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Friday, March 09, 2012

WPC's Wheaton Residential Project to Break Ground In May

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Washington Property Company's 245-unit residential building at 10194 Georgia Avenue is on target for a spring groundbreaking, adding to the long list of greenlit revitalization projects in Wheaton. "We're out to bid now [for a general contractor], and hope to start construction in early May," said Daryl South, Vice President of Development for WPC. "Everything's ready to go."

Washington Property company acquired the 1.65-acre parcel, which is just steps from the Wheaton metro station, in 2005.

According to a site plan approved by Montgomery County planners in October of last year, the Preston Partnership-designed building will be a six-story u-shaped structure, opening to the south, with the interior space used for a swimming pool and greenspace. Designers used a "variety of masonry and glazing" as well as small parapets and height variations ... to minimize the sense of building mass." Underground, developers are shooting for at least 230 parking spaces spread over two levels, and will be required to offer 12.5% of the dwellings as (subsidized) MPDUs. The site is the former home of the First Baptist Church of Wheaton, which has relocated to Washington Christian Academy while construction on their new building in Olney is completed.

WPC's residential tower is just one of several projects that have gained recent momentum in downtown Wheaton; just a few blocks north is the already approved 17-story Safeway/residential project from Patriot Realty, and across from that is the Computer Building, set to be converted by Lowe Enterprises into a residential tower. At the Wheaton Metro station, bus bays are to be converted into an office complex by B.F. Saul, which is also in talks with the county about converting nearby Wheaton Triangle into a massive mixed-use megadevelopment that would bring nearly a million square feet of office space, retail, a hotel, and a public plaza to the area.

Wheaton, Maryland real estate development news

Thursday, February 16, 2012

Will Old Post Office Deal Accelerate Hoover Building's Demise and FTC's Move From Apex?

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The General Services Administration's controversial nod to billionaire Donald Trump's bid for underutilized Old Post Office has refocused attention on the eastern end of Pennsylvania Ave. where several key government buildings could be in play.

Top of the list is the J. Edgar Hoover Building between Ninth and Tenth Street.

In November 2011, the Government Accountability Office released a report detailing what to do with the tired and unpopular J. Edgar Hoover FBI building on Pennsylvania Avenue. The Hoover Building, a Brutalist piece of concrete completed in 1974, has few current fans, even among the District's vocal preservationist crowd.

"Nobody will shed a tear when it goes," said Steve Calcott of the District's Historic Preservation Review Board. It's also much maligned as a "block-killer" for Penn Quarter as security considerations nixed any plans for street level retail. "We're just waiting for the day when the bulldozers arrive," said Karyn LeBlanc of the Downtown DC Business Improvement District.

The structure is equally unloved by the G-men as well, apparently. According to the GAO report, leaks, lack of windows, and poor access make the Hoover Building despised by its inhabitants, many of whom are now farmed out to other buildings in the D.C. area post-9/11 for security reasons.

The FBI desperately needs to centralize those agents to streamline operations and react more swiftly to threats. That's compounded by the fact that since 9/11, the number of FBI personnel working in and around Washington has nearly doubled, from 9,600 in 2001 to more than 17,600 in 2010. Given too that the FBI building and its agents are a prime terrorist target, the GAO's report also references key security weaknesses in the building (the specifics of which are classified in this report) that make it a prime candidate for replacement outside of the aesthetics.

The GAO's recommendations should cheer anybody eagerly awaiting a wrecking ball for the old structure. The government watchdog agency noted that at 2007 prices, remodeling the existing Hoover Building to come into compliance with EnergyStar and LEED certification would top $1.9 billion and take nearly a decade and half of work to complete.

Conversely, demolishing the unloved building and replacing it with another at the same site would cost a relative pittance, just $850 million, completed over nine years. Meanwhile, building the FBI a new headquarters somewhere else in the Washington metro area would cost about $1.2 billion and take seven years.

The rapid appreciation of real estate prices on Pennsylvania Avenue could make selling the land to a private developer an incentive for the GSA to find a new home for the FBI. The land that was $41 a square foot in 1963, when the GSA purchased 233,000 s.f. to build the FBI building, is now worth more than one hundred times that, says Gerry Widdicombe, director of economic development at the Downtown DC BID.

That would mean a windfall for the GSA of $500 million to $800 million, (minus $20 million or so for demolition) -- half the cost of building a new FBI building on a new site, Widdicome said.

It would also create a prime spot for a developer to bring more retail, given that Donald Trump plans a luxury hotel and restaurant across the street. "You knock down the FBI building, you can have a serious conversation with a department store like Harrods, or Bloomingdales, or Selfridges, since you would have the necessary volume," he said. "There's no doubt that the Trump deal for the Old Post Office will move the conversation about the FBI building forward."

While a suburban campus location for the FBI might appear the ideal choice, if only to free up the
real estate beneath the building, Britain's FBI equivalent, MI5 has stayed in Central London as the agency has grown, moving into a rehabbed government building, Thames House (right) in 1994.

