Social Safeway Opens Thursday

A little more than a year after the Safeway at 1855 Wisconsin Ave, NW, closed, Georgetown residents can welcome back an old friend this week, though they might not recognize the store after its reconstructive surgery. Following an invitation-only gala tomorrow evening, the new "Social" Safeway will open its doors on May 6th to the DC community with a ceremony beginning at 8 AM, joined by the likes of Mayor Adrian Fenty and Councilmember Evans. 

 The Georgetown store will operate 24-hours a day, seven days a week, and will be the first Safeway store to offer catering services in its geographic division, which stretches north to Pennsylvania. Unlike the former store, which sat at the rear of a surface parking lot, the new store fronts the street and sits on top of sheltered parking at grade with an additional parking deck in the rear. Acqua nail salon, a wireless phone store and a "high-end" pet store fill the three retail bays, according to Safeway spokesperson, Craig Muckle. Though much of the fare will be the same, there are a few additions that help the store meet the expectations of its customers, including a "wine cellar." Not just a wine area, but a separate chilled wine cellar that will be run by Georgetown native, Michael Quinn, and offer upwards of 2,500 bottles. The store will also offer a sushi bar and a Starbucks that open from 5 AM until midnight, longer than any other Starbucks nearby. Additional features include an indoor/outdoor terrace and a lounge with a fireplace and flat screen TVs. This is sounding more like a college campus than a grocery store. Once the store opens, Safeway will submit their Torti Gallas-designed building for review by the U.S. Green Building Council, expecting LEED certification for the final product. According to Muckle, the team "believes" that it will achieve LEED Silver certification, but there is a chance that the project could reach Gold. 

Washington, DC real estate development news

H Street Goes Big

Score yet another win for H Street. The dare-we-say trendy neighborhood that is sometimes maligned for its beleaguered street front, but just as often loved for its gritty resurgence, is closer to getting one of its biggest projects to date. The H Street Connection, a 433,000 s.f. residential and retail project that will fill two full blocks along H Street, cleared a major hurdle in its path toward District approval. Developer Parcel Seven Associates (a.k.a. Rappaport Companies), has been given approval recently by the Advisory Neighborhood Commission (ANC), an event that is certain to make its stock go up when the project goes before the Zoning Commission (ZC) for review. Designed by architects Torti Gallas, the new project will likely get a zoning hearing this summer. The ANC's support will be given weight during the hearings, which come now after more than two years of conversations between the developers and the community. A development of this size will certainly be transformative, but its larger effect may be suturing the voguish Atlas District with the still struggling corridor to the east, roughly from 3rd Street to 10th Street, where major developments are planned but seem on indefinite hold.

The H Street Connection's 52,000 s.f. of retail and 346 to 423 rental units will fit into the space between 8th and 10th Streets NE, replacing a one-story strip mall built in 1987 and occupied by stores like GameStop and RiteAid. The community gave a big thumbs down to the iteration first presented in November 2007; a letter from the ANC described the design as a "monolithic contemporary facade." The development team has since adjusted the design to create the appearance of multiple buildings more in line with the "rhythm and architectural style" of the surrounding neighborhood. In keeping with the community's requests, the massing will sit in the center and rear of the new structure, allowing the sides to step down to better match the surrounding two and three-story townhouses. The developer is asking for a density of of 5.0 FAR, less than the 6.0 allowed in the PUD zoning application. Below-grade parking will add 340 residential spaces and 65 retail spaces, with garage entrances off 8th and 10th Streets. 

According to ANC 6A Commissioner, Dr. Drew Ronneberg, "the city has a strong interest in having the site host 100 additional city-owned parking spaces that would serve retail establishments outside the building." Among other concessions, the developers agreed to a laundry list of community benefits to mitigate traffic congestion and encourage "green" living. The project will have to meet LEED silver requirements, though does not have to seek actual certification. There will be bicycle spaces aplenty in the parking garage, and lockers and showers for retail employees who bike to work. The developers agreed to provide one $20 SmartTrip Card to all initial and future residents up to $15,000, to fund up to $45,000 for a bike share station on undefined public property (quite a bit less than the Union Station bike hub cost), provide car sharing spaces, and pay for a one-time, one-year car sharing membership for initial occupants to max out at $19,000. We can see the marketing materials already. Ronneberg said the ultimate goal behind the community amenities was to "help catalyze...the development of H Street" and that after hammering out the amenities over the past six months "there's certainly nothing major the ANC asked for that did not make it into the package." Chip Glasgow of Holland and Knight, attorney for the developers, said "we have been working with the ANC for a couple of years and it has turned out to be a very good process. We are very pleased with the result...and people are excited." Glasgow indicated he hopes to be in front of Zoning in April or May and to have a hearing "sometime this summer." As for a timeline thereafter, he would not speculate, though Ronneberg suggested a 2012 start would be the earliest the community would expect anything. 

