Developer To Break Ground on a $70m Development in PG County

Dawn Limited Partnership has announced it is ready to break ground on a $70 million development project in Prince George’s county. Located near the Addison Road Metro Station, plans for the project include "luxury" condominiums, retail and restaurant space. The site is part of Prince George’s County Addison Road Metro Town Center Development Plan. (and for those of you who are desperate for yet one more acronym, try: PGCARMTCDP…for those of you were English majors: think of it as a pop grammar quiz).

Jack Johnson, Prince George’s county Executive, called the project a winning investment for the people of PG County and cited it as an example of "smart growth" in the Capitol Heights community because of the link between the condominium-based development and the Metro system.

"Transit-oriented development," said Johnson, will provide easy access to Metro lines, retail and dining, "right where people live."

The ICON condominiums will be located at the intersection of Addison Road and Central Avenue, at the Addison Road Metro Station. The project consists of 400,000 square feet of residential, retail and commercial property, including 170 "luxury" condominium units, 25,000 square feet of commercial space, fitness center, business and media centers, a recreation lounge, and a roof-top swimming pool and picnic areas. Construction of the condominiums is expected to be completed by Summer 2008.

Proponents of Smart Growth view projects like the ICON Condominiums as beneficial to the community. These multi-use developments reduce congestion in and on the infrastructure by connecting housing to Metro stations which can reduce the amount of automobile traffic on freeways.

Canyon Ranch Living Project in Bethesda on Hold

The Canyon Ranch concept may have hit a snag in its march into Maryland. A combination of increased mortgage rates, and increased construction costs have caused the $1 billion dollar project in Bethesda to be put on hold for 30 days.

But is there more to it? Canyon Ranch Living aims to provide a kind of hermetically sealed environment in which residents live in condominiums, above dietetically-correct restaurants and health spas.

As the company webpage says about its on-hold Maryland project: "Imagine a spectacular home that’s also an experience. At Canyon Ranch Living – Bethesda, everything comes together to bring out the best in you – the all-healthy environment of renowned Canyon Ranch, luxuries at every turn, and the nation’s finest urban village."

In other words – imagine the experience of what Canyon Ranch calls an "urban village" - right off of I-270 and Old Georgetown Road on 53 acres owned by the Camalier family, one of the largest private development companies in the region.

Imagine feeling just like you really do live in a city; without ever having to bother with actually living in a city.

As one analyst, familiar with the real estate market on the east coast put it: "This isn’t California or Florida; status in the DC area is driven by your connection to the government or wonky group, not really where or how well you live. There is a market for holistic living as a social status symbol – it just isn’t the DC region."

The Canyon Ranch Project is part of a partnership arrangement between Canyon Ranch and the Penrose Group, of Tysons Corner. Canyon Ranch would receive up front payments and management fees to run the development.

Jan McIntire, Senior Director of Corporate Communications for Canyon Ranch has a different view and says the feedback they’ve received from their guests confirms a viable market in the Bethesda area.

"Knowledge of what our guests who live in and around Bethesda want and expect from Canyon Ranch Living makes us feel confident we’re on the right track."

That view is supported by a veteran real estate agent of the DC-area development boom who sees the Canyon Ranch project as a potential success based on the demographics of the area, but possibly a victim of rising costs in construction and the rise in mortgage rates.

"It’s a successful model," said the agent, "there are a lot of people who do want that feeling of being in an urban environment but without the hassle and they want the amenities; the spas, the holistic approach, the restaurants."

JBG Puts Ballston Spire Project on Hold

In early August, JBG Companies announced that it has decided to put "on hold" its plan to build a 23-story building on top of the metro’s Ballston-Marymount University Station, and is actively considering alternate possibilities for the site. The Spire project (formerly known as the Fairmont) was to replace the soon-to-be-torn-down INS building at the corner of N. Fairfax Drive and N. Vermont Street, and was supposed to be the last piece of JBG’s Arlington Gateway project, which also contains a office/retail building (completed in 2005), the 411-condo unit Continental (2003), and the Westin Hotel (2006). The Spire was to contain 237 condo units and 9,200 sf of first floor retail. As part of JBG’s deal with the county, the company agreed to pay $11 million towards the estimated $50 million cost for construction of an underground passageway for the new western entrance to the metro station – what effect this delay will have on construction of the entrance is not yet known, though the county has indicated it has no plans to renegotiate with JBG on this point. In the meantime, JBG officials are contemplating turning the Spire into apartment rentals, and saving the option of converting them to condos at a future date.

Mayfair Mansion Development

Mayfair Mansion, the former home of Supreme Court Justice Thurgood Marshal, is being renovated. The building, constructed in 1946, in the Colonial Revival Style, occupies the area once used for the Benning Race Track. The Mayfair was the project of Elder Lightfoot Solomon Michaux, who wins - hands down - the contest for most interesting name for anyone involved in the field of development in Washington DC. The building was designed by famed local architect, Samuel I. Cassell. Cassell was the architect at Howard University and designed many of the buildings on the campus. The Mayfair has 569 housing units and was declared a city historical landmark. It was one of the first buildings to be designated to provide subsidized housing in the Washington DC. Preservation and Development Corp. and Marshall Heights Community Development Organization purchased Mayfair Mansions in a bid to preserve affordable housing in the District. Tenants of the apartment complex in Ward 7 picked the two nonprofit organizations to buy and redo the complex last year. The D.C. Department of Housing and Community Development provided a $24 million loan to fund the purchase. The proposed plans for the complex include maintaining 409 units in the affordable rental pool and converting 160 units to affordable condominiums. Renovations are scheduled to start early next year.

