Today in Pictures - Skyland

While the District government struggles to rid Skyland of its owners and tenants in order to make way for a more contemporary shopping destination by turning it over to developer Rappaport, the outdated shopping center looks ever more dilapidated and forlorn.














Washington D.C. real estate development news

Skyland Struggles Towards Uncertain Timeline

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

follow through on his threat to block Wal-Mart's four other stores in the District if they don't put one in Skyland?

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

Your Next Place

By Franklin Schneider

Mmm mmm! There's nothing like the smell of a newly-constructed property! You know what it smells like? Nothing. Absolutely nothing. No previous tenants cooking cured meats with the windows closed, no smokers, no pet traces "covered up" with a dousing of carpet perfume. Nothing. As someone who lives in an ancient never-renovated apartment that smells like a cross between a hot barn and a flooded carpet warehouse, this is something I can really appreciate.

Of course, absence of odor (as wonderful as I'll maintain that is) is the least of this U street penthouse's appeal. There's a whole lot more to like, from the open riser staircase in the living room, to the massive bay windows that floods the loft with light, to the ridiculously spacious walk-in closet (with a window! I bet even Kanye's walk-in closet doesn't have a window), to the deep red cherry floors throughout.

There's a gourmet kitchen with huge stone countertops and an awesome floating glass breakfast bar. Also, it's a two-level unit, so upstairs you have the bedrooms - towards the front is the master suite (location of the remarked-upon walk-in with window), with an beautiful master bath that features a double vanity and custom-made glass shower. Towards the rear is the second bedroom which, although slightly smaller, has a balcony from which you can see U Street. In most places, the non-master-suite bedroom is so clearly inferior that if I lived there in the master suite, I would worry that the person who lived in the smaller bedroom would eventually grow to hate me. Not so in this place - you may have the better walk-in, but they get a balcony. If they grow to hate you, it's for entirely personality-related reasons.

Just two blocks from the Green Line, which makes for a painless commute, and only a stone's throw from U Street, which has everything you could possibly want out of life, as long as that means ethiopian food, frozen yogurt, bars, and pay-as-you-go cellphones.

1912 8th Street NW, Unit D
2 Bedrooms, 2.5 Baths
$599,900

Washington D.C. real estate news

Today in Pictures - Union Station

Union Station's Main Hall is getting a makeover, as is obvious to anyone passing through this week. The work doesn't relate to the upcoming reconfiguration of the transportation hub; but is a repair of damage caused by last August's 5.8 magnitude earthquake that caused plaster to fall from the ceiling. Universal Builders Supply, which built the scaffolding the embraced the Washington Monument, has assembled the movable scaffold to support the repair work that will last nearly a year while allowing tens of thousands of people to pass underneath daily.













Washington D.C. real estate development news. Photos by Rey Lopez.

Green Line "Corridor" Growth Setting The Pace For The Region: Study

(Corrects to show Branch Avenue Metro Station in Prince Georges County)

That well-heeled twenty and thirty-somethings are moving into Columbia Heights and Washington Navy Yard isn't news, but if a recent study is true, namely that growth along the Washington's Green Line "Corridor," as it were, is outpacing that of the Ballston-Arlington Corridor and that of the Red Line, well, then.

Certainly, the most well-off of Washingtonians travel the Red Line north to Shady Grove, or the Orange Line to Arlington, right?

Wrong, says Shyam Kannan of Robert Charles Lesser & Co. who told the Capitol Riverfront BID yesterday at their annual meeting that over the past ten years, the highest growth in six-figure riders and those key demographic 18-34 year olds are along the Green Line corridor between Georgia Avenue/Petworth and the Navy Yard, outpacing the suburban-hip Rosslyn-Balston corridor and its Green line-busting hip-hop music scene.

In fact, according to the study, the average income for new households along 10-stations in the Green Line "Corridor" is now nearly $83,000. Moreover, nearly 3,500 18-34 year-olds moved into the Green Line "Corridor" between 2000 and 2010, more than the 3,400 added in Rosslyn-Ballston and the 2,300 or so added along the Red Line in Northwest.

