24 September 2007

Developer Pulls Out of Washington Gateway in Ft. Lincoln/New Town

Unfortunately I don't have the time right now to comment on this other than to say I'm happy the discussion with any potential developers will include the desire for less big-box design and an emphasis on protecting the wetlands, but all-in-all the news is a big blow to the surrounding community....from the Friday, 9.21.07, Washington Business Journal:
Real Estate
Peterson quits Washington Gateway project in D.C.

Washington Business Journal - September 21, 2007
by Prabha Natarajan, Staff Reporter

The Peterson Cos. has pulled out of the project to develop Washington Gateway, a massive retail center on New York Avenue NE that was slated to include D.C.'s first Costco.

"There's a time and place for everything, and it was not the right time for us at Washington Gateway," said Paul Weinschenk, vice president of retail at Peterson.

The $67 million Washington Gateway, which was scheduled to start construction next April, would have housed 412,000 square feet of retail including big-box stores, such as Staples and Target, at the corner of New York and South Dakota avenues NE.

The plan was approved by the National Capital Revitalization Corp., whose responsibilities are now under the deputy mayor for planning and economic development, and received a preliminary nod from the National Capital Planning Commission (NCPC).

However, this spring, the deputy mayor's office suggested changes to address any impact on the property's wetlands and alter the design from that of a big-box complex to a more contemporary look.

According to Weinschenk, the changes would mean more delays and more work on a project thought to be in its home stretch.

"From our perspective, we felt that until some of these issues could be worked out it didn't make sense for us to continue with this process and we needed to suspend our efforts," Weinschenk said.

Fort Lincoln Realty Inc., a D.C. developer, had brought in Peterson in 2003 as the developer of the retail/restaurant portion.

Peterson came back with a proposal to put in a 151,700-square-foot Costco, a 67,500-square-foot Shoppers Food Warehouse and a 123,735-square-foot space for both Staples and Target stores.

People in the neighborhood loved the plan. The Advisory Neighborhood Commission 5A endorsed it, and it was seen as a destination for the 128,000 cars that drive in and out of the city daily on New York Avenue.

After last fall's preliminary NCPC approval, Peterson and Fort Lincoln Realty were going to present an updated plan and either an environmental assessment or an environmental impact statement concerning the wetlands to the commission this October.

The deputy mayor's office and the Office of Planning, however, had ideas that would have changed the existing plan and accommodated the wetlands in the development.

"We had a different development scheme to protect the wetlands," said Harriet Tregoning, D.C.'s planning director.

"If the city was interested in a Costco on the site and a Target, ... then you can't assume you will keep all the natural features on the site as they exist," Weinschenk said. "The city has to decide whether it wants those [retail] uses and allow land to be developed to support these uses, or you allow the land and its natural features to drive the uses."

Tregoning said the city still wants retail on that site, which ties in with its objective to get more stores in the District.

"We think the original design, which is 20 years old, can be improved upon," she said.

At this point, it is unclear what will happen to the retailers that signed on or expressed interest in being a part of the project.

Peterson said the leases were in various stages of negotiation, and it is up to the retailers to pursue the space. Industry insiders say Fort Lincoln Realty is looking for a retail developer to pick up where Peterson left off.

A change in developers is not something new to this site.

Before Peterson, there was Federal Realty Investment Trust of Rockville and Trammell Crow Development. A $10 million tax-increment financing deal was approved in 2004. The 42-acre project was expected to create 124 construction jobs and $6.2 million in new taxes for the city.

All is not lost yet, said Robert King, ANC 5A commissioner.

Fort Lincoln Realty is expected to give a project update at the ANC board meeting Oct. 10, including information on will happen to the retail site, and King said the news will be good.

"As far as we know, the project is moving straight ahead with a new developer. The train is still on track," he said. "I have been working for 20 years on this project and would jump off a bridge if it doesn't happen."

» A bit of history on Ft. Lincoln/New Town, "Fort Lincoln: Finding a Leafy Enclave" - WaPo, 7.18.92
» Our litigious buddy, Roy Pearson, and a 2002 lawsuit against Fort Lincoln New Town Corp., "Residents sue, charge Ft. Lincoln New Town developer with fraud" - The Common Denominator 8.12.02
» New residential development in Ft. Lincoln, "Hope Stirs In Fort Lincoln: Growth, New Neighbor Inspire Pocket of D.C. to Believe in Change" - WaPo, 4.30.07


  1. i don't see this as a negative. yes, the increased tax dollars for the district sooner would be a good thing, and the convenience for people in the neighborhood (heck, even out of the neighborhood, like me) would have been great. but there's no loss here. as there was nothing there to start with, it's not like a store we all relied on is closing, or something like that.

    so the area will remain as-is a little longer. in the end, there will be positive development there, we just will have to wait a little longer. and in the end, we'll get a better project than what was proposed.

  2. excellent posting!


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