In The Zone: DC’s Inclusionary Zoning Implementation Act of 2006 Addresses Moderate and Low-Income Housing

The Washington DC Office of Planning has postponed the posting of its Final Ruling for the Inclusionary Zoning Implementation Act until August 25, 2006.

However, a spokesperson for the office has confirmed that the version currently available on its Web site will match the Final Ruling expected for the 25th. The Final Ruling is a controversial rule stipulating that developers of new housing include units for rent or sale at below-market rates to both moderate-income and low-income individuals and families. The Commission has not yet determined which areas of DC will be covered by the Act. The mapping of areas to be covered by the IZ Act is still being determined, meanwhile permits for development projects will use the existing rules and regulations.

Thirty six areas are under consideration for the IZ; among the factors being reviewed are area density as well as types of construction methods used by developers.

In its posting, the Commission acknowledged concerns by members of the development community that mandatory IZ could hamper or even destroy the District’s housing boom, and in response called the boom a "relatively short-lived phenomenon," that could fizzle as quickly as it began. The Commission’s main rationale was that while the future of residential development was not predictable, the need for "workforce housing" must be addressed immediately.

The mapping of the District for establishing which areas will fall under the IZ is scheduled for the beginning of October, 2006.

DC Office of Planning Final Ruling

DC Waterfront Redevelopment Plows Full Speed Ahead

The Anacostia Waterfront Corporation (AWC) has reached the final round of its Survivor competition and selected two teams out of five original bids for the next phase of the waterfront project. The two teams are, Madison/KSI Waterfront Partners and PN Hoffman, Streuver Brothers Eccles and Rouse. While neither team is known for its Brando impersonations, both are considered experienced in waterfront development. Keeping the real estate and development world in agonizing suspense, the AWC expects to make an announcement regarding the finalist in the Fall of 2006. The criteria used to select the two finalists included, qualifications and experience, vision, development approach, implementing strategy, financial framework, and, (apparently because of a pressing need for yet one more acronym) LSDBEs – Local Small & Disadvantaged Business Enterprises. The AWC expects to develop the 47 acres of land by selling exclusive rights to one of the firms which will create an area that enhances the community, provided business opportunities for small, local disadvantaged companies, and generates tax revenue for the city. Elia Kazan could not be reached for comment. (You youngsters out there can Google that one.)

In Potomac Yard, Developers to the Rescue

When city planners for Potomac Yard found that public works projects were needed, they did what city planners across the country are increasingly doing: They turned to the developer to provide city services.

Begun in 1999, the project has gone through several phases including a plan by the late Jack Kent Cooke to build a new stadium for the Washington Redskins; a plan defeated by a coalition of neighborhood groups. The current plan calls for development of 165 acres with 1.9 million square feet of office space, 135,000 square feet of retail space in addition to the 600,000 square feet already in use at the Yard, and 1700 units of housing.

Justin Wilson, former President of the Del Ray Citizens’ Association, is optimistic about the on-going development project at the Potomac Yard.

Wilson was one of many in the Del Ray community who were shocked to learn that there was a plan to relocate the local fire station from Windsor Avenue to the Potomac Yard – and Wilson and the Association insisted on a discussion with both the developers and the City. "The city got caught behind the eight-ball,” said Wilson, “But they’ve caught up with the issues facing the community and the development companies are responding to our needs."

Enter the site’s developers, Pulte Homes, Inc. and Centex, which agreed to finance the relocation of the firehouse and to pay for new equipment, according to Wilson. The master plan further calls for the developers to straighten Route 1 and rebuild the interchange and overpass. As in many communities, the developers have already agreed to subsidize 60 units of low-income housing, providing communities a fast, free way to provide affordable housing, an issue that long vexed planners in recent decades.

Helen McIlvaine of the Office of Housing has addressed the issue of affordable homes at the Yard, in meetings between the City, developers and community members. The proposal calls for the affordable housing to be based on yearly incomes of $54,000/yr and rents of, $1,500/month.

Among the features proposed for the new state of the art fire station are a community room to be used by both residents and fire department trainees, as well as the construction of individual sleeping quarters that will be able to accommodate the growing number of women in fire suppression.

Community concerns have also been expressed regarding noise abatement for the homes above the proposed fire station.

Alexandria Fire Chief Gary Mesaris stated that the new location in the Potomac Yard would still allow for a 4 minute response time to emergencies in Del Ray; a time still within accepted limits. Among the proposal being considered are the maintenance of two fire stations; one at Windsor Avenue holding the HAZMAT Response team and the new one at the Yard.

Tenley Tower Starts Coming Down

The monolithic tower that has stood half-built across from the Tenley Metro is finally beginning to come down, according to its owner. American Tower Spokeswoman Lori Philbin said, "American Tower is working diligently to finalize the schedule for dismantling the Tenleytown tower." The company has fought the city for several years about the status of the tower, construction of which was halted approximately halfway when neighbors protested the size of the structure that sits adjacent to several others on Wisconsin Avenue, close to the highest elevation in the city. The massive iron tower was being constructed around the historic Western Union tower, built by noted DC architect Leon Chatelain. 

The Western Union tower was intended to form part of a "radio triangle" of microwave radio-stations linking Washington, Pittsburgh, and New York, and was originally designed to serve as a relay point for the Wideband System and other national security communications systems. In conjunction with the City and through a series of lawsuits, the newer addition was stopped several years ago and has since sat unused. Philbin added that, American Tower is, "...focused on removing the tower as expeditiously as possible while ensuring the safety of residents, contractors…and to ensure minimum disruption to businesses and vehicular and pedestrian traffic in the neighborhood." No final date has been set for completion of the dismantling.