Washington, DC real estate and development news

Skyland's Supreme Challenge

Real estate development is sometimes an agreeable collaboration, sometimes a struggle, and all too often a wordy brawl, but seldomly is it constitutionally challenging. But that may well be the case in southeast DC's Skyland Town Center project, now in its 8th year of development. What began as a plan to redevelop a needy southeast neighborhood, a benefit most agreed was overdue, has morphed into a property rights battle that tests the U.S. Supreme Court's decisions on property rights.
Eight years ago, the National Capital Revitalization Corporation (NCRC) began planning a makeover of the strip mall, proposing 450-500 residential units and 280,000 s.f. of retail at the intersection Alabama Avenue and Good Hope Road, an area that saw none of the rejuvenation that occurred downtown over the last decade. The District-funded NCRC recognized the spot as a bullseye to spur development, one where private industry alone might not be tempted. The choice seems apt; shuttered beauty salons accompany a check-cashing outlet, a Discount Mart offers faded displays in the window, and the mismatched storefronts are united as much by their nearly-matching green awnings as by their peeling paint and disrepair. On a warm day, car traffic is heavy but the few pedestrians seem more inclined to linger on one of the park benches in front than patronize the stores.

Promoters have a vision: "A 20-year old dream, conceived by Ward 7 residents when this 16-acre site in southeast Washington, D.C. was declared a redevelopment zone in the late 1980's...will transform a disjointed retail area with limited offerings into a cohesive, well-designed, prominent living, shopping, and gathering place." Planners presented at a meeting to the ANC in February, promising a new retail experience for southeast: concentrated retail, multi-family residences, three above-ground parking garages, a 5-story streetfront presence, and reducing vehicular access points for less interrupted pedestrian traffic. As a bribe to locals, builders will throw several million dollars at homeowner counseling services, retail build-out subsidies, park improvements, sidewalk and road enhancements, and job preparedness.

The project was initiated during Mayor Williams' term, but the Fenty administration has gotten squarely behind the project, helping bring together the parties and promoting the project. The Council has even offered a $40 million Tax Increment Financing (TIF) package to provide gap financing to the team, a consortium including Rappaport Companies, William C. Smith & Co., Harrison Malone Development LLC, the Marshall Heights Community Development Organization (MHCDO) and the Washington East Foundation. The Feds, for their part, threw in $28m of funding to show their support. Even the ANC, which usually love development as long as its not in their district, voted to support the project.

With all the economic incentives and mutual bonhomie, what could stop such a beloved juggernaut? The people who own the land. A not-so-small detail in the rehash is that neither the development team nor the city owns most of the property; private owners (originally 15, predominantly retailers) still claim title to the land. And with concerns about displacement and the possibility that once the site is emptied developers will not have financing to build up again, owners fret that selling out means closing down, for good.

The District government is sympathetic, but not very. In view of the greater good for the area, the economic development that will ensue and tax revenue that will one day flow, District planners have opted to proceed with or without the owners' approval. In May of 2004, the District passed "emergency" legislation authorizing NCRC to use eminent domain proceedings - where the government determines and pays a fair market value and takes over the land - to acquire the 40 parcels it needed "in order to show the commitment of the D.C. government to the project." As the argument went at the time, if the District could not pull together a united front, financiers and an anchor store would be hard to come by.

That gave gastric reflux to at least some of the owners, who filed a counter suit to prevent the taking. The owners had two primary arguments: that the original PUD filed with the Zoning Commission was filed by a group that did not include the owners - an issue that is still outstanding - and that the eminent domain proceeding was unconstitutional, i.e., that the land was being taken for private use, not "public use" as required for eminent domain.

At this point forgive us for a brief Constitutional digression. The 5th Amendment to the Constitution reads, in part: "nor shall private property be taken for public use, without just compensation." Characteristically simple language for the foundation of U.S. law, but one that has caused recent debate. Until recently, it was obvious that sole authority for snatching land had to spring from a "public use" (building a new road or sidewalk, laying electric cables, forming a park, or even laying a railroad which served without exclusivity) - one where the government could take the land to further provision of a community service.

All that changed dramatically in 2005, when the U.S. Supreme Court issued its decision in Kelo, et al. v. New London, CT, et al. In the Kelo decision, the city of New London created a development plan for a waterfront neighborhood around an upcoming Pfizer research center. The plan was for parks, office space, retail and parking that would enhance the Pfizer site, one that was “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city..." Some lifelong homeowners, however, resisted giving up their waterfront homes, so the city and a private entity called the New London Development Corporation (NLDC), used eminent domain proceedings to oust the residents.

The Court found for the city, arguing that although much of the space would not go to "public use", the Court decided it "had long ago abandoned any literal requirement" for reading the 5th Amendment, literalism being "impractical given the diverse and always evolving needs of society." So much for the 5th Amendment. The court abandoned the "public use" requirement in favor of a "public purpose" requirement; in other words, if the local government found a generalized benefit of some sort (such as "economic development") to the community, it was free to authorize the seizure of one party's land by another party. In addition to getting value-enhancing development next door, Pfizer received corporate subsidies to encourage it to build, while the shore-front owners were soon evicted and had their homes razed.

Kelo remains the Court's official position, and the Skyland project has nearly identical circumstances. But owners here see even less public use than in Kelo - no parks or public waterfront - distinctions that helped the court reach its decision. With the Court having lost Justice Souter, a key liberal vote in the 5-4 opinion, another look at the same issue might find a distinction in the circumstances that warrants a different outcome. (Conservatives, more furious with Souter than ever after this decision, later proposed an eminent domain proceeding against his private New Hampshire home for the "public benefit" of turning his family home into a museum dedicated to individual liberties and the study of the Constitution. Property rights activists used the decision to launch national speaking tours).