The study was paid for by the Capitol Riverfront BID, which has a bit of self-interest in promoting the Navy Yard as a destination to work live and play along the Green Line given that it lobbied WMATA to change Navy Yard's name to Navy Yard/Capitol Riverfront.

And the RCLCO study conveniently slices off the more moderate income ends of the Green Line --Anacostia as well as Greenbelt and Branch Avenue in PG County, which might skew the economics that the study's benefactors want to portray. Still, it shows that the Green Line, which first opened in 1991, is well on its way to help produce the type of dense, transit-oriented-development in the heart of Washington D.C.

Washington D.C. real estate redevelopment news.

Maryland Avenue SW Corridor Redevelopment Plan Unveiled

During that netherweek between Christmas and New Year's, when most of us were still in an eggnog-induced haze, the DC Office of Planning released a draft report on the Maryland Avenue SW Plan, which is part of NCPC's Southwest Ecodistrict Initiative, a concept introduced last May. If the suggestions in this report are adopted – and there's little reason to believe they won't - the consequences for Southwest would be drastic and far-reaching.

Development-wise, the General Services Administration (GSA) is considering conveying (selling off) four federally-owned parcels along a proposed rebuilt Maryland Avenue, with an eye towards private redevelopment as mixed-use projects. This is pricey territory, with proximity to the Mall, the Capitol, monuments, the forthcoming Southwest waterfront redevelopment. Currently these parcels are all monolithic office buildings, like much of the area - a reality this report aims to dramatically alter. The report raises the possibility of rezoning the area to accommodate high-density residential structures - though there are obstacles to the plan. For starters, one of the four parcels (Parcel 1) is crowded by the USDA Cotton Annex, which for right now at least is not being considered for conveyance. According to the report, it's going to be hard to reach the desired density (the study suggested a minimum of a thousand residential units) on these parcels without them “being aggregated with adjacent land.” - perhaps this is a hint at future conveyances.

The main problem with the Maryland Avenue corridor, other than the aforementioned homogeneity and its lunar-like desolation post 6pm, is that Maryland Avenue doesn't actually exist for a good five blocks between 7th and 12th Streets. Clearly, any revitalization of the area will require the rebuilding of Maryland Avenue as priority one. The report presents three possible avenues towards reestablishing the avenue: option one is to just rebuild it with a median, and rebuild 9th Street to connect Independence, Maryland, and D Street. Option two would rebuild it only between 10th and 12th, and convert the rest to a park. The third proposes a smaller, pedestrian- and bike-friendly center roadway with an adjacent public square, shifting the existing railyard south.

The report seems to lean in favor of the second and third options – surveys taken of area residents and workers showed an overwhelming majority specified “parks and open spaces” as their number one preference in regards to improving the area. The report also lays out a strategy of using public spaces to draw pedestrian traffic and “establish an identity” for the area, which will (theoretically) lead to “demand for residential,” which will in turn “create population that attracts retail.” And reading the report – which is detailed, well-written, and ambitious – you get the impression it just might be that easy.

The plan also calls for a long-overdue expansion of the L'Enfant metro and commuter rail stations, and wholesale improvements of Reservation 113, the greenspace where Maryland and Virginia Avenues intersect, into a “dynamic urban park” as neighborhood centerpiece. The report estimates this project would cost around $430 million, a cost defrayed by the sale of the aforementioned federally-held parcels. Other funding sources, according to the report, could include TIF or PILOT funds, developer/railroad contributions, and various federal grants.

The western side of the Maryland Avenue corridor roughly abuts the soon-to-be-revitalized Southwest Waterfront, which is now revving into high gear and the Eisenhower Memorial is slated for 2015 right next door, all of which could very well create a domino effect, perhaps spurring the much-discussed creation of a "second downtown."

Check out the full report . The public can also offer feedback on the full report, and comment until February 3.