Washington DC commercial real estate news

Whither the Whitehurst Freeway?

Yes, it has been an eyesore since erected in 1949, and yes, it cuts off Georgetown from the rapidly redeveloping waterfront area. But this almost mile-long elevated highway over K Street to the Key Bridge also provides quick access to and from downtown for thousands of Virginia and Maryland commuters, and eliminates potential traffic nightmares on the already claustrophobic streets of Georgetown. With such a conflicted existence, no wonder the battle over the future of the Whitehurst Freeway is often heated, with business leaders and the new luxury condo owners along the elevated road advocating demolition (more traffic means more business, and no freeway means unobstructed water views and increased condo values), and long-time residents and commuters favoring its preservation (especially considering it just received a $35 million overhaul and upgrade in 1998). The latest salvo arrived in late July, when the board of the Georgetown Business Improvement District (BID) voted in favor of removing the freeway. The Georgetown BID will next make its recommendation of a preferred alternative after an upcoming presentation by DC transportation officials. District officials have also proposed demolishing the Whitehurst and making K Street a 4- or 6-lane through street. That is, if they can ever solve the long-time curse of this project: How to connect K Street to both Key Bridge and Canal Road, which differ in elevation by 60 feet, in so short a road length.

Condos - Not Just for Kids Anymore

DC's latest condo conversion isn't reaching for the coveted 20-something market, or even the 30-somethings. 40-somethings? Forgetaboutit. You'll need to be 62 to purchase at the Thomas Circle Residences, a refurbished senior living center at 1330 Massachusetts Ave., NW, offering both assisted-living and "independent senior living." Developed by the Carlyle Group and managed by McLean-based Sunrise Senior Living which manages an international portfolio of senior living centers; condos start at $262,000 for a studio and $669,000 for a 3-bedroom unit, with condos selling as the old units are renovated. While this venture is not a nursing home, an array of services is provided, from 24-hour nursing service to meal packages and free bus service, but health care doesn't come cheap: Condo fees start at $317 and service fees start at a belt-tightening $1300. And yes, federal law prohibiting age discrimination in housing says they can keep you young kids out - laws aren't written by 20-somethings.

Architect to Build New Takoma Condos

Sassan Gharai, of Bethesda-based SGA Architects, is designing and developing a new condominium to take shape in Takoma this Fall. Ecco Park will feature 85 units and 6000 s.f. of retail space in a 4-story building adjacent to the Metro, on a contaminated site now housing a truck rental facility and gas station. The infill project will incorporate green elements - such as a green roof and recyled products - but will not likely be LEED-certified. Patios or balconies are planned for a majority of units, as well as underground parking and exterior fenestration combining metal, stone, and glass; with sales to begin in September and groundbreaking this Fall. Gharai is currently building the Butterfield House on Capitol Hill which should deliver early next year.

Massive Redevelopment of Falkland Chase Apartments in Silver Spring Planned

It appears the Falkland Chase Apartments, the historic apartment community built in 1937 on 22 acres in downtown Silver Spring along the 16th Street - East-West Highway axis, is in for some major redevelopment. According to sources who attended an August 10th community meeting at the apartments and, plans call for the northern portion of the old Falkland Chase complex to be completely demolished, and ultimately the whole community will be redeveloped into biggest project ever in Silver Spring, totaling 1,050 apartment units (the complex now only holds 450 units) in a group of high-rises. In addition, it is expected that a major grocery store such as Harris Teeter will anchor a string of retail shops planned for the development. A timetable has yet to be announced, but between this project and the Gateway project in south Silver Spring at East-West Highway and Georgia Avenue, this area is quickly turning into a metropolis.

Silver Spring, Maryland commercial real estate news

Air Force Memorial Tops Out

The Air Force Memorial in Arlington – those blue, twisting structures rising slowly near the Pentagon – achieves its final height on Friday with placement of the 14^th out of the 15 blocks that will eventually comprise the three curling spires. Designed by the late James Freed of Pei, Cobb Freed, the monument is meant to evoke the wispy contrails of the Thunderbird bomb-burst formation. The 3 spires, now sheathed in blue wrap, will be revealed in the next few weeks to expose the stainless steel structures beneath. The tallest of the 3 spires will reach its maximum height of 270 feet on Friday with the placement of the 14^th hollow block to top out the tallest of the structures. The $30m project, paid for through the Air Force Memorial Foundation by private donations, is being built by Centex construction and should be completed by late September, well in time for the October 14^th dedication ceremony.

Centex Cityhomes Announces Silver Spring Project

Dallas-based Centex, known mainly for its suburban home communities, continues its foray into more urban condominium building by officially announcing its plans for the old auto-repair garage and lot at 1200 East-West Highway (across from the recently completed Silverton, just blocks from the metro stop. The project, called "Cityhomes at 1200 East-West," will likely contain a 14-story, mixed-use building, including 247 condos (ranging in size from 715 to 1365 sf) and approximately 10,600 square feet of retail space on the first floor. Centex purchased the property in May and will be starting construction this year; no sales date has yet been set. With the huge Gateway project underway across the street and development plans for 1200 Blair Mill Road, this south Silver Spring intersection will soon be bursting. The project should be ready in early 2008. Maybe this will give the city enough self- esteem to take down the "Silver Sprung" signs.