While the ruling is a bitter pill to retailers at Skyland, the worse aspect may be the knowledge of what took place after the decision. In New London, the city removed the homeowners and bulldozed historic homes, only to have the development plan fail for lack of financing. The former neighborhood remains flattened and unused. Pfizer later announced that it will pull out of its research center, just as its tax incentives reach their 10-year expiration.

Dana Berliner, Attorney with the Institute for Justice, was co-counsel on the Kelo case. In a conversation with DCMud, Berliner said the instance of eviction without subsequent development is a very common one. "What you are talking about here [at Skyand] is really speculative. Its a big development in a difficult part of town...that project could easily end up destroying the jobs that already do exist at Skyland. They could spend tens of millions of dollars and end up with nothing. Now, the project actually does employ people and raise tax dollars." Zina D. Williams, ANC Commissioner for ANC7B is more sanguine. "We have worked carefully with the developers to ensure there will be a space for the old tenants." Will the developers have the money to proceed with construction? "Yes, they definitely do. Rappaport and the development team have been working with assisting [owners]. ANC7B and the developers have been working very hard to accomplish what's best for the project; we are confident this project will go forward, we definitely support the development team."

In the wake of Kelo, many states revised their eminent domain laws to prevent such abuse, but the District did not. Elaine Mittleman, an attorney representing several of the parties in litigation with the District and aware of the Kelo fallout, refutes the notion that owners and tenants have been well cared for, and notes that this development is "highly speculative." Mittleman believes the developers have neither sufficient financing nor any substantial tenants, despite having previously teased the community with the promise of a Target. Representatives at Target have repeatedly denied they have any plans to open a store there, and the Skyland website says only that "the site is being marketed to prospective tenants."

Mittlement notes a change for the worse once NCRC was abolished and negotiations shifted to District attorneys, claiming that the District has never negotiated in good faith with the current owners, some of whom have come to agreements on a buy-out, only to have the offer reneged when the District took over from NCRC. But others may have it still worse. "While the owners have a right to 'just compensation,' tenants don't have such rights and have never received an offer to be made whole...and while homeowners must be relocated, businesses have no such right, and the District has done very little to help them."

The Mayor's office says only that "there are several outstanding legal issues associated with the project that have complicated the development process, but the District is working closely with the development team...to accelerate the pre-development work so the project moves on a parallel track with the legal process." Mittleman contends that fighting eviction during a recession has pushed several of her clients close to bankruptcy. "Some of the business that are now shuttered were operating when the this plan became known, this process has already forced some to close." Berliner supports that contention. "Many, if not most, condemned business do not reopen. They almost never get enough to start over" she said, citing the Nationals Ballpark as an example of eminent domain that cost alot more and produced less development than predicted.

Councilmember Kwame Brown, who may have the last word on the subject, told DCMud that property owners are at fault for not listening to the community and allowing their businesses and Skyland to become blighted. Brown said neighbors want to be able to shop in their community, but have had to watch as other neighborhoods throughout the city have been redeveloped, some of which came about through eminent domain. "The community is sympathetic toward the owners, but it's hard to attract an anchor tenant when you are mired in a lawsuit...We are going to move forward and get this done. We will develop Skyland shopping center."

Washington, DC real estate development news

Silver Spring Church Goes Residential

Developer Lakritz Adler has presented its first plans to turn a decaying church into a large residential project in Silver Spring across from the new downtown library. The DC developer is working with the First Baptist Church on Wayne Avenue to build a roughly 200-unit apartment building and replacement church for the congregation.

According to Josh Adler, Managing Partner of Lakritz Adler, the developer has been working with the church for three years to develop a site plan, which should begin construction by late next year, replacing the 80-year old church with a 5-6 story apartment building and church along Fenton Street, between Bonifant and Wayne. Assuming approval by the county, the residential project would be the largest for the developer and its first church development, both on a small downtown site, which Adler says led to a challenge that other firms turned down for being "too complicated." But Adler says his firm was contacted by the church for the undertaking and found a good match, despite the novelties. "I can't say we've built a church before; but they have a church architect, Dimensional Dynamics, a Pennsylvania firm which has an expertise in that area." For the residential piece, the team has selected Torti Gallas of Silver Spring. While plans remain just that, Adler expects the project to include about 30,000 s.f. of ground floor retail, replacing what is now largely a surface parking lot. If things move expeditiously, Adler predicts construction could start two years from now. If all goes well, Lakritz Adler and First Baptist will erect a 5 story building (grading to 6 stories on the lowest portion of the site) along Fenton Street, with retail along the front that rounds the corner on Wayne, with a residential entrance on Bonifant. Current designs specify a concrete structured first floor for retail, a garage below, and a 4-level wood-framed residence on top, topping out at 60 feet measured from the highest elevation. Adler sees ultimate approval as likely. "We're not asking for any variances or exceptions. We've had a number of community meetings in the past month, as well as with Park and Planning Staff; we've gone in with a meaningfully smaller building than we are allowed to build there, and have tried to design it in a way that the community approves of." First Baptist, he adds, has been an active part of the design process. Located directly opposite the upcoming Purple Line station and new Silver Spring library, Adler says of the land "its a very important site, I don't think anyone could argue that it is the single best multifamily site in Silver Spring today." The developer promises the building will be worthy of the location. "It will be built accordingly, with lots of amenities, a nice roofdeck, and a business center. I would compare it to Ellington on U Street, the same kind of quality level. The very high end of residential quality for Silver Spring." The first plans for the site, created in 2007, were for an office building, but that changed with the shifting market. "It seemed like the office market was better at first, but our view is that residential market is starting an upswing" said Adler. While the team is building under the presumption of rental apartments, he notes that the project could of course go condo down the road. "The plan is for rental, but nothing is stopping us from switching in the future."

