. DRI will need approximately $375 million to fund the land development, said Spitz, adding that, once complete, it will be akin to "a smaller Reston Town Center." Spitz says that DRI, a wholly owned subsidiary of Transwestern, is looking to start construction in the spring of 2012, with delivery in the first quarter 2014. DRI will lease 210,000 s.f. of retail space and 90,000 s.f. of below-grade entertainment space. Retail is broken up into 53 spaces as follows: 2 anchor tenants, 2 banks, 7 full-service restaurants, 9 quick-service restaurants, and 33 other retailers. To date there are no retail leases signed, says Bill Miller of Transwestern, despite what Miller says is "strong" ongoing interest in the development from potential tenants. "We're very close to having a theater deal [secured]... and we're talking to a few health clubs for the space below grade." Of anchor tenant space, Miller said that a deal "is close" for the largest anchor spot, just shy of 30,000 s.f. The rest of the nine building development will consist of 550,000 s.f. of office, 200,000 s.f. of hotel (200 rooms, operator unknown), and161 residential units, 1.2m s.f. in all. DRI took over development of the site from Penrose in 2008, and is in a long-term lease with land owners Davis Brothers and Camalier LP. DRI has hired Boston-area architects Arrowstreet, which revealed new images of the project last week. 

Architects say the development will be LEED certified, though not which program, and that the project will have "regionally appropriate landscaping." An original three-phase development plan for Rock Spring Centre was approved in 1999. Yet to date, only the first phase, the AvalonBay Apartments, has been built. Since 2004, the site has been dormant, with a second phase - also residential - approved, but never completed. The third, and final, phase has been reworked, from an upscale "urban village" known as Canyon Ranch, scratched in 2006, to the development as it now looks. DRI also has long gestating plans to develop the 1800 block of Wilson Boulevard in Arlington, a full-block office project near the ballpark, and had planned to develop the prominent Gallery Square, the corner parcel at 675 H Street, since been purchased by McCaffery Interests Inc. and Douglas Development. 

Bethesda, Maryland real estate development news

McCaffery and Douglas Pick Up Chinatown Corner Site

The last undeveloped corner in one of the most high-traffic areas of Washington has just been acquired by McCaffery Interests Inc. and Douglas Development, at 675 H Street N.W., encompassing the iconic corner building, long since boarded up, and the vacant lot behind it.

"This is the best intersection in metro D.C." said Juan Cameron, Managing Director of McCaffery, comparing it to Georgetown's Wisconsin Avenue and M Street hub. "It is a central location with a lot of pulse, narrow streets, tons of foot traffic, a heavy daytime population, tremendous residential presence, plus the energy of the Verizon Center. In our eyes, its the closest thing Washington has to Times Square."

Though "everyone has their ideas for how the property will take shape," said Cameron, in these early stages the venture is dubbed as a state of the art, mixed use development. "Step one is looking for a marquee tenant," said Cameron.

General partners for the venture Douglas Development and McCaffery Interests acquired the property yesterday at auction. The property had gone into foreclosure thirty days ago, after Yeni Wong of Riverdale International had been unable to secure financing for the building. This past month was the last of many times the building had fallen into foreclosure; in 2009, Wong was given a notice for this property as well as 801 7th Street for $13,491,471 plus attorney's fees. Wong bought the two properties in 2006 for $10 million dollars.

This isn't the just the first or second try at developing this corner. DRI, a Transwestern Company, had slated 675 H Street as a two-building project: one that would restore the corner space and rise nine stories over the arch, the other a Class A office building behind the main storefronts. The total project would have yielded 110,000 s.f. of office space and 50,000 s.f. of retail. McCaffrey owns Georgetown Centre, leased by Barnes & Noble, and Mazza Gallery, which it bought in 1997. Douglas owns pretty much everything else.

Update: Alex Cooper Auctioneers states that the lot was purchased for $9.1 million.

North Bethesda's Rock Spring Centre is Back in Action, For Now

Last night, the Montgomery County Planning Board gave the go-ahead for the final phase of Rock Spring Centre, a massive mixed-use development that will include nine buildings on the 54 acre tract in North Bethesda. DRI Development will navigate the project that's to house a hotel, retail, office, and residential space in a town center located on in the north east quadrant of the intersection of Rockledge Drive and Rockspring Drive in the Garrett Park area of the city.