Cleveland Park Condo Gets ANC'ed

Bethesda-based Clark Realty Capital is planning to move forward with its condo development in the of Cleveland Park neighborhood of DC despite unanimous opposition by the local ANC. Clark has vetted plans before height-obsessed DC residents for a 5 to 6-story building at 2950 Tilden St., a site just off Connecticut Avenue that sits adjacent to Clark’s last project, the 9-story Connecticut, and a five-minute walk from two Metro stations, but has gotten a cool reception by the ANC for its "towering" height. The building would contain a maximum of 49 condo units in 87,500 s.f. of space. The Sorg & Assoc. design would start at two stories at street-level and step gradually up to 5 or 6 stories, culminating in a green roof with penthouse terraces. Clark expects a zoning decision in September and a ground-breaking in 2007.

Ft. Totten to See Major Mixed-Use Project

Lowe Enterprises has announced they intend to develop approximately 9 acres of land next to the Ft. Totten Metro station after having joined two local developers that recently purchased the land. The Metro station serves both the Red and Green lines but the area, isolated by the CSX lines that bisect the neighborhood, has seen no residential or commercial development - until now. The project is intended to add for-sale and rental housing and substantial retail space, though the composition of the development has not yet been finalized. Though the Metro stop is known more as a dot on the Metro map than a destination, Centex and Clark Realty Capital have both announced large projects nearby - making Ft. Totten the next Petworth (which is the next Columbia Heights - which is the next U Street). Clark's project, already begun, will provide several hundred rental units to the area.

Chianti Conversion?

Hard as it may be to envision, the possibility of a District without old standby A.V. Ristorante Italiano may soon come to pass. Months of whispers were proven true this week, when developer Douglas Jemal finally confirmed that he bought the Mount Vernon Square lot where A.V. now sits, for an undisclosed price, with plans to purchase the rest of this block on New York Avenue between Sixth and Seventh Streets NW (between the new Convention Center and the in-progress Yale Steam Laundry condo project) for conversion to office and retail space. A Washington institution, A.V. has been serving old-school red-sauced pasta and wine to regulars since 1949. The restaurant is expected to close in October 2007.

Monument Realty Cancels 2nd Condo

Monument Realty has confirmed they are abandoning their second large condo-conversion project in as many months, citing a strengthening of the rental market and a weakening of condo sales in certain submarkets. Sales at The Prime, a 256-unit building at 1452 N. Taft St. in Arlington, near the Courthouse Metro station, have been halted, and the building will return to its former status as an apartment building to be managed by Monument. The DC-based developer bought the 14-story, 4-year old apartment building last year, and began sales in February of this year, with approximately 50 of the units having received written contracts. The Prime was to have been completed by the end of the Summer. In June Monument canceled sales at the Park Center in Alexandria, a 571-unit conversion, of which only about 60 units ever sold. The developer still has five other projects – mostly conversions - actively selling in the area, including the famed Watergate Hotel, where 13 of the 96 planned coops have sold. Monument added that it sees “very strong condominium demand…in the medium to long term,” and that “buyers who are waiting for condominium prices to drop further may be surprised to see that they do not.”

Groundbreaking for Donatelli's Petworth Project

On Monday, July 31, Donatelli Development will break ground on Park Place, its latest project, to be built above the Petworth Metro Station at Georgia and New Hampshire Avenues. When completed in mid-2008, Park Place will offer 156 units in a 6-story building designed by Torti Gallas of Silver Spring. Donatelli Development - the builder formerly known as Donatelli & Klein - teamed up with Torti Gallas for the two anchor residential projects in the center of Columbia Heights, inviting speculation that Petworth is the leading edge of the boom that engulfed 14th St. Park place will offer underground parking and private rooftop terraces for prices starting at $320,000 for a 1- bedroom condo and $480,000 for 2 bedrooms. Reservation agreements are currently being taken, hard sales should start in October when final condo certification is issued by the DC government; the general contractor has not yet been selected.

Dare to Dream...of Organic Arugula

The on-again, off-again saga of the Gallery Place Balducci's has taken another turn, hopefully toward the future enjoyment of Penn Quarter residents eager for pricey yet oh-so-good produce and food. Part of the original plan for the ground-level retail space in The Jefferson on 7th Street NW between D and E Streets, statements by officials of the specialty grocery chain had thrown doubt on the store actually opening. However, Balducci's never lost hold of the lease for this 21,000-sf space, and reports now indicate that the chain is once again planning on opening store at this outpost, no doubt spurred by the District's offer to not only waive the store's real estate taxes for 10 years and the sales taxes on its construction materials (the original offer), but to also throw in some new (as yet unspecified) incentives. If Balducci's does decide to not open a store, it is believed it will sublease the space to another grocery chain, such as Magruder's or A&P Fresh Market. Stay tuned....

Historic Silver Spring Fire Department Building on Market

Continuing the march of development along the upper Georgia Avenue corridor in south Silver Spring, this week the Silver Spring Fire Department – which recently moved into its new modern space across the street - has put its old building at 8131 Georgia Avenue on the market for $2.5 million. The station, which the department bought in 1918 for $5,500, is on the Montgomery County’s Index of Historic Places. The two-level station is about 6,000 sf and the building sits on a 7,500 sf lot. The department is looking for a quick sale in order to pay for a new ladder truck. The department is also working with the Silver Spring Historical Society to ensure a proper buyer, adaptation, and preservation of this space, which is seen as perfect for retail, a restaurant, office, or entertainment use.