Towards the same end of Pennsylvania Avenue, the Art Deco Apex building, built in 1938 and currently occupied by the U.S. Federal Trade Commission is also being sought after as an expansion for the National Gallery of Art. Rep. John Mica, a Florida Republican who heads the House Transportation and Infrastructure Committee and oversees the GSA's plan of disposing federal buildings, has made it clear he wants the FTC out of the Apex Building and the National Gallery of Art in. "One way or another we are going to get that building," he told GSA head Robert Peck in a recent hearing on Capitol Hill.

Despite criticism of the Donald Trump deal for the Old Post Office Pavilion, the GSA has had recent success in transforming dormant federal
properties into vibrant spaces. In 2002, the GSA partnered with San Francisco-based Kimpton Hotels to open the Hotel Monaco in Penn Quarter in the former Tariff Building which had stood empty since 1987. The opening of the hotel was soon followed by the Spy Museum and Zola restaurant in the 800 block of F Street.

Widdicome said that demolishing the block-killing Hoover Building, as well as re-purposing the Federal Trade Commission building as a museum, together with the new 250-room Trump Hotel at the site of the Old Post Office Building would go a long way towards improving the Eastern end of Pennsylvania Avenue, which columnist Russell Baker called "a marble graveyard" after dark.

Next up, says Widdicome, will be repurposing the underused Pershing Park and Freedom Plaza, as well as relighting Pennsylvania Avenue to make it more amenable to pedestrians. "Things are finally falling into place for Pennsylvania Avenue," he said.

Washington D.C. real estate redevelopment news.


Friday, February 03, 2012

Glenmont Sector Plan Changes Unveiled

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At last week's monthly meeting of the Montgomery County Planning Board, MoCo planners unveiled an ambitious updated sector plan intended to spur redevelopment of the area surrounding the Glenmont metro station.

The previous plan, from 1997, envisioned a transit-oriented center surrounded by stable family-oriented neighborhoods, but the new plan seeks to seriously increase density by encouraging commercial development. The first major target of this strategy is the Glenmont Shopping Center, a 196,000 s.f. Sixties-era strip mall at Georgia Avenue and Randolph Road that, according to presenters, many in the community describe as "an eyesore." There hasn't been large-scale construction there for over a decade, a stretch of inactivity presenters ascribed to the patchwork ownership situation. At present, there are fifteen properties under thirteen ownerships; presenter and Montgomery County Planning Department senior planner Michael Brown said that his office had surveyed the owners and that "nine or ten of them agreed they wanted something to happen," but that that's as much of a consensus as they could reach. (Later in the meeting, someone remarked that solving this divided ownership situation should be at the top of the "to do" list. After a moment of silence, everyone broke out into cynical easier-said-than-done laughter.)

The second major parcel is Privacy World, presently a 31-acre complex of 352 garden apartments. Brown said that there was a development proposal "in the pipeline" to convert Privacy World into a 1500-unit mixed-use complex with ninety thousand s.f. of retail space. "It's the only private project in the pipeline right now."

But there is a significant amount of public development, which is partly why planners think now is the time to push forward with a wholesale makeover for the area. The state is building a raised interchange at the intersection of Georgia Avenue and Randolph Road which will significantly ease traffic flow in the area, and there's also a 1200 space parking garage being constructed by WMATA along Georgia, as well as a new Fire Station 18 going in next door.

Planners also singled out a trio of Sixties- and Seventies-era housing complexes for particular scrutiny: Winexburg Manor, a 625-unit 33 acre parcel, Glenway Gardens, a 214-unit 15 acre parcel, and Glenmont Forest, a 482-unit, 33 acre parcel of three-story garden apartments. "Given their age and condition," says the report, "their redevelopment potential should be evaluated." The presentation also touched on Glenmont Greenway, a large greenspace set on top of the Glenmont metro station. Residents have long complained that the space is desolate and deserted, a charge acknowledged by planners. "The 1997 plan intended for adjacent townhomes to activate the space," said Brown. "But they never came."

Brown outlined a tentative schedule for the next steps: a series of "community visioning" workshops throughout February and March, presenting the board with draft recommendations in April, a public hearing in September, and a finished planning board draft at the end of the year. (Board members remarked on this "aggressive scheduling," which provoked another round of rueful laughter.)

Though some board members urged Brown's office to consider ways of making the area more pedestrian and bike friendly, and warned of the "active discussion" he was sure to get from the community in response to the proposed changes, the scope of work sector plan was approved by the board unanimously. The first community visioning workshop is February 4th.

Montgomery County Maryland real estate development news

Friday, January 27, 2012

Bethesda Lot 31 Project Delayed (Again) Until February

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Groundbreaking for Lot 31, the public-private StonebridgeCarras-PN Hoffman project on Bethesda Row, in the works since 2004, missed its January target date after being delayed yet again. But lead developer Stonebridge and Montgomery County government officials say it's not because the project is flagging on the home stretch - nor was the delay a response to complaints from local businesses about the closure of the lots and of Woodmont Avenue during construction.

"Just paperwork," said Esther Bowring, Montgomery County public information officer. "The project is still very much full steam ahead. We just need to make sure all the paperwork, all the permits, are in place before we proceed."

