Silver Spring "Adele" Site Fails to Sell at Auction

The half-acre parcel at 900 Thayer Avenue in Silver Spring, formerly touted as the prospective site of the 96-unit Adele, failed to sell at auction last month.

According to Bill Hudson of Atlantic Auctions, there were several interested parties at the auction, and bids were made, but ultimately American Bank, present owner of the property, put in a token high bid and retained ownership. (Identities of the bidders and the amounts of their respective bids are confidential.)

American Bank is the holder of the property's note, which dates from November 2006, in the original principal amount of $5.15 million. American acquired the property after original developers Fenton Street Development LLC - a partnership between the Freeman Group and Bloom Builders - presumably defaulted. Fenton Street had gained approval in 2008 for an SK&I-designed mixed-use project, christened "the Adele," that featured 15,000 square feet of ground floor retail, 18,200 feet of second-floor office space, and 96 residential units, as well as a green roof and a public plaza. But when the recession hit, the project stalled (probably the most-typed phrase in real estate blogging), and eventually the property changed hands.

The 28,500-square-foot corner lot, located in downtown Silver Spring at the intersection of Thayer Avenue and Fenton Street,

seems like it would still be a viable location for the right project, and was already approved by the county. Zoning (3.0 FAR for mixed-use) and a location in the Fenton Village Overlay Zone (which confers certain building height exceptions) seem conducive to high-rise construction. The most recent listings for the property (which are over a year old) peg it at just over $7 million. Take note, prospective future bidders. (And don't forget to bring your $100,000 deposit to the next auction.)

Silver Spring, MD real estate development news

Georgia Avenue Groundbreaking Delayed Again

Groundbreaking for Guardian Realty's 13-story residential tower at 8711 Georgia Avenue in Silver Spring was delayed yet again because of the developer's indecision in choosing a general contractor, according to multiple (frustrated) sources. The project had been set to break ground at the end of January, but fell victim to Guardian's protracted pursuit of lower bids.

Guardian had no comment when contacted for this story.

Described as far back as 2008 as being on the "fast track," the project has flagged in recent years. Originally conceived as a 13-story Class A office tower, with ground-floor retail space, the project was switched to residential after the down economy made leasing difficult. (Location might also have been a factor - potential tenants who declined to lease at 8711 include corporate titans Northrup Grumman, Siemens, and Hilton, who all took offices elsewhere in the area.)

Developers anticipate a heightened demand for housing in the area after Walter Reed merges with the National Naval Medical Center in Bethesda. The site plan amendment, which left the original building's footprint almost entirely unchanged, was approved by Montgomery County planners in April 2011.

The new plan calls for 160 units in a thirteen story, 143-foot tall building on the 0.87 acre parcel, plus a bit of retail space (halved from 4,500 in the original plan). The WDG-designed building, which will open onto the forthcoming Fenton Street extension, also features a laudably adventurous "public arts plaza" designed by local artist Martha Jackson-Jarvis. The main feature of the plaza is a 75-foot "wave wall," a sort of flowing mosaic sculpture of varied textures that will "undulate like waves." Another, smaller, mosaic wall and a series of three-dimensional sculptures rounds out the space, and a mid-block pedestrian mall will connect the plaza to nearby Georgia Avenue.

At the April 2011 hearing for the site plan amendment, Brian Lang, representative of 8711 Georgia Avenue Parking Lot LLC, described the project as "liven[ing] up" a particularly "dark and dreary" stretch of Georgia Avenue. But before that happens, they'll have to actually build it.

Silver Spring real estate development news

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

Falkland Chase Apartments, Chasing a Plan for Silver Spring

One of Silver Spring's largest and most ambitious real estate projects is ramping up for development next year. Though the urban planning vision is not yet complete, developers of Falkland Chase hope to submit a site plan to Montgomery County early this summer for a project that would greatly expand the densified downtown section of Silver Spring, adding high rises, 1250 apartments, a supermarket and retail to East-West highway one block from the Silver Spring Metro.