More Apartments Convert to Private Ownership

Despite the gloomy forecasts of various media declaring an oversaturated condo market, apartments still aren’t safe from conversions. The latest downtown DC conversions include a pair of historic buildings undergoing renovations by local developers for impending sales as condominium units. The newest converts are The Grant, a historic 40-unit building at 1314 Massachusetts Ave., NW, and the Chastleton, an 86 year-old building at 1701 16^th St., NW, with developer Keener-Squire converting its remaining apartments. Despite the supposed malaise of the market, condos in Metro-centered neighborhoods have been the least affected in the region; and with financing costs rising and construction costs, well, going through the roof, conversions offer developers relatively speedy, low-cost alternatives to developing increasingly scarce land. Condo conversions are dead; long live the condo conversion!

RFK Redevelopment Gets a Hearing

The National Capital Planning Commission (NCPC) held a forum last week on the potential redevelopment of the RFK stadium site. The stadium, which sits on a 190-acre site owned by the federal government, is likely to be nearly obsolete with the Nationals relocating to Southeast and D.C. United potentially moving to Poplar Point in Anacostia. With the National Mall filling up like a cheap yard sale, proposed uses include set-asides for future commemorations, as well as park space, commercial and residential development. The DC government retains jurisdiction over the site only for use as a stadium, so redevelopment would require federal cooperation - no word yet on whether a new stadium would be named after the current Attorney General.

Fabled Florida Avenue Grill Gets a New Neighbor – The Lacey

Though details are still forthcoming, it appears that the empty lot currently next to (and serving as a parking lot for) the fabled Florida Avenue Grill at 1100 Florida Avenue NW – serving the best grits and DC since 1944 and regularly patronized by every local and national politician – will soon become The Lacey, a 26-unit condominium building. Division1 Architects has been commissioned to come up with The Lacey’s cutting-edge, sleek European design. While pre-sales are now occurring for "family and friends," it is not known when public offerings will begin.

Montgomery County Approves More Subsidized Housing

County Executive Douglas Duncan signed into law Wednesday afternoon new legislation to require developers to provide "workforce" housing to benefit middle-class residents at new housing projects. The "workforce housing" program (WHP) will apply to all new residential developments of 35 units or more near Metro areas, requiring the developer to set aside at least 10% of their housing for households at or below 120% of the area median income - or $86,000 for a family of two - and will not receive incentives from the county for the additional subsidy. Developers are already required to set aside 12.5% of their units for MPDU's, a lower income threshold. The bill was passed unanimously by the County Council on July 11th, and is set to sunset in 2014. The DC government is currently working on a similar proposal for residential projects of 10 or more units.

Flats at Blagden Alley Cancels Condo Plan

Walnut Street Development confirmed today that they will halt sales for their most recent condo development in DC following disappointing interest. The project, a 45-unit condominium one block from the new Convention Center, named the Flats at Blagden Alley, was to house artist lofts and office condos in addition to the residential units. A WSD spokesman cited "a change in the market" and said that the developer, which has not yet received final condo certification from DC, will continue with the building and finalize condo approval but target the rental market, leaving open the possibility of condo sales closer to the Fall 2007 completion date - or thereafter. The project, designed by Eric Colbert, is still slated to break ground early this Fall. Sales began in late Spring, reportedly selling only 2 out of the 45 units. Numerous condo projects in the immediate area have recently completed, and Faison Development is in the final stages of building its 185-unit condo project directly across the street, where more than two-thirds of the units have sold.

Hertz Building on New York Ave. is Plowed Under

The Hertz building at 11th Street and New York Avenue in downtown Washington DC has finally yielded to development. The unsightly, 2-story building that housed the local Hertz car rental was for years about the only active business in the vicinity, but had recently become overwhelmed by the nearby development surrounding the old Convention Center. The property sold in 2004 to Tishman Speyer for $21m, but Hertz's lease continued until recently, and Hertz closed the office in May. Demolition began this month to make way for an 11-story, 173,000 s.f. office tower to match development underway on all sides of the project. Upon completion in Spring 2008 the building will offer about 10,000 s.f. of street-level retail and 10 stories of office space. No tenants have yet been announced for the project.

It's a Spa, Spa, Spa, Spa World

Don't spa vacations sound fabulous? Yoga in the morning, hot stone massage after the perfectly light & healthy lunch, followed by a bike ride and wonderful dinner. How about living the spa life every day? That, at least, is the pitch being made for a new condo development in Bethesda. Canyon Ranch Living, coming to Bethesda in 2008, is being marketed to those looking to balance home, spirit, body and mind. This 54 acre "village" is the latest entry in the quest for the ultimate luxury living experience in the DC area. The Ranch consists of 434 condos, a hotel, the "Wellness Center," its own medical team, 300,000 sq. ft. of retail, 6 "destination restaurants," and of course, a 6 acre conservation area for "passive recreation." Prices range from $850,000 to $2.8 million. If you're looking for something with just a tad more space while having your nutritionist, therapist and acupuncturist within walking distance, there are also penthouses around $7 million. The idea is not new; the chain idea has succeed in Tuscon, Chicago and Miami, and adding spas in condos worked well for the Ritz-Carlton here in DC. And don't worry, the $30,000 initiation fee for the spa & Wellness Center is included in the sales price.

Converting Chevrolets to Condos

As reported back in April, the retro-looking Bob Peck Chevrolet showroom in Ballston at the corner of Wilson Boulevard and Glebe Road was sold to JBG Development. Now we know what JBG has in mind for the lot (as well as for the space next to it now occupied by Staples). Plans call for JBG to build a 12-story office building on the Peck site, and an eight-story office building just to the north. JBG will also build 28 townhouses on N. Wakefield Street, behind the towers. Construction is expected to begin in early 2008. Residents are pleased with the plans, noting that the townhouses will face the homes on N. Wakefield Street, promoting a more neighborhood feel. However, opposition remains to the idea of building a new road connecting Glebe and Wakefield, to alleviate congestion on Wilson. Neighbors fear this will disrupt the quiet neighborhood.