Doug Firstenberg, principal at StonebridgeCarras, agreed. "The hard part, the financing [with Northwestern], is already done, we formally closed on that in late November. I'm not sure I would even use the term 'delay.' With a partnership of this magnitude, there are so many I's to dot and T's to cross, we just want to get all the documentation straight." StonebridgeCarras originally set a start date of last summer, then pushed that back to January of 2012.

The SK&I-designed Lot 31 project, which will straddle Woodmont Avenue, is a keystone of the ongoing revitalization of Woodmont Triangle. In addition to 40,000 s. f. of retail space, and two residential units - The Flats, 162-unit apartment complex, and the Darcy, an 88-unit condominium building - the project will also incorporate a massive underground parking garage of nearly 1200 spaces. Of these, around 940 are earmarked for public use, with the rest associated with the two residential buildings. Presently, Lots 31 and 31A offer just under 280 parking spaces, so the finished complex will represent an almost fourfold increase.

Growth comes at a price. The existing spaces will be unavailable once construction starts, and the new garage isn't projected to open until two and a half years from groundbreaking. In addition, a stretch of Woodmont below Bethesda Avenue is going to be closed for twenty months as developers correct the distorted 'x' of the intersection, prompting some local businesses to wonder if they can weather an extended period of (perhaps sharply) reduced foot traffic.

Ultimately, those concerns were outweighed by what some see as Bethesda's urgent need for more parking. The zoning in the area requires zero parking for residential projects, a policy designed to steer people towards public parking and public transit.

Short-term, locals will have a number of alternatives once Lot 31 closes. Aside from increasing Circulator bus service, the county is shifting many long-term spaces out of the immediate area, as well as creating over a hundred new short-term spaces. They're also optimizing the parking that already exists. "We're installing a car-counter at Garage 57 [Bethesda-Elm Parking Garage] so people will be able to get the most out of that facility," says Bowring. "Right now you have to drive all the way to the top to see if there are any spaces, and that can be tight. Hopefully if we have the available spaces displayed on the outside for everyone to see, it will encourage people to use it."

In the big picture, Lot 31 is just one of several projects currently underway in downtown Bethesda. Stonebridge is also building a residential tower on the former Trillium site, Bainbridge Bethesda (formerly the Monty) is coming along on schedule, and JBG/Ross are turning 4900 Fairmont Avenue into a residential rental units. And of course, the Purple Line is on the horizon for 2014.

Bethesda, Maryland real estate development news

Monday, January 16, 2012

Skyland Struggles Towards Uncertain Timeline

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With the specter of a Wal-Mart vs. Safeway showdown over a decade-old exclusivity covenant having receded, the District can get back to resolving the many other issues standing in the way of the Skyland redevelopment in Southeast DC, a top priority of Mayor Vincent Gray’s embattled administration. But can Skyland overcome the many hurdles it faces?

Safeway, one of the District’s top private employers (15 stores), and high-profile retail anchor Wal-Mart squared off in November over an agreement Safeway had entered into with the owners of the shopping center, Skyland LLC, to bar certain types of competitors from the property after Safeway relocated to a nearby shopping center. Each side issued bland statements but retained powerful advisors; Safeway hired Maryland lobbyist Bruce Bereano, famously an ex-fraternity brother of Mayor Gray, and Wal-Mart hired David Wilmot, a local dealmaker who co-hosted a fundraiser with Mayor Gray just last month. Fast-forward a couple of days, and the matter was suddenly settled.

"A covenant exists on one lot of the many that comprise the Skyland redevelopment site," says Nimita Shah, Project Manager in the Office of the Deputy Mayor for Planning and Economic Development (DMPED) by way of clarification. “The District is in discussions with Safeway about the removal of the covenant and anticipates a resolution in the upcoming year. However, it is important to note that the Safeway covenant noted above will have no impact on the proposed Wal-Mart that is to be included in the redevelopment, given that its placement on the site is outside of the affected lot.”

Either no one at Safeway or Wal-Mart actually read the covenant before throwing down their respective gauntlets, or the issue was quietly resolved through backroom horsetrading (the very sort of thing that Gray denounced when he pledged to bring transparency to the mayor's office). At any rate, with this issue put to bed, does this mean that Skyland faces a clear runway to approval and groundbreaking? Far from it.

Since first seizing Skyland in 2005 by invoking eminent domain, the District has spent over $12 million on settlements. Three more tenants settled in 2011 – Hong Kong Inn, Hilltop Cleaners, and New York Fried Chicken – leaving perhaps as few as one holdout, though according to the District there are over a dozen tenants are still operating at Skyland. “Fifteen tenants remain in operation at Skyland," says Shah. “The District is in the process of working will all of the remaining tenants to coordinate their relocations over the upcoming year.”

Everyone out by the end of 2012? Count Elaine Mittleman, an attorney who represents several Skyland tenants, among the skeptics. Mittleman contends the eminent domain proceedings have been slipshod and disorganized. “Wild ineptitude,” Mittleman snaps when asked to characterize the District’s handling of Skyland. Mittleman also provided DCMud with extensive correspondence between herself and the District that seems to raise questions about who holds the titles to seized Skyland properties, as well as concerns about the eventual turnover of Skyland to private developers, one of whom is a close associate of Mayor Gray’s, and has done repairs at his home.

