Huge retail complex breaks ground in D.C.

Construction started yesterday on the biggest retail development project in the District, called DC USA.

The $149.5 million complex is planned for a 5-acre site at 14th and Irving streets Northwest in Columbia Heights, near the Columbia Heights Metro station and the historic Tivoli Theater.

The start of construction coincides with the developers receiving final approval for the financing of the half-million-square-foot retail complex.

"DC USA is the largest and most significant component of Columbia Heights' revitalized retail corridor," Mayor Anthony A. Williams said.

Discount retailer Target has signed a contract to be the main occupant. Other retailers planning to move in to the complex are Best Buy, Staples, Marshalls and Bed Bath & Beyond. About 60 percent of the space already is leased.

DC USA is a centerpiece of the city's redevelopment in Columbia Heights.

Other projects nearby include renovation of the historic Tivoli Theater, the opening of a Giant grocery store last spring and ongoing construction of 600 residences.

The complex, scheduled for completion in 2008, is projected to bring about 1,000 permanent jobs to the Columbia Heights, Mount Pleasant and Adams Morgan areas and about 700 construction jobs.

Mr. Williams said it would add more than $12 million a year in taxes to the District's general fund.

"For so many years, people have had to go outside the District to do their shopping," said Robert Moore, president of the Development Corporation of Columbia Heights, a community business group.

Columbia Heights is dotted by small retail stores, but lacks a large retail center.

Some of the small-store owners are worried about how DC USA will affect their businesses.

"All the small businesses are going to go out of business," said Maria Cruz, owner of Tienda La Union Clothing Store, which is several blocks from the DC USA site. "I've been in business for 18 years."

Competition from the large retailers is likely to drive customers away from the smaller stores, she said.

Other residents are taking a wait-and-see attitude before worrying about any disruption from the project.

"I don't worry about that," said a Columbia Heights Pharmacy worker, who asked not to be named.

The start of construction yesterday culminates a process that started six years ago but was slowed by bureaucratic procedures to issue municipal bonds and close alleyways that adjoin the retail area.

"It was not a contentious process; it was just a lengthy process," said Drew Greenwald, president of Grid Properties, the lead developer.

Washington's National Capital Revitalization Corp. is issuing $46.9 million of tax-exempt bonds to pay for the complex's underground parking garage. The garage will have 1,000 spaces and be built on three underground levels.

Citibank is providing an $88.6 million construction loan for the shopping area. The developers, Grid Properties and Gotham Organization, are paying for the rest.

A Washington Sports Club with a swimming pool and basketball court will take up 40,000 square feet. Specialty retailers that have signed leases include Radio Shack, Mattress Discounters, Lane Bryant, Caribou Coffee, the Vitamin Shoppe, Quiznos and Panda Express.