Rockville Town Square to Grow

Duball (a joint venture between Reston - based Duball, LLC and LA-based CIM Group) recently purchased a 3.2 acre site from Akridge on Rockville Town Square, on which they plan to develop 485 homes, 40,000 s.f. of street-level retail and about 1,400 garage spaces. The new development, to be designed by Torti Gallas, is just 1 block West of the Rockville Metro and bounded by Monroe St., Maryland St., E. Middle, and Montgomery Ave. Duball will develop 2 mixed-use high-rise residential towers, with the lots bisected by a new North-South street to be called "Renaissance St." with the western building to be about 18 stories and the eastern building about 15 stories, to be developed and sold in 2 phases. The developer estimates that construction is likely to commence in '07. The developers, also now co-developing Lionsgate in Bethesda, anticipate marketing toward the more affluent buyers with average units to end up somewhere around 1200 square feet. The full plan has not yet received county approval.

The McEnd of McMansions?

One of the more interesting phenomena during the real estate boon years has been buyers purchasing small lots and homes in desirable neighborhoods, only to tear down the older house to replace it with a boundary-busting big dream home. Well, it seems that one of these locales has had enough. Last week, the Alexandria City Council approved an emergency amendment specifically aimed at this practice of building steroid homes on small lots. The legislation, which for now only extends through 2006, limits the height of homes as well as how a lot can be subdivided. In a released statement on the amendment, Alexandria Mayor William Euille stated that the legislation would "address the 'mansionization' that threatens to undermine the harmony of several Alexandria neighborhoods" such as Del Ray and Rosemont (Old Town Alexandria is already protected by historic preservation regulations). Interested parties are closely monitoring the effects of this move ... stay tuned.

Goodbye, China Doll

After almost 40 years, China Doll, located in Chinatown at 627 H Street NW, has decided to exchange chow mein for cold hard cash. The Lee family, owners of the two-story restaurant, sold the building to a developer late last year, though the official acknowledgment of this sale wasn't made until the business served its final meals last week. While the Lee family is keeping the purchasing developer a secret, it appears the building will be part of a residential, retail and office project.

Level 14 Project to Break Ground This Week

The Petrovitch Auto Repair Garage has seen its last jalopy. The four-story building, long a fixture at the corner of 14^th Street and Florida Avenue, NW, is finally scheduled to be demolished this week to make way for Level 2’s new $80 million View 14 condominium project. View 14 will contain 180 condo units (starting in the mid-$200s up to $1 million), as well as a 20,000-square-foot gym and 16,000 square feet for retail, and is scheduled to be completed by summer 2008. One troublesome issue with the lot are the Comcast satellite dishes on the south corner, though Level 2 has indicated it will move the dishes and put an antenna on top of its building when completed. In addition, over $1 million needs to be spent cleaning up the motor-oil contaminated soil under the site.

Last Piece of Ballpark District Puzzle Bought

Big things come in small packages, at least if you're a major developer with dreams for the new Southeast DC Ballpark District. Last week, after a year of negotiations, Monument Realty purchased a tiny, 1,344-sqaure foot lot holding a dilapidated house for the seemingly lofty price of $1.1 million. But its value far exceeds the purchase price for Monument, as this parcel – located at the corner of N and Half Streets, SE and at the north entrance of the new ballpark location – is the last piece the developer needed for its planned 2 million square feet of office, residential and retail space. Having already spent $50 million over the past year buying up this land, not having this final lot would have spelled trouble. Monument Realty plans to start building this project next spring, and have it completed in 2009.

Petworth Project Gets Nod

A Washington DC Council committee this week gave an approval to a project in the 4100 block of Georgia Avenue by allowing closure of the alley between Georgia Ave., Kansas Ave., and Taylor St. The local ANC has already given its approval for the Neighborhood Development Corp (NDC) to construct a mixed-use rental development just north of the Petworth Metro, expected to contain 72 affordable apartments, with construction to start this Fall (artist's rendering of building is pictured). Included will be 10,500 square feet of retail and 57 underground parking spaces. The Petworth construction boom comes as nearby condo projects Park Place (completion in 2008) prepares to start sales shortly, and as Georgia Avenue readies for a new rapid transit bus running from Silver Spring to the National Archives. The novel rapid transit will operate new 40- foot buses beginning the end of September, reducing the number of stops from 54 to 14, and will be equipped with an emitter that lengthens the timing of green lights to allow the bus to pass through.

Sold Out! Now Selling, Please....

Envy the marketers that sold 100-unit condo projects almost overnight, able to walk away with quick profits...and then start over. While many condo projects sold out quickly during the boom, the changing market has led many hesitant or remorseful buyers to renege, leaving developers to remarket the property post-marketing blitz and sales centers. The Crescent in Silver Spring saw 11 of its 143 units come back on the market when buyers became wary of the condo market, and Jenkins Row on Capitol Hill saw numerous contracts rescinded as sales slowed in 2005. Often foregoing their 5% security deposit and security for upgrades, anxious buyers sometimes see breaking their contract as less costly than paying taxes and closing costs on units that may have declined in value, and in some cases have purchased in another building where better incentives justify losing $20,000 or $30,000. The Rhapsody on Florida Avenue (pictured), sold out last Summer and now fully built, is offering units that failed to close, and now has to compete with several nearby projects offering incentives and the opportunity to select builders’ options. While having a defaulting buyer is not new, several developers say the rate has risen as home buyers now have more opportunities and the market and time to shop.