Serious questions also remain regarding the project itself. There’s no firm consensus on whether Skyland is in fact a viable site for redevelopment; critics have pointed to the lack of public transportation options (the nearest Metro station, Anacostia, is a mile and a half away) and an already dicey traffic situation. There are also multiple competing projects in Southeast – St. Elizabeths East, Poplar Point, and Kenilworth-Parkside, just to name a few - as well as another Walmart planned nearby, on East Capitol Street. In the face of these doubts, the conventional wisdom is that with millions and years spent and so many promises made – none more than by the present administration - the District can hardly back out now.

Or can it?

People who point to the 2005 Supreme Court ruling that empowered the city of New London to oust intransigent homeowners so they could build a Pfizer plant as proof that Skyland is all but inevitable, overlook the fact that the Pfizer plant was never actually built. The drawn-out process of settling with and vacating tenants, as well as appeals and the administrative labyrinth of state seizure of property, can often outlast the patience of prospective tenants. Before Wal-Mart agreed to anchor Skyland, a similar Target deal fell through. Who's to say Wal-Mart won't walk, if litigation drags on for another year or three? Is Mayor Gray prepared to

Some cite the possibility that the District's resolve on Skyland is, at least in part, opportunistic. If it comes together, it will be a victory for some mayor's scorecard. But if it doesn't, that mayor (like the last three) can still curry favor with the voters of Southeast by telling them he tried. In fact, the prospect of a mayor fighting the good fight on behalf of the city's least-served quadrant, only to be stymied by other forces, is arguably a more valuable asset in a general election than a mere shopping center, however big and shiny. But the Mayor has been personally advancing the cause of Skyland to private businesses that might have a stake in the proposed development.

Elaine Mittleman disagreed with this cynical view of things – with conditions. Mittleman believes that the District sincerely wants Skyland, and wants it badly, but just got in over their heads. “The District courts rubber-stamped everything, basically, and there was never any comprehensive plan, just a back of the envelope thing,” Mittleman says. “It seems like they have just not put in the proper effort. It seems like they just magically thought it would happen.”

For their part, lead developer The Rappaport Companies, who won rights to Skyland way back in 2002, doesn’t seem the least bit perturbed by these latest developments, either stoically patient or just resigned to sticking it out for the long haul.

“The Skyland project is definitely gaining momentum, and the Mayor has made this a priority,” said Sheryl Simeck, Vice President of Marketing and Communications at Rappaport. “But it is still too early in the process for us to be able to supply construction dates," (despite Mayor Gray's prediction it would break ground last year.) "The District continues to work on resolving the outstanding legal issues involving eminent domain. Development cannot start until these last few issues are resolved.” At this time, no one is prepared to say when that will be.

Washington D.C. real estate development news

Tuesday, December 13, 2011

Shops at Dakota Crossing and Costco to Start Now, Open Next Year

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It's official. The District and the developers of the Shops at Dakota Crossing - a forthcoming 42-acre big-box retail destination revolving around Costco - have struck a deal.

On Friday, the development team, facilitated by a $46.5-million construction loan, acquired the Fort Lincoln land from the District. In turn, the District pledged a final $17 million in tax increment financing (TIF) subsidies. The site is now ready for construction to begin on the 430,000-s.f. mall, capping a portion of the city's urban renewal retail redevelopment vision for Fort Lincoln that dates back to the '70s.

Joint developers Trammel Crow Companies, Fort Lincoln New Town Corporation (FLNTC), and CSG Urban Partners (a CBE partner) will commence site work immediately ("any day now" sources say) to prepare for a formal ground breaking - likely in January or February - under general contractor Harvey Cleary.

The approximately $60-million project, with urban planning/architecture by Bignell Watkins Hasser, was also on hold pending environmental approvals, secured about a month ago says Cel Bernardino, VP of Development and Construction for FLNTC. Bernadino adds that despite skeptical press of late, the project still has the interest of several big retailers, and that the loss of Target, which is halting expansion nationwide, is not fatal. In addition to Dakota Crossing, Target at one time was also considering - but abandoned - both Georgetown Park and Skyland.

All incoming retailers will benefit from the $17 million in TIF subsidies from the District, which has supported the development as a neighborhood improvement initiative. Developers expect Costco to be open for business in less than a year - next November - just in time for large-scale, back-your-truck-up holiday shopping.

As for the rest , the Washington City Paper pointed out earlier this fall that it appears that the development is moving forward essentially on spec, after Shoppers Food Warehouse (and pharmacy) and Target pulled out of the site. But Bernardino says that although that lease has not been signed, Shoppers, along with plenty of others, did not back away and continue to eye the site, but that Costco is driving the project. "Costco has always been the big dog."

In all, the plan allows for 26 tenants in 13 buildings at the Shops, but as of now, only 182,060 of the 430,000 s.f. has been claimed by tenants: 154,000 s.f. by Costco and 28,060 s.f. by Marshalls. After Costco's building is delivered late next year, the rest of the development will continue to rise and retailers are expected to be able to settle into spaces by mid-2013.