This isn't a new project, it's a redo of the last phase of a multi-stage development: the first phase began in 1997, with the creation of 390-residential unit, Avalon Bay; the second phase introduced a 352-unit Rock Spring Centre residential towers - approved but not yet built; and the third phase would have been the creation of Canyon Ranch spa, which was canceled in 2006. DRI has been shepherding the project since 2008, at which time it was shelved as a result of the economic downturn.


Last night's meeting was an amendment to the 2008 plans, which shifted 10,000 s.f. retail to office space and tabled plans for a community center. By the numbers, the 1.3 million s.f. project looks like this:

• 590,000 s.f. office space

• 210,000 s.f. retail

• 90,000 s.f. entertainment use space

• 200,000 s.f. hotel, 200 rooms

• 1250 residences

Sandra Pereira, Montgomery County Lead Reviewer for the project, says that financing and permits will determine when they'll break ground. That may not be for a while.

Bethesda, Maryland Real Estate News

Foreclosure Hits Chinatown Landmark

One of downtown Washington DC's most visible buildings may soon be developed into a 9-story retail-centered mixed-use project; that is, if it's not foreclosed on. Sitting next to DC's Chinatown arch, one of the few exceptions to downtown's shiny newness is 801 7th Street. Yeni Wong and her Gallery Towers LLC were served a notice of foreclosure for the two contiguous lots at 675 H Street and 801 7th Street, NW in October for the $13,491,471 note plus attorney's fees. Wong, President of Riverdale International, reportedly paid more than $10m for the property in 2006. The lots were slated for auction on November 17th, but the sale was canceled, according to the office of David Prensky at DC's Department of Consumer and Regulatory Affairs. The corner of 7th and H housed a CVS, but now sits vacant and boarded with signs promising construction that has yet to begin. Owner Wong started a public dispute by filing a law suit in September 2006 against then tenant, CVS, after the store refused to vacate the premises despite an eviction notice in the spring of 2006. Wong wanted the CVS out to facilitate the LLC's plans to develop the site for a mix of uses including office, residential and retail. According to the website of developer DRI, a Transwestern Company, 675 H Street was to become home to two buildings: one would restore the corner space and rise 9 stories over the arch, the other would be a new Class A office building behind the main storefronts. The total project would have yielded 110,000 s.f. of office space and 50,000 s.f. of retail. The planned development never came to fruition and between October 2008 and February 2009 Gallery Towers had 4 liens placed on their Chinatown property. In the meantime, Eichberg Construction briefly began work last summer after fencing off the site, but work quickly halted. 

Washington DC real estate news

Arlington's Wilson Boulevard Scores, Part II

Call it Revenge of the Nerds Part IX. Science teachers and land developers, in a pointyheaded alliance, are joining forces to take over the cool restaurateurs of Wilson Boulevard in Arlington. The National Science Teachers Association (NSTA) has teamed with developer DRI to expand their Arlington headquarters at 1840 Wilson Boulevard, demolishing two neighboring facilities that currently house the Rhodeside Grill and Il Radicchio restaurants, and replacing them with a new 71,840 square foot office and retail complex.

The site - which fronts North Rhodes Street, Clarendon Boulevard and Wilson Boulevard - also adjoins a Hollywood Video surface parking lot (driving out to get videos, that's so 2007) that will also be re-appropriated for NSTA use. Parking, in fact, seems to be one of the main factors propelling the project forward. The development team plans to tunnel under the NSTA’s current building to install a new three-story parking garage, with another two planned for beneath the new structure. The hope of the Arlington County Planning and Transportation Commissions is that such maneuvers will “recapture shared parking for use by the public” in the rapidly growing Rosslyn - Ballston corridor with its two simultaneous projects next door (1716 Wilson and 2000 Wilson).

The building will top out at 6-stories and include a sixth-floor conference center that will host NSTA conferences and local community events. Meanwhile, a free-standing retail component will measure in at 10,160 square feet that will go towards a local restaurant or retailer like the ones it displaces. By doing away with the two diminutive office structures currently at the site, NSTA and the County hope to “create a better urban edge along Clarendon Boulevard” and, according to DRI, craft “a gateway into the downtown Courthouse.” The project is being designed by Davis Carter Scott and is aiming for LEED silver certification.