Michael Eastwood of Home Properties says the development team has not yet signed an anchor tenant but intends to serve up a final site plan to the county "by June or July." The county approved the preliminary plan last November, and Home has been working on tweaking the design that will develop the North Parcel, turning 182 garden apartments into 1250 new apartments in 4 new buildings along the Metro track and soon to be Purple Line. The new residential towers will rise up to 14 stories along the tracks and 6-8 stories along East-West highway, denser but "more sensitive to the neighboring community."

With financing for the property still not locked down, Home Properties has been seeking a full service grocer to help tether a financing partner, courting Harris Teeter since 2005, but still without an agreement. "We are trying to chase them down" says Eastwood, who notes that his team also has the capability of going it alone in a pinch. "We're a REIT so we could do it on our own and will be building in phases."

The northern boundary faces the Metro tracks and is the "locally preferred alternative" for the Purple Line. The property features a 40 foot right of way that could serve as a light rail pass-through (the site is only one block from the station so there will be no stop incorporated), as well as a bike path right of way. Design of the project is still preliminary, and while Nelson Byrd Woltz has been selected as the landscape architect for the project, actual design has not yet been achieved.
Home Properties acquired the land in 2003 and began planning for a quick turnaround, submitting to the county in 2006. Plans were "cued up and ready to go" says Eastwood, but market fundamentals sabotaged early plans. Locals then began a campaign to declare the property - inaugurated in 1937 by Eleanor Roosevelt when the New Deal was expanding, as now, the size of government and the area's population - as historic, an ultimately successful bid that changed the scope of the plans. With many of the apartments protected, Home Properties then doubled down on the northern section switched the architect from Grimm + Parker to Shalom Baranes, increasing the number of units while connecting them better to the street. "It really took from fall of 2007 to spring of 2009 to get the two south parcels on the charts for historic preservation, and get the north to come off the locational atlas" said Eastwood. The residential towers originally conceived would have encircled a private courtyard, the new design adds a street through the center, with street-oriented buildings. "Its a more urban design than what we had originally."

Eastwood says the projects will "definitely be" rental units. Retail - about 10,000 s.f. in addition to the supermarket - will front East-West, aided by a new traffic signal.

Silver Spring, Maryland real estate development news

Silver Spring - Georgia Avenue Switches from Office to Residential

Design had been fleshed out, brochures were been inked, and the PR machine for Silver Spring's office tower at 8711 Georgia Avenue had been ambling along. At least until this past January, when plans were scrapped as Guardian Realty filed an amendment to eliminate the office plans and replace it with 160 residential units, keeping retail space. The hearing is scheduled for April 21st after the extension was granted in mid-January of this year.

Under the working name of 8711 Georgia Avenue Parking Lot LLC, the name passed down from original owner Zalco Realty Incorporated onto Guardian Realty Investors after the site was sold in 2007, Zalco intended to create a 13-story class A office building with a slice of retail two blocks from the Metro. Without a working tenant and with demand for residential rentals at an all time high as a result of the housing crunch, developers have now switched to residential.

"The owner [Guardian] tried to find someone to occupy the office spaces before it was built, but in this economy, it is difficult to find a tenant," said Yun Kim, senior designer for WDG Architecture, the design firm for the project. "Converting the proposed building from an office space to residential makes more sense in this economic climate."

The April 21st hearing is to review the change in use, said Robert Kronenberg, spokesperson for the Montgomery County Planning Board. "The building footprint will stay approximately the same. The amount of retail on the ground floor with remain the same. The difference is just in the changeover from office to residential." The change of plans would delay the North Bethesda based developer from a late 2011 early 2012 start.

A development in Silver Spring on a similar timetable is Silver Spring Park, formerly Moda Vista Residences, the Fenton Group LLC development in the former Fenton Street Market space that will make way for a 59,870 s.f., 60-foot-tall Fairfield Inn & Suites hotel with 110 rooms, a 28,170 s.f. office building, and a 58-unit apartment building. Groundbreaking for Silver Spring Park is projected for spring of 2011.