CBRE has been responsible for leasing retail space at the Shops' site, which the company is marketing as "a strategic location on New York Avenue/Route 50... [with] easy access to an impressive 100,000 vehicles per day." Of these vehicle passersby, 2,500 will be able to swoop into a parking spot at the Shops.

Bounded by New York Avenue NE, South Dakota Avenue and 33rd Place, the location was hotly debated because the site is currently a forested area with wetlands that filter waste and prevent flooding. In order to move forward, the developers agreed to incorporate a new wetland into the site, with the design reviewed and approved by the US Army Corps of Engineers, the EPA, and the District Dept. of the Environment.

Additionally, in April of 2010, the District committed $3 million toward an effort to construct stormwater management ponds that will support the entire 360-acre Fort Lincoln redevelopment area, which includes the $80-million residential portion, The Villages at Dakota Crossing, with 334 townhomes and condominiums. The first of three phases will be underway soon, development of the site (roads, etc.) has already begun. Ryan Homes expects the first phase - construction of 63 townhomes and 11 townhome condominums (2 condos contained in each, for a total of 22 condos) to begin to deliver in 2012. Sales have begun, and already 15 condos have sold.

In the decades since developers of the Shops have been trying to gain ground, players have come and gone, and then come back again. Before Trammel Crow was involved, it was The Peterson Companies, and before The Peterson Companies there was Federal Realty Investment Trust and Trammell Crow. When Peterson Companies bowed out in 2007, Trammell Crow Companies stepped back in.

Washington D.C. real estate development news

Friday, November 18, 2011

GW to Demolish Last of Pennsylvania Avenue Rowhouses

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Gensler to design Pennsylvania Avenue development at Foggy Bottom by Boston Properties
George Washington University plans to demolish a group of historic townhouses along Pennsylvania Avenue, dating back to 1910, to make way for a large office building designed by Gensler.  The townhouses are nearly the last remaining historic real estate fronting Pennsylvania, excepting the Mexican Embassy. Boston Properties develops retail and office on Pennsylvania Avenue, Washington DC, designed by GenslerThe six properties to be demolished from 2134 - 2142 Pennsylvania Ave., include tenants the Froggy Bottom Pub, Panda Cafe, Mehran, and Thai Place. 

The area lies just outside the Foggy Bottom Historic District, and the buildings are not "landmarked" as historic, so no historic review is required. A GW spokesman said "The 2007 Foggy Bottom Campus Plan included a historic preservation plan... During that process, the properties were examined and were determined not be historically significant." Convenient.  GW's idea is to create a sizable development akin to the recently completed Square 54 - located just west, at 2200 Pennsylvania Avenue - a $250-million, 2.6-acre development of GW-owned land developed by Boston Properties

For this project, GW would create a similar stream of revenue by again partnering with a third-party real estate developer responsible for developing, leasing and managing the building, creating income for GW through office and/or retail leases. GW media relations affirmed, "The future space will be commercial property with the potential for retail at street level along Pennsylvania Avenue. While similar in type of redevelopment, it will be on a much smaller scale than The Avenue/[Square 54]." The large building at 2100 Pennsylvania Avenue, now occupied by Kaiser Permanente, would be partially demolished, with the east portion left intact, and the west portion expunged. Kaiser intends to vacate the building in October of 2012. 

The glassy design by Gensler will be 11 stories and 130' tall, with an additional 3 floors below grade for 178 parking spaces, resulting in a total of 255,550 s.f., and will target LEED Gold upon completion. The University anticipates filing an application with the Zoning Commission early next year in order to modify what was approved for the site in the overarching Planned Unit Development "2007 Foggy Bottom Campus Plan" and increase by 40' in height and 45,000 s.f. the remaining building at 2100 Pennsylvania Avenue. An initial presentation of the project was given to ANC 2A this past Wednesday, and a second trip to the ANC should take place early next year. A Zoning hearing could come in the summer of 2012. The university aims to begin construction in early 2014.

Washington D.C. real estate development news

Tuesday, September 06, 2011

Eisenhower Memorial Metal Tapestries on Display

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In order to clearly demonstrate the artistry of the forthcoming Dwight D. Eisenhower Memorial designed by Frank Gehry, the commission responsible for the memorial displayed two good-sized samples, showcasing two different production methods for bringing heavy metal tapestries to life.

The samples were on display at the site last week, and will return at the site - on Independence Avenue between 4th and 6th Streets, SW - next week, remaining up from the 12th to the 16th, during which time the Commission of Fine Arts will scrutinize the materials in question.





The Eisenhower Memorial Commission will meet with the National Capital Planning Commission for an informal design review on October 6th in advance of seeking preliminary design approval - from the NCPC - on December 1st.

Target date for delivery of the Eisenhower memorial is Memorial Day 2015.