Silver Spring commercial real estate news

CityVista

CityVista Condos, 475 K St., NW, Washington DC
CityVista Apartments, 460 L St., NW, Washington DC

The CityVista complex in Mt. Vernon Triangle is comprised of 3 separate buildings: the "L" at City Vista with 149 condominiums, the K at CityVista with 292 condominiums, and the "V" with 244 apartments, which completed and began renting in Q3 2008. The K is 12 stories high with underground parking, with 59 subsidized condos. The L is slightly smaller, taking up 134,000 s.f. with 119 market rate and 30 low-income units. The project was built on the site of the former wax museum, in an area that still struggles with many underutilized lots that had offered promising development.

CityVista features 110,000 s.f. of retail - an "urban" Safeway with banking and dry-cleaning services, hardware store and Results gym. Building amenities include rooftop terraces and pool, a one-acre private elevated interior plaza, and underground parking. Developed by a group led by Lowe Enterprises, and by L.A.-based CIM, Bundy Development, and NDC, with land acquired from now-defunct NCRC. Architectural design was by Torti Gallas of Silver Spring and Michael Marshall, construction by James Davis Construction Company. Groundreaking occurred in May, 2006; sales, by Mayhood, began late 2005. Occupancy began in September, 2007 with delivery of the first units at the L, completion of the entire development was in late 2008. Condo prices started in the mid $300's for one-bedroom condos, mid-$400's for two-bedroom condos.

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Tenleytown Safeway Indefinite Postponement

It looks like all the fuss over the Tenleytown Safeway at 4203 Davenport Street is far from over. Last night the DC Zoning Commission approved a request from the Safeway project team to indefinitely postpone the review of the submitted plan, which was scheduled for this Thursday. The team submitted their request indicating they needed more time go back and address some issues brought forth by the Office of Planning and the community. The indefinite nature of the postponement suggests the Safeway team has been nudged into submission by the neighborhood over the past few months; in August a Safeway spokesperson had anticipated plans would be finalized by this past September.

The existing Safeway store is 35,000 s.f. and, according to the plans initially submitted to the Office of Planning, the new store, designed by Torti Gallas, would grow to 58,000 s.f. and include neighborhood retail like a coffee shop, dry cleaners and florist. The project would provide 176 off-street parking spaces, some of which will be on the ground level below the elevated grocery story and some in a surface parking lot. The roof would have 1400 s.f. of green roof elements, the remainder would be a "cool roof," which means a mere 2.6% of the roof is currently designed to be green. Though Craig Muckle, a spokesperson for Safeway, said the building would have other green features and would aim for LEED Silver at minimum.

In October, the Office of Planning expressed concerns about various elements of the plan and requested additional environmental benefits such as an expanded green roof and increased permeability in the surface parking lot. The OP report also cited issues with elements of the site design and building placement. The current plans seeks exemptions including a reduced number of parking spaces, providing 176 when 185 are required, and zoning changes, as several of the included lots are currently zoned for residential uses. Among the more significant requests from Planning was that the applicant better address why the project, given its location, should get zoning exemptions since, unlike many similar projects, the plan does not include any residential density. OP seems to suggest the project has neither demonstrated a need for the requested flexibility nor demonstrated the additional benefits to the community to justify a change in the zoning evaluation from a matter of right to PUD. To paraphrase, what's in it for "us"? A question neighbors have been more than willing to ask.

Neighbors object to a variety of elements about the plan. Certain voices clamor for dense mixed-use development that includes residential space and retail independent of the grocer. Others in the neighborhood prefer the short and squat nature of buildings in the surrounding area and would prefer to see changes come as matter of right development, leaving out the chance of future denser development. Then there are the standard worries about noise, traffic, and lack of community benefits. The community has some reconciling to do and Safeway now has plenty of time to get that feedback.

According to Muckle, the group "had been doing outreach and a number of issues arose" the team requested "more time to explore the issues without the pressure of a pending hearing prohibiting them from examining as fully as needed." Why the indefinite proposal then, why not six months? Muckle said Safeway did not want to be "pigeonholed" by a timeline. In Safeway's request for postponement, the team indicated that they will work with the community and Office of Planning to come to a consensus of sorts at which point the team and Commission will schedule a new hearing.

Washington, DC real estate and development news

West End Development Showdown

Two months after the drop-dead date for responses to the West End Development solicitation, the parties have released more information about what might replace the aging city-owned sites. Eastbanc-W.D.C. Partners is vying for the parcels, which it briefly controlled two years ago, against a team comprised of Toll Brothers, Paramount Development and Torti Gallas. At a recent community meeting the two groups presented their plans for the sites which include the West End Library, fire station, and special operations police unit. Neighbors have been told to expect a final decision this spring.

According to DMPED Communications Director, Sean Madigan, the Toll Brothers and Eastbanc offers were the only two received in response to the July solicitation. The December 17th community meeting was an opportunity for the groups to show off their plans and answer questions from an often outspoken neighborhood. Local residents became incensed over the lack of BID competition in 2007 when the District attempted to sell the land to Eastbanc Development, which developed the Ritz Carlton hotel and condo and 22 West condos, but which the community viewed as not arms-length.