DC Passes Rent Control Reform

DC Mayor Williams signed into law on Tuesday a revised rent control law, updating one of the more arcane systems of rent control in the nation. The law caps rent increases for covered properties at 2% plus CPI for occupied units and up to 5% for elderly and disabled tenants; rent increases for vacant units will be capped at 10% or to the price of a "substantially identical rental unit," not to exceed a 30% rise. The new system abolishes the complicated rent ceiling / rent ceiling adjustment factor that left many landlords and tenants unsure of the permissible rent. Councilmember Jim Graham, who sponsored the bill, estimated that the change will affect 100,000 apartments in the city. Bill 16-109, which goes into effect in 30 days, limits rent increases to once per year. View the full text of the bill.

Interest Rate Hits Five-Year High

On Thursday, the Federal Reserve raised the federal funds rate (the interest that banks charge each other) by a quarter-point to 5.25 percent, the highest level in more than five years. This rate raise, the 17th consecutive increase, was done in order to help "limit inflations pressures," according to a statement released by the Fed. Only two years ago, the fund rate stood at a 46-year low of 1 percent. Banks responded to the Fed increase by quickly raising the prime rate (to which most consumer lending is tied) to 8.25 percent, the highest since 2001. Before the Fed’s move Thursday, the average rate on a 30-year mortgage was 6.78 percent.

All Aboard! Woodbridge to See Building Boom

According to the Washington Business Journal, the Woodbridge area of Prince William County (home of Potomac Mills Mall) is about to experience a building boom in an effort to capitalize on its Virginia Railway Express (VRE) transit stop. The Hazel Land Companies, Inc., is backing the creation of Rippon Center, a high-end $200 million project next to the VRE’s Rippon Station that will feature 550 high-rise condominiums, 250,000 sf of office space, and 27,000 sf of retail, as well as a 300-space parking deck. Justifying the project, Bob Wulff, executive vice president of Hazel, told the Journal that "[t]his property is walking distance to the train station, and in an era where traffic is only getting worse, it's a terrific asset. You can get to Downtown D.C. in 35 minutes." Hazel has already developed a 734-unit community next to this land at Riverside Station. Prince William County planning officials have already approved Rippon Center's rezoning application, and if the Board of Supervisors also approves it this summer, construction would start in 2008.

Clarendon Center Project Gets Approved

Last week, the Arlington County Board gave its official approval to the Clarendon Center plan, calling it "one of the most significant site plans ever approved in Arlington." The proposed Clarendon Center will be bounded by Wilson Boulevard, North Highland Street, 11th Street North and North Garfield Street, and will contain new office space, ground-floor retail, and a residential tower. While featuring major redevelopment, the project will preserve two historic structures – The Underwood (built in 1939) and the Old Dominion buildings (1941). Specifically, next to the Underwood will be built a 97,860 square-foot, six story office building, and 15,725 square feet of new ground floor retail space. Meanwhile, the Old Dominion building will anchor two new towers – one a 244-unit, twelve-story residential tower and the other a nine-story, 84,395 square-foot office tower, plus 38,333 square feet of new ground floor retail. Both development areas will be separated by a landscaped courtyard. The developer, Saul Centers, Inc., expects to break ground late this year on Phase I (the Old Dominion site), with a completion date of early 2009. Phase II (the Underwood site) is expected to break ground in late 2008 or early 2009, with a completion date of 2010.

King Farm Condo Conversion Opens for Sale

Sales begin this weekend for the Royalton, the newest condo development at King Farm in Rockville. The townhouse community was built over the last six years at the intersection of I-270 and I-370. Located 2 blocks from the Shady Grove Metro, the condos-to-be were built in 2004 as part of the 1100-plus rental apartments within the planned neighborhood until Chicago-based developer Monaco purchased 317 of the apartments for conversion, reportedly for $112m. Each unit will be renovated as it is purchased; condos will start at $253,900.

Georgetown Waterfront Park Finally Moves Forward

With all the recent excitement over plans to redevelop the Southwest and Anacostia waterfronts, it’s been easy to forget the lack of activity surrounding the long-on-the-board plans for the Georgetown waterfront. However, this is about to change, as work is now starting on the $15 million Georgetown Waterfront Park, which is to occupy 10 acres between Washington Harbour and the Key Bridge. When completed by the end of 2007, the park will include pathways, a new promenade to integrate the shore line from Key Bridge to Washington Harbour and the Kennedy Center, gardens, a bike path connecting the Rock Creek Trail to the Capital Crescent Trail, and “environmentally sound bio-edge spaces that preserve native plants and enhance water quality” … guess we’ll see what that means in 18 months.

Build It and They Will Come...and Park

A major piece of the new Washington Nationals stadium puzzle slowly moved into place this week, as DC Mayor Anthony Williams confirmed Tuesday that plans are in development to build a mix of both above and underground parking next to the ballpark. The parking structure will be part of a stadium complex that will also contain retail stores and 660 new condominium units (140 units will be priced below market value for lower-income residents). Also expected for this development is the arrival of a 180-room boutique hotel at the corner of 1^st and N Street SE, with early word indicating it could be a local outpost of the New York-based W Hotel chain. The parking plans – which call for 900 spaces on one level below ground, and another 925 spaces spread above two new structures in the complex (which will contain the condos and retail outlets) - are the end result of negotiations between developers, the city, and new Nationals ownership. Whether this plan provides enough parking for both the opening of the stadium in April 2008 as well as for the condo dwellers and visitors to the entertainment area is now up for debate....