Washington D.C. real estate development news

Thursday, September 01, 2011

Georgetown Park Goes Big Box

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Georgetown Park, retail, big box, leasing, commercial property

A recent effort to breathe life into Georgetown's only retail mall, The Shops at Georgetown Park at 3222 M Street, NW, has had the wind knocked out of it. The Georgetown Angels, a trio of ladies with boutiques at the mall and big voices for locally owned business, had banded together last year in a shared cause: to enliven the mall, increase exposure, and boost foot traffic off of M Street. But now, the mall is garnering some attention of a different sort, not what the Angels (think Charlie's, not Guardian) had in mind.

With the pending closure of Barnes & Noble down the street (the massive bookseller did not renew its recently expired lease) murmurs over the future of the mall (and inklings that H&M will move from the mall and take over B&N's corner spot) increased in volume, and are gaining validity now that several mall tenants have not only been asked to leave by the end of the year, but several packed up shop just yesterday.

Although property owner and operator, Vornado Trust Realty, would not confirm an 80,000-s.f. lease with Target, officials from the giant retailer have been exploring the viability of a large retail site with concerns about the traffic-choked location.

It's thought that Target will likely take up the basement (now a sorry food court and a DMV branch) and possibly the ground floor. A deal with Bloomingdales, for around 80,000 s.f., seems to have also been revived after initial talks fell through in 2008, although this is unconfirmed.

Along with a drastically different type of retailer and fewer retailers overall, Keith Sellars of WDCEP sees the potential for new restaurants to front the C&O Canal side of the property.  Retail tenant occupancy at Georgetown Park has fallen since 2009, and Kassie Rempel, DC native and owner/founder of mall-tenant SimplySoles, says of the change, "It's unfortunate, but I can't say it's a surprise." Rempel, one-third of the Angels, will be in the mall until the end of the year, and although considering a few relocation options, moving to the mezzanine level of the mall, as offered by Vornado, is not one of them.

Another Angel, Heidi Kallet, owner/founder of The Dandelion Patch, confirms she too is leaving Georgetown Park but says her shop "will stay in Georgetown." Finishing out the trio of Georgetown retailers, Stephanie Fornash Kennedy, owner/founder of the eponymous, eight-year mall tenant Fornash, has also received her official notice to vacate by year's end. Rempel says it's clear that Vornado, "is clearing out the first and second floors."

There has been talk of redeveloping the Georgetown Park mall since the late '90s; most notably when Herb Miller (of Western Development Corp.) and Anthony Lanier (of EastBanc, Inc.) entered into an agreement, in 1998, to pursue a joint venture to develop the property.

However, the mall, which opened in 1981 as a main component of the $200-million mixed use development by Western Development, was cruising along in the '90s, and into the early 2000s, and owner at the time Georgetown Park Associates (GPA) - which obtained the deed from Western Development in 1989 - wasn't looking to sell until 2006.

In March of 2006, GPA's sale of the property commanded a hearty $84 million, from Miller. Lanier sued Miller for breach of the 1998 agreement. Unease had been brewing between the two for a few years, after disagreeing on how to interpret an amendment, made in 2001, to the joint-venture agreement; Miller asserted that the 1998 agreement was void if not acted on by May 31st 2002.

Either way, the Georgetown Park deed was finalized on March 1st 2007.

In response to Lanier's lawsuit, as reported by the Washington Post in April of 2010, "Western sued EastBanc and Lanier personally for more than $50 million in damages, citing a malicious legal filing and other causes."

Though it was reported that Western defaulted in excess of $70 million owed to lender Capmark Financial Group, the foreclosure was called off in May, and a Vornado led group called AG Georgetown Park I LLC obtained the property from Capmark Finance/GP Partners LLC on July 9th 2010 for $30.8 million; significantly less ($54 million less) than Miller paid four years before.

Now, with Vornado a year into its ownership of the property, the site holds a mall that is a 30-year-old shell of its former self, and rapidly emptying. Long gone are the days when it drew local businesses, Georgetowners, out-of-towners and the like from M Street.