The NSTA received County Board approval for the project on November 15 and their current site plan – barring any major changes - will remain valid through November 2011. Progress appears to moving along swiftly, and NSTA has retained both construction and traffic engineers for the project. DPR Construction Company will serve as general contractor. Once completed, the new NSTA headquarters will be within an earshot of Elm Street Development's 2000 Wilson project, as well as George Contis' 1716 Wilson Boulevard development.

Arlington Virginia real estate development news

L is for Lease

More office development has arrived in the corridors of power (aka the Downtown Business Improvement District). DRI Development has brought an 11-story, 170,000 square foot building to 1331 L Street NW, only five blocks from the White House. While the building primarily serves as the new headquarters of the Mortgage Bankers Association (MBA), the SmithGroup-designed, glass-faced project also has 11,000 square feet of retail space on the block for would-be tenants.

The project is energy-efficient all the way - from the LEED gold certification (a rarity for District office space) to the "hybrid vehicle preference" parking spaces. The glass facade ostensibly admits the maximum possible amount of natural light and saves on energy costs. (Although admittedly, five high speed elevators don't sound like too “green” of a luxury). The facility’s amenities include a ground-floor fitness center, a landscaped rear court, a private rooftop terrace and "a crystalline glass tower element" over the building’s primary entrance.

Once the building was completed last spring, it sold to MBA - who now occupy only a third (approximately 68,000 square feet) of their latest acquisition. The rest -both retail and office – are being brokered by Transwestern, the parent company of DRI. A Transwestern retail leasing agent, Alex Walker, says “a restaurant and possibly a café” are planned for the site, but a timeline for such developments is still up in air. With the market still in what is best described as “rough shape,” this could be opportunity to snatch up space in a prime downtown parcel that still has that new development smell. That is, if you don’t mind sharing an office with the same guys who milk you for mortgage payments every month. High speed or not, that could be an awkward elevator ride.

Going for the Gold (and Green) in Southeast

Another addition to the southeast construction boom, 88 K Street may soon add to the dust kicked up around the ballpark. DRI Development's project, also known schizophrenically as "The Plaza on K Street","99 I Street", and "Square 696" is joining the Capitol Riverfront development surge, green features and all. While the developer admits that plans for the mixed-use project are ever changing, the general concept is an 825,000 s.f. office building that will include 37,000 s.f. of ground floor retail space in a LEED-certified building. HOK architects may still be finalizing their renderings, but one thing is for sure, the project, whether it be one, two, three, or even four buildings, will have an approximately 8-10,000 s.f. plaza in front of it and will be designed to achieve LEED Gold Certification for its core and shell construction.

"The project will encompass a whole block, so it's a rare opportunity to include a plaza," said Teanna DiMicco, Marketing Coordinator for DRI.

The still metamorphosing project that will include a green rooftop and the use of recyclable material, will replace an existing parking lot and a building at First and K Streets that is soon-to-be demolished; the future construction site is currently owned by the developer.

“It is such a prime location, it’s close to the Capitol building and we’re trying to make it a distinctive building. It will have a beautiful plaza that will open up a nice pedestrian lifestyle by a lot of residential projects. It will really get a great live-work play environment going. I really do believe that this building will stand out, we have this whole block and it will be the only place with a pedestrian promenade," DiMicco said.

The team is currently in the permit process for the site that is eight blocks from the Capitol, five blocks from the ballpark, and two blocks from the Green Line's Navy Yard Metro Station. Delivery of Phase I, whatever that may include, is planned for the fourth quarter of 2009.

DRI's project is one of many green projects in the Capitol Riverfront area. As BID Executive Director, Michael Stevens noted in his interview with DCMud yesterday, other green projects include Nationals Park, the Department of Transportation, four new parks, and 20 M Street, to name a few.

The developer is a DC-based firm that is a subsidiary of Transwestern Commercial Services. DRI is responsible for other DC-area projects like 1899 Pennsylvania Avenue, NW and The National Institutes of Health in Bethesda.