EastBanc's plans for Square 37, the current site of the library, would create a 20,765 s.f. ground floor library with a 10-story residence above (rendering at left). Designed by LeMay Erickson Wilcox Architects, the plans call for approximately 153 market-rate residential units on the 2nd through 10th floors, and 9,000 s.f. of ground floor retail.

Eastbanc's plans for Square 50 - the fire station - include a replacement fire station on the ground floor and mezzanine with 52 affordable residential units on the 2nd through 4th floors.

At the public presentation Eastbanc responded to questions about including a grocery store in their plan. An Eastbanc representative explained that the group "can and would build a supermarket on site if the community and city united to support it," adding that so far the group has "heard more opposition than support."

The Toll Brother's - Torti Gallas-designed plan for the library calls for 48,000 s.f. of retail, including a 40,000 s.f. grocery store. The library, which the solicitation encouraged developers to keep in the immediate vicinity, would remain in place; 21,300 s.f. on two levels. To top it off, the building will be designed to LEED Silver standards and include as many as 220 residential condos (with views of New York City, if the submitted renderings are accurate).

The group did not submit a plan for the site of the fire station. At the public meeting a Toll Brother's spokesperson explained the decision, saying "if there were some flexibility in some other areas of the Project...we would be willing to discuss subsidizing the construction of the new fire station in Square 50, but we would not be interested in purchasing this site from the District."

Now with two options for Square 37 and only one for Square 50, the DMPED's office will review the community concerns, which they will continue to accept through January, and may eventually request a "best and final offer" from the developer that demonstrates a response to community feedback. A decision should be made by the spring, said Madigan, at which point the land disposition negotiations will begin. Madigan indicate that process could take between 6 and 12 months, and would end with review by the City Council.

Eastbanc had been awarded development rights to the site in 2007, but an outcry over the non-competitive award caused the Council to revoke the grant. Eastbanc was one of the partners awarded the rights to develop the Hine School at the Eastern Market last September.

Washington, D.C. real estate development news

New Tenleytown and Georgetown Safeways

Take that, Whole Foods. Thursday was a big night for Safeway in northwest DC, with the group announcing that the Georgetown store would seek LEED certification, meanwhile the plan for the Tenleytown location continues its review by the ANC.

The Georgetown "social" Safeway, at 1855 Wisconsin Ave, NW, is expected to complete this May the replacement for the store demolished in April of 2009. Safeway will submit their Torti Gallas-designed building for review by the U.S. Green Building Council, expecting LEED certification for the final product.

Up the hill, the ANC continues to review a similar plan for the Tenleytown Safeway at 4203 Davenport St., but not without much heated debate. The zoning change for the Tenleytown store is set to go before the Zoning Commission on January 14th of the new year. The new design involves a two story building replacing the squat, windowless monolith that now presents its backside to Wisconsin Avenue.

Assuming PUD approval, renovation of the Tenleytown store will not start until the Georgetown Safeway is completed to avoid closing two nearby stores simultaneously.

The two buildings are Safeway's salvo in the supermarket wars; Safeway has been on a binge of renovating and rebuilding its stores to respond to increasing competition among grocers. Whole Foods will answer when it opens its next DC-area store this summer, just five blocks up the street, and Giant will open its flagship on Wisconsin Avenue in 2011, but Harris Teeter seems to have been elbowed out of the Wisconsin Avenue scrum.



Correction: In the original report DCMud indicated the Tenleytown store had received ANC approval. It was brought to our attention by the ANC this was not the case. There was a miscommunication between our staff and the source of the story. We apologize for the mistake.

Clarendon Center Approved and On Schedule

Clarendon Center looks likely to accomplish a feat many other construction projects cannot these days - delivering both planned elements of a project at the same time, on time. Impressive too because the project required complicated excavation, demolition and construction work close to the subway tunnel that runs under Clarendon Blvd. Developer Saul Centers Inc. (SCI) expects both buildings, which offer a mixture of office, retail and residential, to be finished and ready for tenants come the 3rd quarter of 2010.

Construction began in summer of 2008 on the south buildings of the large mixed-use project that sit directly across from the Clarendon Metro. The south buildings topped out in late October and the six-story north office building just received an above grade building permit in late November, for 171,000 s.f. of office space and 42,000 s.f. of retail space. Chris Sowick of Cassidy & Pinkard claims "significant interest" in the project, adding that the buildings do not necessarily require a large anchor tenant; the smaller floor plates of the 6-story north building mean a tenant could rent a space "as small as 7,800 s.f." The south buildings offer 9 stories of office and retail space and 12 stories of residential space, which includes 244 rental units. Nothing is leased on the south building either, though Mary Beth Avedesian, the Vice President of Acquisitions & Development at SCI, said there has been a lot of interest in the project given the proximity to the metro, especially from restaurants. Avedesian indicated the group is in "various stages of negotiation," but nothing finalized. Avedesian offered that rents seem to "still be holding up" at the expected level around $50 to $70 per s.f. for retail space. Construction for the project is by Clark Construction. The buildings were designed by Torti Gallas. 