Silver Spring, Maryland Real Estate Development News

8021 Georgia Ave. to House Apartments by Priderock Capital Partners and DLJ Real Estate

Last week, Priderock Capital Partners LLC and DLJ Real Estate Capital Partners officially broke ground on apartments at 8021 Georgia Avenue in Silver Spring, a nine-story complex that will offer 210 units and two levels of underground parking. The complex will be comprised of two older buildings already on the property and a new one that broke ground on the 1.88 acre site last week.

Building will unfold in two phases: new construction, followed by building rehabilitation of the remaining structures. During the first phase of building, as the new structures are built, the older buildings will be cleaned of asbestos and brought up to code. BEK Construction Management Group has been awarded construction for the project and The Preston Partnership will helm design.

"This complex will be a place where middle class, working people can live without having to own," said George Banks, co-founder of Priderock. "That's the only difference between these apartments and condos." The complex will offer a gym with simulated golf, massage area, concierge, swimming pool, and secured parking. 13% of the units are slated as affordable housing, in compliance with city code, said Banks.

"We're trying to put quality housing stock back into the city by offering a nice place to live," he said. "We want to get these buildings back on the tax roll for the city." Banks expects for a grand opening date of October or November of 2012.

Priderock and DLJ Real Estate Capital Partners have contracts to buy at least three other properties on which to develop housing around the city. Banks has asked to withhold revealing the exact locations until after the close.

Washington, D.C. Real Estate

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

Donohoe Companies to Develop Near New Silver Spring Library, Purple Line Rail Site

Whether the acre adjacent to the Silver Spring Library at the corner of Bonifant and Fenton Streets will become condos or apartments, retail or restaurants, it's too early to tell. Here's what we do know: Donohoe Companies and Montgomery Housing Partnership (MHP) have been given the go to develop a mixed-purpose, mixed-income project.

The location is key, since the site abuts a future purple line station, scheduled to break ground in 2013. The sixteen mile light rail line will run between Bethesda and New Carrollton. The county issued an RFQ last February, and estimated that the site could hold 120 units of housing, but required that 60% of the housing on the site be subsidized.

VOA Associates have been chosen as architects for the project, which, according to a designer in the Washington office, could begin sometime in 2011. As these things go, we're guessing rail construction time lines will shape development; sometime in 2011 seems soon.

Richard Nelson, Director of Montgomery County's Department of Housing and Urban Affairs says as much. “Transit-oriented urban infill projects can be challenging," he said, "and it was essential to select a team with deep experience in transit-oriented development, multi-family housing, tight infill locations and mixed-use development.”

And don't forget about the rehabbing of the Silver Spring Library. The public has been weighing in on color (Apparently MCPL gave residents free reign to weigh in until earlier this month) materials and design for the 30 million dollar project, which is scheduled to begin in about a year and will take two years to complete.

It's likely the Donohoe project will align with the development of its potential neighbors. Let's hope three years from now when the projects are complete, residents will still like the library colors.

Silver Spring real estate development news

Silver Spring Park (aka Moda Vista) Moves Forward

In the works since 2007, Silver Spring Park, formerly known as the Moda Vista Residences, is moving forward in the good graces of Montgomery County Planning Board after the board approved the developer's final Site Plan last week. Fenton Group, LLC's application offered a bet-hedging vision that includes office, retail, apartment, and hotel components. The local Silver-Spring firm, headed by Ulysses Glee, has some twenty years of residential development experience, but this ambitious project will be by far their most significant to date.

The one and a half acre site, a consolidation of seven lots located at the northwest corner of the block bounded by Silver Spring Avenue and Fenton Street, and popularly known as the former location of the Fenton Street Market, will make way for a 59,870 s.f., 60-foot-tall Fairfield Inn & Suites hotel with 110 rooms, a 28,170 s.f. office building, and a 58-unit apartment building. A total of 9,234 s.f. ground floor retail will be split between the hotel and office building, while the hotel and apartment buildings will share underground parking facilities. Developers explained that the retail spaces will likely house boutique-sized businesses.