Washington D.C. real estate development news

Your Next Place

By Franklin Schneider

I liked this house so much it made me want to go to law school. After five minutes inside, I was like, "whatever it takes, I need to get my hands on a million and a half dollars, asap," and law school was the quickest way I could figure out to do that. I also considered drug dealing and bankrobbing, but I figured that with law school there's much less chance of me being shot in the face.

But man, this place. A beautiful semi-detached townhouse, it has four fully-furnished levels. Yeah, bummer, four levels is a lot of walking up and down, maybe too much. OH WAIT - it has an elevator!! The lower level family room is incredibly wide and spacious, and opens out onto the lush garden patio. There's a chef's kitchen with everything you need to make an incredible multicourse gourmet meal, which let's be honest you'll never do - but you could, technically. The master suite has a fireplace and is very masterful indeed, with a wonderful master bath (check out the tub) and a private balcony from which you can see Georgetown AND Rosslyn. I didn't even know that was possible. After that, and the elevator, I don't think anything would've surprised me about this house. "And here we have the zero gravity room, which is powered by elfin sorcery." I wouldn't even have blinked.

There's also a sauna and a wet bar (two things that were meant to be together) and a garage and driveway. The house also overlooks Book Hill Park, which is an immaculately landscaped picturesque and little-known park through which I walked after the open house. As I passed a mom and her two kids, I saw her give me a look like "what's this longhaired degenerate doing in my park?" and I started to tell her how I'd just decided to attend law school and become a respectable citizen and enrich myself while also enriching society, but by that time I'd already decided to just buy a Powerball ticket instead. America!

3242 Reservoir Road NW
3 Bedrooms, 4.5 Baths
$1,645,000

Washington D.C. real estate news

Founders Square DARPA Building Complete, Residential Tower Next

The first stage of Ballston mixed-use mega-project Founders Square, a 13-story 350,000- square-foot office building at 675 North Randolph, is now complete, with the first (and only) tenant, the Defense Advanced Research Projects Agency (DARPA), now taking possession of the property. Developer The Shooshan Company now has a clear runway to break ground on the next phase of the five-building, 1.2 million-square-foot complex, the 17-story, 257-unit residential building at 4000 Wilson Boulevard.

“We’re in the very final stages of completion of 675 North Randolph, the new DARPA headquarters,” said Kevin Shooshan, Director of Leasing at the Shooshan Company. “It’s basically complete. [DARPA] is in the process of accepting the building, and transferring over floor by floor, a process which will go on the next few months, probably into the second quarter of 2012.”

DARPA, a secretive federal intelligence and research agency that, according to some reports, invented everything from the internet to GPS, was formerly headquartered down the road on Fairfax Drive in Virginia Square, and almost left the state on the recommendation of the Base Realignment and Closure Commission in 2005. But state representatives and two consecutive governors used a $10 million grant to convince the federal agency to stay in the area, pointing to the 800 jobs (including contractors) provided and $33 million dollars in city and state taxes paid by the agency each year. DARPA is paying $14.7 million a year on their lease.

The new DARPA headquarters, which is certified LEED Gold, is also the first office building in the area to meet the Department of Defense’s Level IV security standards, and will incorporate a secure parking facility and an 82-foot secured perimeter, and is a surrounded by a sizeable lawn that segregates it from the other buildings in Founders Square.

Now, says Shooshan, the focus moves to the residential building at 4000 Wilson Blvd. “Two hundred fifty seven units, seventeen stories, with construction set to begin in the first quarter of next year, and finishing in the first quarter of 2013,” says Shooshan. “The site plan has been approved for over a year now. Permits are lined up and we're going to pull them in a matter of weeks."

The 1.2 million square foot Founders Square project, designed by RTKL Associates, is also slated to include a 183-room Marriott Residence Inn at 650 North Quincy, and a 420,000-square-foot office building at 4040 Wilson Blvd.

Arlington, Virginia real estate development news