Washington D.C. commercial real estate news

Tuesday, June 21, 2011

From Native Dancer to Native Son: Restoring Sagamore Farm

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By Beth Herman If you listen quietly and long enough to sounds in the mist at Glyndon, Maryland's Sagamore Farm, Native Dancer's hoof beats will join up with your heartbeat. Shining star of the (now) 530-acre horse breeding farm established in 1925 by Bromo-Seltzer inventor Isaac Emerson, the fabled "Galloping Gray Ghost" stands tall among the greatest racehorses of the 20th century, winning 21 out of 22 races, as well as a place in successive Sagamore owner Alfred P. Vanderbilt II’s own heart. The stoic, "unsentimental” scion of industry was reportedly never quite the same after his beloved horse’s death in 1967. Before its sale to entrepreneur James Ward in 1986, Sagamore Farm, which had been a 21st birthday gift to Vanderbilt from his mother (Emerson’s daughter) in 1933, would produce winners such as Discovery, Bed o’Roses and Native Dancer, and employ many dozens of grooms, trainers, blacksmiths, hot-walkers, domestic personnel and the like. When Maryland’s horse racing industry succumbed to revised federal tax laws and recession, Ward’s decision to convert the property to home sites was rejected by the community, so he commissioned renowned equestrian architects Blackburn Architects, P.C. to turn a portion of the farm into a private home/equestrian center for his wife. Several old barns were leased to thoroughbred breeding and training entities. But in 2007, smitten by the same dreams that were said to have seduced Alfred P. Vanderbilt II, Maryland native son and founder/CEO of Under Armour apparel Kevin Plank bought the farm, so to speak, with a goal to help revitalize the state’s racing industry. Plank’s mandate in also retaining John Blackburn, and project manager Daniel Blair, was to transform what had become a largely decaying historical landmark into a peerless 21st century breeding and training operation—without sacrificing its provenance. Loading in “Kevin had an outline and series of points—a program of what he wanted to do—how he wanted to get there,” Blackburn said, noting the former University of Maryland football team captain clearly wanted to return Sagamore Farm to its original glory. “His goals were to restore the farm, to build on that history and to develop his own thoroughbred breeding operation that would, at some point, produce a Triple Crown winner.” Embarking on a 10-to 15-year master plan, an existing 20-stall broodmare barn and 16-stall foaling barn comprised an early phase of the renovation with methods and materials emblematic of Blackburn Architects’ “health and safety of the horses first” philosophy. Known for their prodigious use of natural light and ventilation— the latter a component in a passive energy system, as well incorporating aerodynamic principles and recycled materials into more than 150 horse farms over 25 years, Blackburn and Blair applied these tenets to produce Sagamore Farm barns that entirely supported the needs of their diverse equine residents, but without altering the exterior aesthetic of the existing buildings. Removing typically large haylofts from each structure, opening up large but enclosed stalls and adding skylights and Dutch doors along the exterior to court natural ventilation, both the broodmare and foaling barns instantly went from “dark to bright, like night and day” Blackburn said, especially important for the broodmares. “You want as much light as possible, as early in the season as possible for them,” Blackburn explained, “so the horse cycles naturally, without the use of artificial light.” Citing temperatures that parallel each other both inside and outside the barn as key to the horses’ health, Blackburn also took measures to ensure smooth transitions. And using the sun’s heat from the rooftop and skylight, and the horse’s own heat and humidity (horses give off a great deal of moisture), the architect worked to bring air in low and exhaust it out high. This creates ventilation in the barn so it’s constantly venting whether it’s winter or summer,” Blackburn said. Additionally, a fan is typically placed high on a wall, directed into only one area of a stall, enabling the horse to move in and out of the breeze as needed. “Going back to the health and safety of the horse, when driving the design of a barn, you have to duplicate nature—where they can control their environment,” Blackburn explained. “As soon as you put horses in barns they lose that control, so the barn now needs to provide them those choices.” A sustainable tack Where humans and sustainability measures are concerned, rubber paver flooring, recycled steel in stall systems, recycled wood finishes— from the original barn— in flooring, cabinets and desks, and preservation of an existing exterior concrete block frame and roof framing, as well as insulated barn offices to reduce energy waste, were part of the design. With the inception of Sagamore Farm’s most recent phase, and particularly renovation of a 24-stall yearling barn which began on February 1, smaller 12x12 stalls will accommodate the younger horses, with sustainable materials from the two previous barns applied here, along with elements that include a signature Blackburn barns passive energy system also seen in the previous two barns. Speaking to various additional projects on the property, Blackburn said Sagamore Farm’s three quarters-of-a-mile training track was completely redone with footing developed by Plank himself and Under Armour, something separate from the architects’ work. According to Blackburn, the most interesting structure on the venue is the 90-stall oval-shaped training barn with an interior quarter-mile track. “It’s a very unique barn, with maybe only one other similar to it in the entire state,” Blackburn said. Acknowledging that Plank probably won’t need 90 stalls, the team is exploring how best to redesign the behemoth building. Another existing structure that fronts the track, and has been gutted, is a former dormitory where employees were housed and fed, along with an old blacksmith shop currently used for storage. A stallion barn, home to Native Dancer, also stands tall but devoid of life and purpose, with possibilities that include transforming it into a museum to honor Sagamore Farm’s most eminent equines. “Their use is a moving target,” Blackburn said of these and a host of other idle, existing buildings, including guest and reception spaces that dot the property. “As they develop the farm and breeding stock and get into more operational aspects, their needs may change.” While Sagamore Farm has yet to produce a Derby, Preakness or Belmont Stakes winner (Native Dancer’s great-great-great grandson Monzon ran most recently at Belmont), on November 5, 2010, its Shared Account, a 46-1 shot, won the $2 million Breeders Cup Filly and Mare Turf, defeating the celebrated Midday. Plank is admittedly taking his time building breeding stock, and a racing reputation, having crossed his first professional finish line as the creator of Under Armour apparel before he turned 30. And even with a quarter-century of specialty barns in his personal paddock, Blackburn, like Plank, is just getting started. 

Photos courtesy Cesar Lujan

Tuesday, April 26, 2011

The Shops at Dakota Crossing to Break Ground in May

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May will mark the groundbreaking for the big box shopping center - The Shops at Dakota Crossing - on New York Avenue and South Dakota Avenue, NE. The $52 million dollar project on 42 acres is a joint project between Fort Lincoln New Town Corporation, CSG Urban Partners, and Trammel Crow Washington DC retail for lease, Dakota Crossing, restaurant for leaseCompany that will house 430,000 s.f. of buildings and include Costco, Target, Marshalls, and Shoppers Food Warehouse.