To satisfy County zoning requirements, seven of the proposed apartments will be moderately priced (or MPDUs for jargon junkies), five will be reserved as workforce housing. The streetscapes fronting Fenton and Silver Spring Avenue will get a full makeover as proposed by the developer. Fenton has also committed to earn LEED Silver certification for each of the new buildings. LEED-lovers and the County Arborist might be upset that three trees exceeding 30 inches in diameter will be lost during the necessary bulldozing during construction, but don't fret, as developers are including 14 newly planted canopy trees and 22 mid-story trees as part of their landscape plan.

But these concessions weren't quite enough to please County planners, as the 20% on-site public-use space obligation still needed fulfilling. Fenton's proposed 8,543 "pocket-park" only satisfies 17% of that requirement; as a result, developers will hand over $152,728 to Maryland-National Capital Park and Planning to fund the design and construction of a new bike station at Gene Lynch Urban Park, adjacent to the nearby Silver Spring Transit Center.

Gordon & Greenberg Architects provided architectural designs for the new buildings, while Burgess & Niple shouldered all of the site planning work. Developers expect another six months to finalize construction plans and secure building permits, with construction completion anticipated to arrive 12 to 18 months after the optimistic Spring 2011 groundbreaking.

Silver Spring, MD Real Estate Development News

Groundbreaking at 1150 Ripley Street

Minor construction work has now begun at 1150 Ripley Street in Silver Spring, but developer Washington Property Company will wait until next Tuesday to officially celebrate the groundbreaking of their 16-story multi-family building. The 306,000 s.f. building will add 286 rental units, and is being heralded by developers as the "first major construction project within the Ripley District in almost 20 years." On October 5th, Washington Property Company President Charles K. Nulsen III will be joined by Montgomery County officials to put a ceremonial shovel in the ground and provide remarks on the bright future of the Ripley District, including specifics on several other "exciting development

plans" in the area.

The building design, a generous use of glass textured by streaking and crisscrossing lines of metal as well as tall brick columns, is courtesy of the Lessard Group. Sitting on 1.16 acres of land, the apartment building will offer the usual assortment of amenities: business center, conference rooms, rec rooms, and a fitness center. Stocked with the standard array of studios and one and two bedrooms, the structure will stand atop three and a half levels of below grade parking totaling over 300 spaces. The ground floor will feature 7,000 s.f. of service retail.

The Ripley District, a triangular parcel of land in downtown Silver Spring, is bounded by Bonifant Street, Georgia Avenue, and the CSX Railroad. Sitting adjacent to the MARC railway and Silver Spring Transit Center, this is the type of transit-oriented development that county officials are hoping to encourage. The county’s Department of Housing and Community Affairs has offered $5 million in mezzanine financing, and hopes their visible cooperation and financial assistance will spur future smart growth in the area.

Silver Spring, and specifically the Ripley District, will look to mimic Bethesda and Arlington by sporting horse blinders, ignoring the recession, and plowing ahead. Officials will steer new developments to be "organized around open spaces, surrounded by a mix of high-density office and apartment buildings, with bike trails and pedestrian routes connecting residents to the nearby Paul S. Sarbanes Transit Center and the Metropolitan Branch Trail to Union Station in downtown Washington, D.C." Home Properties' Ripley Street North mixed-use development will look to follow this blueprint and give County officials another reason to smile, but no word on impending construction has been given. The plan for the Shalom-Baranes-designed 200 ft. residential tower and accompanying 80 ft mixed-use building was approved in 2008.

S.E. Foster, a subsidiary of the Paradigm Companies, is heading up general contracting duties, and will deliver the first units in roughly eighteen months. Full delivery is expected in approximately two years.

