- The Washington Times - Monday, December 4, 2006

The Waterside Mall in Southwest will be redeveloped into a $750 million, 13-acre complex of offices, retail and residences under a plan announced yesterday by Mayor Anthony A. Williams.

The project is a major step in the District’s effort to revitalize the area around the Anacostia waterfront, Mr. Williams and the developers said.

“It’s going to integrate the city’s plan for Anacostia redevelopment,” Mr. Williams said during a press conference in front of Waterside Mall. “We believe it’s a real component of economic growth.”

The project is designed to include about 1.2 million square feet of office space, 1.2 million square feet of housing, as much as 160,000 square feet of retail and a smaller amount of open space. The developers also plan to reopen Fourth Street, now blocked by Waterside Mall.

The District plans to lease the two office buildings to be built on the east and west sides of Fourth Street Southwest to house the Office of the Chief Financial Officer and the Department of Consumer and Regulatory Affairs. The agencies would occupy 500,000 square feet of space in the buildings.

Construction is scheduled to begin in spring. The first parts of the development, such as some retail and office space, would open in late 2009.

The first $50 million of the costs is being financed in cash by the consortium of developers called Waterfront Associates. The group includes developers Vornado/Charles E. Smith, Forest City Washington, and Bresler and Reiner. The rest of the $750 million would come from debt financing, although the project partners have not determined the type.

“We just got the plan; now we’ll get the financials,” said Anthony C. Freeman, president of the National Capital Revitalization Corp.

D.C. officials were uncertain about who would lease the space besides city agencies and three tenants of Waterside Mall — Safeway, Bank of America and CVS/pharmacy — that plan to stay when the Waterfront town center project is completed.

“We’ll take it into the marketplace to talk to folks,” said Mitchell Schear, president of Vornado’s Charles E. Smith division.

The developers are awaiting approval from the D.C. Zoning Commission on the utility plan for the five-building complex, but say they expect no opposition.

Some of the space at Waterside Mall is vacant. Crews have started tearing out the interiors of the vacant buildings to prepare for construction.

The Environmental Protection Agency, a major tenant for years, moved out in 2002. Mortgage giant Fannie Mae canceled its agreement in January 2005 to take over the space vacated by the EPA in an effort to reduce costs.

However, new residential and office complexes are being built in surrounding neighborhoods as the District focuses its redevelopment efforts near the new Washington Nationals baseball stadium and the Anacostia waterfront.

“This will be a gateway to much of the development east and west of here,” Mr. Schear said about the Waterfront town center.

D.C. officials described the relocation of the Office of Chief Financial Officer and Department of Consumer and Regulatory Affairs as big but far from being a major move.

“It’s a very large commitment,” said Carol Mitten, director of the D.C. Office of Property Management. “It’s by no means the bulk of our portfolio.”

Smaller agencies might be moved to the Waterfront town center if any space remains after the relocation, Ms. Mitten said.

The District leases about 3.2 million square feet of office space and owns roughly an equal amount, she said.

Leases on the Waterfront town center office building space will cost about $14 million a year, which Ms. Mitten said was competitive with current rates the District pays.

The developers also plan to offer as many as 160 “work force housing” units that would be sold at less than market rates to purchasers whose wages fall into a middle-income range.

The center would be a short walk to the Waterfront/Southeastern University Metro station.

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