Monument Backs out of Condo Development

Monument Realty has announced it is cancelling its planned conversion of the 571 unit Park Center condos in Alexandria's West End. The three apartment towers, dating from the mid-1970's, were purchased by Monument for the purpose of conversion into condominiums and were undergoing renovation. No settlements have occurred on the individual condos, which a spokesman said is currently about 50% occupied by tenants. Only about 60 contracts were written on the property since sales began in June of last year. Monument will retain the property for now and rent the remaining units; purchasers are being offered their security deposits back, with interest. Monument is currently in the processing of converting the famed Watergate Hotel into 96 coops, and owns approximately 12 acres of non-contiguous land in the vicinity of the soon-to-be stadium, including 3.5 acres adjacent to the stadium on Half St. Monument is currently selling condos at the Chase, a condo conversion in downtown Bethesda, the Palatine and the Prime, both highrises in Arlington, and at Potomac Place in Southwest DC.

Former Embassy in Dupont Goes Condo at Last

Burgess Properties began sales this week of the former Taiwanese Embassy as the Duncan Condominium. The building, at the corner of 18^th & R Street in the center of Dupont Circle, was built in 1900. The development received zoning variances in February 2004 and first advertised condo sales in late 2004, but development issues slowed the project. Sales never commenced, and the building has since remained vacant and visibly deteriorated. Prices for the 9 condos will range from $780,000 for a 1 bed, 1 and a half bath condo, to $1.8m; condos are expected to be completed by this Fall.

DC Waterfront Redevelopment Sails Forward – Five Developers Contend for Project

The Washington Business Journal is reporting that on June 13, the Anacostia Waterfront Corporation (AWC) trimmed its initial list of 17 developers vying for the right to redevelop the 47-acre Southwest waterfront to just five teams. Four of the teams are led by Washington-area developers, with the last team hailing from Chicago. The teams are: EastBanc-LNR Waterfront Partners; Madison Marquette and KSI Services and Waterfront Partners; SW Waterfront LLC (headed by JBG); PN Hoffman and Struever Brothers Eccles & Rouse; and the John Buck Co. of Chicago. The five teams were selected for their experience with public/private large-scale, mixed-use projects. The AWC expects to select a final team by the end of this summer to fulfill its dream of a gleaming new $500 million waterfront full of "maritime-themed" housing and retail. Considering how the Southwest waterfront is now blocked by rows of big-boxed restaurants of middling quality, the AWC plan is a welcome development that will embrace DC’s impressive waterfront.

Where Have All The Good Bars Gone?

Those of us of a certain vintage (let’s stick with “old enough to know better”) can recall spending hazy nights at such bygone watering holes such as the old Crow Bar and 15 minute club downtown off eerily quiet K Street, or the Insect Club and dc space in once-desolate Penn Quarter – spaces now sporting sleek new office buildings or a Starbucks. Well, the next generation may soon be boring its young-‘uns with tales of long-forgotten bars such as Carpool and Dr. Dremo’s where new condos now stand, if current development plans come to fruition.

First on the block is Carpool, on Fairfax Drive in Arlington. Donohoe Development plans on replacing the billiards and beer hall with a 232,500 sf mixed-use development of 188 condominiums and retail outlets, with completion sometime in 2008. This isn’t your typical “small guy driven out by developers” story, though - Carpool actually owned its building, and sold the land to Donohue with new projects and locations in mind.

As for Dr. Dremo’s (like Carpool, a former auto showroom), the stretch of prime Wilson Boulevard real estate it resides on is slated to become a mixed-use development called 2000 Wilson, with 174 condo units and retail. If the settlement on the property goes through, the developer, Elm Street Development, hopes to begin work later this year.

More Changes Coming to H Street

Previous reports on the redevelopment of H Street NE have usually focused on the western Union Station side (The Senate Square / Landmark Lofts condo project at 3^rd and H Street) and the eastern end (Joe Englert's entertainment district and the Atlas Theater), but never the sandwiched middle portion of the block. This will soon, change, as the Washington Business Journal is reporting that Washington Real Estate Partners is planning on turning the 600 block of H Street into a 312,000-square-foot residential, retail and office project valued at nearly $150 million. According to documents filed with the DC Board of Zoning Adjustments, Washington Real Estate Partners is hoping to develop an existing 200,000 SF office building into 234 residential units, with 500 parking spaces and ground-floor retail, with the resulting building being nine stories in some parts (which is sure to stir up those hoping to keep the smaller scale of H Street intact).

The Condo Gods Giveth, and Taketh Away

It might be tempting to analyze recent developments in the Rosslyn/Arlington condo market and make broad pronouncements on "The State Of The Market," but we’ll leave such baseless articles to the Washington Post. We’ll just go with, "You win some, you lose some." Early this week, a planned grand opening for 1325 Pierce was canceled by the Dittmar Company, and instead the company has decided to move forward with the building now being apartment rentals. Originally, these 19 units, which feature 2 or 3 bedrooms and balconies, were to start selling in the $600s, but they are now being listed for rent starting from $2350/month. When contacted, a Dittmar representative confirmed the "reverse conversion" to rentals, asserting it was done to take advantage of the "strong rental market for 2 and 3 bedroom units." However, all is not lost, as just around the corner from 1325 Pierce near Ft. Myer is a new upscale condo project named Scene Cityhomes by Centex Homes. These units are expected to include secured parking, gas fireplaces, walk out balconies, stainless steel appliances, etc. - not to mention interior "translucent walls" for those always wishing they had x-ray vision. Units will range in size from 900 sf to 2900 sf, and prices are expected to start from the mid-$400's for 1BR/BA to $1million for the penthouse 2BR/2.5BA. Delivery will be in 2008.

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