Silver Spring, MD Real Estate Development News

Falkland Chase To Begin Review Process

Home Properties is set to unveil their Falkland Chase redevelopment plans later this fall. The proposed development site is 9.7 acres of land at the northeast corner of 16th Street and East-West Highway in Silver Spring. The recently revised plans call for the currently standing 180 garden apartments to be demolished in order to make way for an urban infill, multi-building complex totaling some 1,250 rental apartments upon completion. The developers had first proposed stacking over 1,000 units into a single high rise, but smartened up when they realized such a large building would not go over well with the surrounding community. Last week the Montgomery County Planning Board approved a 60 day extension of the Project Plan Review phase, meaning developers will now present their plans to the Board on October 13th. In the works since 2006, just last year the developers caved to pressure from local preservationists and designated two parcels of the Falkland Chase Apartments complex as historic. But that hasn't stopped the developers from moving forward with their massive redevelopment of the northern portion of the property.

Master-planning was done by Shalom Baranes Architects. Four separate buildings (two of which rise 12 or 13 stories), connected by pedestrian pathways, will surround pockets of green space and landscaped courtyards featuring a swimming pool, pond, and water fountain. Nelson Byrd Woltz shouldered the landscape design work. Over 150 units will be designated as moderately priced, serving those making 50-65% AMI, while at least another 59 will be reserved as workforce housing. Also divided amongst the four buildings is the proposed 70,000 s.f. of retail space, with the 20,000 s.f. anchor space set to become a major grocery store. Although nothing is official, Home Properties expects to wrap up negotiations to bring Harris Teeter to the development shortly. The other retail venues will likely feature a mix of restaurants, dry cleaners, and convenience stores. A four story (half below grade, half above) 1,600-space garage will satisfy the parking needs of future residents and shoppers.

Sustainability will be a major factor given the project's proximity to the fragile Rock Creek watershed. Developers have committed to earning at least a LEED Silver Certification, and have promised to recycle as much of the construction waste as humanly possible. Several green roofs, rain gardens, and infiltration beds and cisterns will assist in collecting and processing storm runoff.

The review process is bound to shed light on some public criticism, as at least a few neighbors will be upset with the scope of the project. Developers are pushing to the ceiling on all the zoning specifications, proposing the maximum 3.0 FAR, 166 units per acre, and 143 feet in building height.

Detailed architectural renderings have not been released, although designers describe their material palate as consisting of the usual brick masonry, metal, cast stone and glass. The contemporary facades will also feature a variety of balconies, bays and exterior spaces.

Silver Spring, MD Real Estate Development News

Argent Opens Subsidized Apartments in Silver Spring

The Argent, downtown Silver Spring's only all-affordable apartment building, opens its doors tomorrow. Built in 2009 by Washington DC-based Perseus Realty LLC as "luxury" condos (outward appearances notwithstanding) the condo project languished with few sales (actually none) and financing gone south, sitting vacant for more than a year until sold earlier this year to Utah based Pallas Properties and Paradigm Financial Consulting for $24.8m.

Pallas snapped up the 96-unit property earlier this summer for $258,000 per unit, with the assistance of federal Low Income Housing Tax Credits in a plan that keeps 90% of the units set aside for tenants with less than 60% of the Average Median Income (up to $43,000) and 10% of the apartments at less than 50% AMI. The Argent offers underground parking and, in a rare twist for a multi-family building, stainless steel appliances, ceramic floor tiles, and granite countertops. The deal keeps the units income restricted for 30 years. Montgomery County contributed $5m through the Housing Initiative Fund.

But the addition of an entirely low-income building took neighbors by surprise, reports SouthSilverSpring blog, and not in a good way. Subsidized apartments are rife throughout Silver Spring - the Portico has 23 of 151 units bankrolled by taxpayers, Falkland Chase Townhouses (58 of 70), Alexander House (123 of 310), Silver Spring House (32 of 77), 1200 East West (32 of 245), Gramax Towers (153 of 180), the Veridian (58 of 457), and as DCMud reported just yesterday, the Galaxy is now under construction next door with 82 of 195 units dedicated to low-income tenants. Occupancy of the Argent, located at 1200 Blair Mill Rd., will begin in October. The ceremony will take place tomorrow at 9:30am.