Costco is scheduled for an August 2012 opening, with the remainder of retailers to open in March 2013.

The pursuit of retailers at Dakota Crossing has been at least a decade in the making with Costco the lead in committing to the site. The plans had been hindered by two obstacles, the primary one being the controversy that ensued over paving the current wetland that filters waste and prevents flooding; Ft. Lincoln New Town Corp. has responded by creating new wetlands reviewed by the US Army Corp of Engineers, the EPA and DC DOE. The second hurdle had been the delay in inspiring additional retailers to sign on to the location.

CBRE retail for leaseThe shops at Dakota Crossing are part of an extensive development of the area that had started in the 70's under the city's Urban Renewal Plan. The development includes 1370 residential units, including condos and rentals that were built during the 1980’s and 1990’s; the 127-unit Wesley House senior apartments opened early last summer; and 209 town homes were completed in July 2010 that have sold out at an average listing price of $460,000Shops at Dakota Crossing, retail for lease, CSG Urban Partners, Trammell Crow.

Still in the works are the Villages at Dakota Crossing situated at Ft. Lincoln Drive and 33rd Street N.E., an $80 M, 334 town house and condo project for which the January ground breaking has been delayed, as well as the Ft. Lincoln multi-family development of 352 units on target to break ground in 2012. Townhouse construction on the 54 City Homes at Fort Lincoln started this past January.

Despite Fort Lincoln's stated commitment to the environment regarding the retail project in particular - with cisterns, green roofs, green walls, and other low-impact development measures - dismay over the 2000-plus surface parking spaces has fueleWashington DC retail for leased the ire of community groups and residents. On its website Anacostia Riverkeepers wrote, "The developer has proposed ways to mitigate storm water, but. . . [we do not] feel the proposed plan goes far enough. Anacostia Riverkeeper is not opposed to the project per se but believes strongly the proposal should be redesigned to protect the existing wetlands and control stormwater pollution in the Anacostia Watershed."Washington, DC Commercial Real Estate Development News

Thursday, April 14, 2011

Mayor Predicts Lift Off for Skyland

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D.C. Mayor Vincent Gray predicted on Tuesday that the contentious development of the Skyland shopping center will be underway as early as September. News of the impending construction caught its developers and occupants by surprise, but both seemed to take announcement of the project's birth in stride.The foundering Southeast D.C. shopping center has been in the government's crosshairs for more than a decade, with Washington D.C. planners dreaming of Skyland Town Center, an economic nativity centered around big box retail and new mixed-use, 18 acre community. Planning for the site began more than 20 years ago, and rather than buy out the owners individually, in 2005 the city began eminent domain proceedings against its many owners, and has since claimed title to the property with the intent of handing it over to developers to redo. But jettisoned owners, backed by property rights advocates, have fought tenaciously to reclaim their titles they say were wrongly seized.

Meanwhile, erstwhile developers Rappaport Companies and William C. Smith & Co. et al have continued to promote the expected vitality from a redesigned building despite the lapse of time and lack of forward motion. For several years promoters and the District government maintained that Target was on board, anchoring the project, lubricating capital, and ensuring success. With Target now officially out, Walmart has become the dream (potential) anchor. But with a thicket of legal challenges, no signed tenants, financing uncertain and lack of a land agreement with the District, the project seems much the same as it did 5 years ago, excepting approval of plans by the Zoning Commission last summer.

Despite the Mayor's confident prediction, the developers are sanguine, noting that much work remains even if some demolition takes place on the Mayor's schedule. "There are still eminent domain issues" says Sheryl Simeck, Vice President of Marketing and Communications for Rappaport. "The next step is for the District of Columbia to own all of those parcels. We've taken it as far as we can." Lawyer Elaine Mittleman, representing several owner-tenants, agrees, and says the transfers of title were not only unconstitutional but ineffective, making demolition unthinkable. Mittleman's suits have been denied by the courts, but other suits continue to work their way through the legal dockets, and Mittleman points to a variety of ailments to the District's claim to clear title.

Still, the government might win by attrition, outliving tenants slowly driven out by uncertainty and by a neglected shopping center that becomes ever more decayed. Some tenants have paid rent to the District government, others have not done so for years. "It's a tragedy" says Mittleman. "There's no funding, no agreement, no title, no tenants. It's the opposite of economic development." Mittleman says the government has stonewalled her FOIA requests and has failed to provide answers to many procedural requests, complicating representation of the owners. Still, having seen eviction deadlines come and go, tenants remain more frustrated than fearful, and yet none seem to doubt the ultimate resolve of the government to see the project through.

The development team also includes Harrison Malone Development LLC, the Marshall Heights Community Development Organization (MHCDO) and the Washington East Foundation, Silver Spring based architects Torti Gallas, and Washington D.C. based WCS Construction.

Washington D.C. real estate development news
 

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