Clarendon real estate development news

Community Boycotts Groundbreaking for Affordable Housing

When the development team for the $35 million Linda Joy and Kenneth Jay Pollin Memorial Community Development in northeast DC announced its groundbreaking scheduled for tomorrow, one thing they didn't count on was fierce opposition from the community. But they've gotten it, and then some. ANC7D organized a phone and email campaign that ultimately convinced Councilmembers Kwame Brown and, according to the ANC press release, Chairman Vincent Gray to boycott tomorrow's press conference and groundbreaking scheduled for 10:45 AM at Anacostia Avenue and Hayes Street, NE. Though Gray's office indicated the groundbreaking was still on his schedule. Pollin Memorial Community Development, LLC's planned development would bring 125 new affordable for sale and rental homes to northeast, a site which is a composite of property belonging to 3 government entities – the District of Columbia, the District of Columbia Housing Authority (DCHA), and the National Parks Service (NPS).

The Pollin project will replace one-for-one the 42 affordable rental units on site, known as Parkside Additions. The project was initially spearheaded by the late Abe Pollin and his Pollin Foundation, which courted the approval of all landowners back in 2006 and received approval for the project from NCPC last year. The current Parkside project was described by the National Capital Planning Commission (NCPC) as “functionally obsolete,” so no real loss there.

In July of 2009, ANC7D reviewed a loan request for $7.9 million submitted by the Pollin Foundation to the DCHCD (DC Housing and Community Development), however with only 30 days provided to submit a response, the ANC unanimously rejected the request, and continues to object. ANC7C04 Commissioner Sylvia Brown told DCMud in an email that the "Pollin team have not been transparent and open to communications." Of particular concern is the community benefits agreement and the plan for relocation and return for current Parkside tenants. According to Michael Price, spokesperson for Councilmember Kwame Brown, "the community is adamant that they are looking for a community benefits package and the Councilmember stands by them."

Terri Bolling, Spokesperson for Enterprise Community Investment, one of the development partners on the project,was unaware of the community's recent actions and plans to boycott the groundbreaking. She remarked "this is so strange" since community outreach "is what we do."

John Stranix, formerly of Clark Construction and now of Stranix Associates, is spearheading the construction effort using designs by Torti Gallas & Partners. The project aims to begin construction in early 2010 with the first units available in 2011.

Washington, DC real estate and development news.

Brookland and Abdo Getting Closer to New Development

Abdo Development's plans for a section of the Catholic University of America (CUA) were given a hearing this week, following up on its October review before the Zoning Commission for amendment to CUA's campus plan. The sizable mixed-use project is planned for 8.9 acres of land on the CUA South Campus, on either side of Monroe Street between Michigan Avenue and the Brookland Metro. The hearing set the stage for final approval come December, and, assuming PUD approval, the developer expects to begin construction in 2011. In May of 2008 Abdo beat out a group of competitors including EYA, Monument Realty and Trammell Crow for the right to purchase the land from CUA and develop it. Though the purchase is not finalized, Abdo is under contract to purchase the property prior to the start of construction. The development team is seeking a flexibile approval for a residential development that would constitute anywhere from 725 to 825 units in what is proposed as 4 multi-family buildings with room for 80,000 s.f. of ground floor retail space with an FAR of 2.37. Of that 8%, or 63,000 s.f., will be affordable at 80% AMI. The plans also include 45 single-family homes, ranging between 3 and 4 stories with 2 to 4 bedrooms. The PUD application also contemplates a 3,000 s.f. "Arts Flex" building to serve as a community meeting area with space for art shows, recitals, and well, any other artsy undertaking. The development team plans to build for some type of LEED certification. The Arts feature of the Abdo project will likely be the first phase executed once construction begins. The plan includes an arts walk to serve as a pedestrian connection from Monroe Street to the metro station. On either side of the arts walk will be one multi-family building split into two wings, joined below grade by a parking garage. The ground floor of the building will include 27 artists studios to frame the pedestrian walkway. Work space will feature glass roll-up doors that artists can open during fair weather and weekends to engage the public and invite them into the studios. The feel, according to Abdo Vice President Toby Millman, will be something of a mix between Alexandria's Torpedo Factory and DC's Eastern Market. In addition to the ground floor work spaces, the nearby Arts Flex building was designed to reflect an "old warehouse style," given its proximity to the railroad tracks. The multi-family homes will be built with a mixture of masonry and pre-cast stone and, though originally planned at eight stories each, the buildings will reach only six stories in order to comply with the Brookland/CUA Small Area Plan developed during Abdo's planning process. One structure will only reach four stories in response to requests for reduced height or scale from community members living in neighboring single family homes on Lawrence Street. Millman described the architecture, a combination of designs from both Torti Gallas and Maurice Walters, as bridging the styles between the 100-year old CUA collegiate gothic and Brookland neighborhood's arts and crafts style. During one Commission meeting, Commissioner May critiqued the design saying the design "doesn't need to be so overtly historic" and that "it just seems a little odd." In the end, though, the overall design did not run into many hiccups with the community, largely due to adherence with initial recommendations for use, size and design in the small area plan. Millman said one of the goals of the design was to take Monroe Street - which he described as "not very active or interesting right now" and to turn it into "a vibrant retail main street." Developers were adamant during their hearing and in conversations with this publication that the retail they seek is community-serving; big boxes need not apply. Millman envisions a "vibrant, eclectic college town type atmosphere" with bike shops, sidewalk cafes and bookshops to serve both the college and neighborhood. 