Update Sept 16: At the ceremony, Montgomery County Executive Isiah Leggett released a statement that said “One of my top priorities is increasing the amount of affordable housing in Montgomery County...These units will provide much-needed safe and affordable housing to 96 individuals and families and give yet another boost to South Silver Spring.”

Silver Spring 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

Baby Steps Made, But Fight for Fillmore Music Hall Still Uphill Battle

Early last month the Montgomery County Planning Board approved preliminary plans for the Fillmore Music Hall and accompanying hotel and office buildings to built in Silver Spring; and just yesterday the Board gave a big thumbs up to the development team's most recent master plan and official plat. But a project that began in a buzz of ho-hum, high-fiving excitement has been slowed by lagging negotiations, and now a lawsuit filed recently by the owner of the 930 Club threatens to cast a dark cloud on groundbreaking celebrations set for later this fall.

The recently approved master plan roughly details the impending construction of a 135,300 s.f., 14-story hotel, a 12-story office building (5,500 s.f. reserved for retail use), and a 22,882 s.f., three-story music hall integrating the historic JC Penney facade and sides. The plan also calls for significant improvement to portions of the sidewalk and three street frontages.

Designers claim that the aesthetics of the planned structure fit with the surrounding buildings: standing mostly square, with no tower setbacks or height variance, and no significant differentiation of design or materials above the lower levels. The facade of the planned hotel reflects the fenestration and style typical of the era during which the adjacent Montgomery Arms apartment building was constructed. The JC Penney frontage, soon to be face of the Fillmore Music Hall, will be renovated in hopes of imitating the original San Francisco-based Fillmore West. Sporting dark red walls, vintage rock posters, and crystal chandeliers, the interior will also recall the first Fillmore, with the ability to house a standing room capacity of 2000 people. Hickok Cole Architects will design the new venue, along with the planned hotel and commercial buildings at Georgia Avenue.

The less daunting of the projects, the Fillmore Music Hall, will be constructed first. Upon completion of the building, the land and Music Hall will be donated to the County. This peculiar arrangement was part of the negotiations between the County and Lee Development Group (LDG) that made this entire $110 million redevelopment project possible. LDG's donation of the Music Hall will qualify as their public-space contribution required for their adjoining hotel and office space project. But the Fillmore Music Hall and its accompanying land (worth $3.5 million) hardly seems like a donation when Montgomery County and the state of Maryland have each agreed to subsidize the project to the tune of four million dollars, leaving LDG to foot only the remaining two of the ten million dollar budget. The transaction will afford LDG 15 years to complete the bordering project under current land use regulations, thereby protecting them from any financial complications or delays that may arise from future zoning rule changes or planning officials' interference. Once in the hands of Montgomery County, the Fillmore will be rented out to worldwide concert promoters and corporate entertainment giant Live Nation (their recent proposed merger with Ticket-master is currently stalled by anti-trust concerns). In 2008 Live Nation signed a $3.26 million, 20-year lease with the County, ending a tiresome six year negotiation process. Drawn out discussions with the Birchmere had previously unraveled.

All this might sound dandy to local concert goers, but Seth Hurwitz and his Bethesda-based company I.M.G., Inc, which owns the 930 Club and operates Merriweather Post Pavilion, finds the deal too sweet to be fair. Seemingly threatened by the new competition, and disenfranchised that he was not involved in negotiations for the lease of the new venue, Hurwitz has filed a lawsuit against the state alleging that the proper procedures for conducting financial feasibility and cost analysis studies, as required prior to allocation of funds, were not followed. The State and County believe they've done all that is required, but have not officially responded to the lawsuit. Until the lawsuit plays out, the state of Maryland is prohibited from matching the County's four million dollar pledge, but officials still expect ground to break later this fall, and to open the doors of the Fillmore in the fall of 2011. Local officials contend that the new development will not only be a tremendous new source of tax revenue and profits, as well as provide job creation, but also establish Silver Spring (with the AFI Theater right down the street) as a go-to destination for music, arts, and entertainment.

Renderings are courtesy of LDG. Silver Spring real estate development news