Washington DC commercial real estate news

Grocery Store and Apartments Coming to H St NE

The H Street corridor may soon have a new 6-story apartment building and full service grocery store, a boon for the up-and-coming neighborhood in northeast Washington DC. Steuart Investment Company has owned several of the lots on the northeast corner of 3rd and H Streets, and in 2005 assembled a developable site by acquiring the remaining portion from BP AMOCO (BP) for $1.5 million, scotching BP's plans for a giant filling station and truck depot. The developer plans to build a six-story building with over 200,000 s.f. of residential and 46,500 s.f. of retail designed by Torti Gallas. The mixed-use building, with neighborhood approval, calls for an anchor grocer and LEED- certified rental units, and will continue the reinvigoration of a corridor already known for its burgeoning restaurant, bar and entertainment scene.

 

Things have not always been so peachy at 3rd and H. BP once had plans for a "BP Connect" gas station megaplex, but the company met severe opposition from the community and, after knocking down historic houses on the site in favor of gas pumps and a truck stop, abandoned plans. The Steuart acquisition was welcomed with relief when its PUD application for zoning changes was first approved in 2006, with local ANC and community groups supporting the application. Steuart will go back before the Zoning Commission November 30th to request several changes to the original plans, reducing the number of stories from eight to six and removing one level of parking. The new proposed application includes 212 residential rental units, featuring studios, one-bedrooms and a few two-bedrooms, as well as two levels of below-grade parking. The first level of parking will service the grocery store with 152 planned spaces and the second level would be reserved for residents with 146 spaces (0.7 spaces per unit). Pending Commission approval, Guy Steuart, Sr., Vice President of Steuart Investment Company, said he hopes "all the pieces will come together" and will be digging by "mid-summer or fall of next year." Construction now underway is Steuart's consolidation of the lot and installation of storm sewer and water connections. 

As DDOT executes the H Street Great Streets Plan, the developer decided to take advantage of the "mess" and install utilities now to avoid future expense and inconveniences for area residents later. However, Steuart said his group will not move forward with construction until a grocer is signed on for the retail space. He affirmed discussions with a full-service grocer, but was unwilling to disclose which one. Previous discussions had fallen through with a grocer that had decided to locate on the other side of NOMA, referring to the Harris Teeter coming to Constitution Square. So residents might be looking at yet another Safeway (which would be consistent with Torti Gallas's extensive work with the grocer throughout the DC area) or perhaps a Giant or even, dare we say, Whole Foods on H Street? No one would have thought that was likely in Logan Circle ten years ago. Meanwhile, the Dreyfus property group plans for a similar-sized apartment building just across the street that has yet to start construction. Hopefully both will rent more quickly than the painfully slow pace of occupancy next door at Senate Square.

Washington DC retail and commercial real estate news

MoCo's Largest Residential Building is Capped

Montgomery County's tallest residential tower is now in North Bethesda, a 24-story highrise across from the White Flint Mall that earned the distinction just yesterday. The JBG Companies capped the residential portion of the North Bethesda Market on Thursday with the pouring of concrete on the top floor. In addition to the 187-unit tower just off Rockville Pike, North Bethesda Market will feature a new 6-story, 210-unit apartment building and 200,000 square feet of on-site retail space, including Whole Foods (expected to open next summer / fall) and L.A. Fitness, the only retailers to sign up, to date. All the buildings will face an interior courtyard raised above street level. All of the 397 units, about 15% of which will be affordable, are intended to be rental apartments, according to JBG. Despite yesterday's milestone, future residents will have to wait another year to enjoy its "upgraded amenities," if the developer's construction assumptions are correct. JBG says amenities for the new building include a swimming pool, fitness center, billiards lounge, Wii, theater room, and an "exquisitely manicured rooftop courtyard with stunning panoramic views." Completion of the project will also extend Executive Avenue to Rockville Pike. 

HKS Architects was responsible for the design of the overall project. Mike Nicolaus, Managing Director of the DC office of HKS, said the project has been in the works since 2004, highlighting the complexity of zoning approval on the busy corridor. Nicolaus said height was important because the county was looking for a 'gateway' to North Bethesda from the south. "That was part of the rationale for approving something of this height; an important part of the approval process." Regarding the future of the area, Nicolaus thinks Rockville Pike will be much like the Rosslyn-Ballston corridor in density and texture. "Someday soon that that entire neighborhood is going to be very dense." HKS has designed numerous large scale projects in the area, including Waterview in Rosslyn and Gallery Place in DC's Chinatown. Torti Gallas performed initial site designs, Clark Construction is the project's general contractor. The project, then in the planning stage, was recognized in 2005 by the Washington Smart Growth Alliance. JBG is one of the largest real estate developers in the DC area.

North Bethesda commercial real estate news

Arbor Place: A Pulse Detected

Abdo Development's Arbor Place project, an unusually large outer New York Avenue project which received initial approval in February 2007, is back on the boards. At a hearing before Washington DC's Zoning Commission on July 30, 2009, Abdo asked for consolidated approval of a Planned Unit Development (PUD) and related zoning map amendment from C-M-1 to CR Zone district for the same land. In a move that clearly reflects the financing constraints many developers are facing, Abdo has significantly downsized the planned development and is working with DC to subsidize the first phase of construction (at least). The new Arbor Place is a planned mixed-use community on the colossal 17-acre triangle bordering New York Avenue, Bladensburg Road, and Montana Avenue, NE, (click on map, above) a section of real estate now dominated by warehouses and dilapidated commercial buildings. 

The site counts the opposite National Arboretum as an advantage, but sits on a challenged stretch of New York Avenue sometimes referred to impolitely as "the Devil's bowling alley" for its lengthy sameness, segregated by the CSX lines that run adjacent. The project will also include three new internal roads. The original PUD called for approximately 3,500 residential units, 148,120 sf of retail for lease, 4,294 parking spaces, one acre of open space and an overall floor area ratio (FAR) of 4.98. The drastically smaller new plan offers approximately 1,400 residential units, 1,254 parking spaces, 69,883 sf of retail for lease, 2.71 acres of open space and a less dense FAR of 2.46. In Commission filings, the developers admit "the new application reflects changes to market conditions." Most notably, the new filing changes the subsidized portion of the project from a mere 8% of units to 70% of units. About 25% of those units will now be available to residents at 80% AMI (Area Median Income) or below, and another third would be available to low-income households earning 60% AMI or less, and in some cases 50% AMI or less. The remaining 30% would be market rate. In their pre-hearing submission, the applicants, which still includes New York City-based Broadway Development, claim the "affordable housing component is the PUD's most significant project amenity and public benefit," a fact which underscores the removal of several project amenities, such as expansion of a local recreational facility and on-site health club. 

The affordable housing provision is now the subject of substantial negotiations over workforce housing programs between Abdo and the Office of the Deputy Mayor for Planning and Economic Development (DPMED). The developers will "utilize a combination of direct subsidy and tax incentives to finance and construct the initial phases" of Arbor Place. These financing programs determine the distribution of affordable units in the PUD. Phase I, set to begin approximately two years after PUD approval, will start with two buildings that run along New York Ave. and part of Montana Ave. Every unit in Phase I will be available only to households at or below 60% AMI. Phase II's five buildings run along Montana Ave, New York Ave, part of Bladensburg Rd. and new internal roads. This phase provides 20% of units at 50% AMI and the remaining at market-rate, which the developer intends to price at a level generally affordable to an 80% AMI level. Phase III's three buildings run along Montana Ave and Bladensburg Rd and will be entirely market-rate, which the developer anticipates will generally priced equivalent to workforce housing. The developers expect Phase III to be ready 15 years from the Zoning Commission Order.

Arboretum Neighborhood Association President, Bleik Pickett, submitted a letter to the Commission expressing overall support, but with several key concerns. The original PUD had included a commitment to support and expand the local recreation center, and plans for a health club as one of the retail facilities. Neither offer exists in the new PUD application and residents are concerned about the influx of people without the necessary neighborhood resources to handle it. The letter mentioned that Abdo had expressed interest in a public-private partnership to provide resources for the community, and which it wanted reinstated. 

The Architect and Master Planner for the project is Maurice Walters; Torti Gallas and Jyh-Mei Lee, AIA (Abdo's in-house architect) are project architects. Additionally, Shalom Baranes Architects and Bradley Site Design are the landscape architects. The watercolor renderings were done by ArchiBIM, Inc. The Zoning Commission approved the consolidated PUD application and the Zoning amendments, and has now submitted its recommendation to the National Capitol Planning Commission (NCPC) for review. The NCPC will review the application and send a report back to the Zoning Commission. A final hearing before the Zoning Commission is scheduled for September 14th. Barring any bureaucratic hi-jinx, the application would then be approved. The guidelines for PUDs mandate that the developer has up to two year after approval to apply for a construction permit and an additional year after that to begin construction. If the two year or three year deadlines are not met, the PUD becomes void. The original PUD application is now void, due to the alterations and the above described time lapse. Assuming the Zoning Commission approves the new PUD application on September 14th, 2009, Abdo will have two years from that date to apply for a construction permit and an additional year to begin construction.

Washington DC retail and commercial real estate news

Jazzed about Florida Avenue

You've got to appreciate DC's Shaw residents. The small northwest neighborhood has seen more development projects announced - and sit idle - than any other, leaving residents in a cycling state of hope and apathy as the neighborhood talks about big plans with little effect. One such disappointment was the flea market-sporting WMATA site at 8th and Florida Avenue, awarded to a developer more than a year ago, only to sit out the ensuing financial crisis. But thanks to city and federal dollars, and a restructured partnership, that may finally change.

Banneker Ventures has announced a new partnership with Bank of America (BOA) to develop the former WMATA site into three new "affordable" apartment buildings. Banneker can now go forward with The Jazz @ Florida Avenue, designed by Silver Spring-based Torti Gallas, turning 3 separate lots into 124 apartment units above 20,000 s.f. of ground floor retail and a 61-space parking garage, all straddling WMATA's metro tunnel below. The developers have already applied for, and been granted, Tax Increment Financing (TIF) in the form of a $7m promissory note from the District. And with the District's recent receipt of $33m in stimulus money for housing, the developer has petitioned the District government to receive a portion of those funds. As a result, the apartments will be entirely below-market, open to a mix of income ranges, with the cheapest one-bedroom units to rent out at $768. Developers hope to deliver the project in late 2011.

The long path to development began in May of 2007 when the WMATA Board of Directors issued an RFP for developers to build on the site. The Board did not make its final selection, however, until June of 2008, selecting a team that included Banneker and Metropolis Development. But the latest announcement drops Metropolis from the picture in place of BOA. In addition, the formerly tiny project footprint now includes two adjacent parcels on 9th Street recently acquired by the development team. Bozzuto will serve as the general contractor for the project.