- The Washington Times - Thursday, April 26, 2001

Two of downtown Bethesda, Md.'s oldest businesses are headed for the history books so developers can replace their landmark buildings with apartments.

The Bethesda Theatre Cafe, which opened as the Boro Theatre in 1938, closed this month so its landlord could build eight levels of apartments above it.

Meanwhile, the family that owns O'Donnell's seafood restaurant which opened in 1956 is planning to tear it down and put a high-rise apartment complex.

Both businesses are on Wisconsin Avenue, the main street in the unincorporated town of 55,000 residents.

"It's bittersweet," said John C. Alexander, a commercial real-estate broker and president of the Greater Bethesda-Chevy Chase Chamber of Commerce.

"People are sorry to see them go but, on the other hand, we always welcome new investment in downtown Bethesda," he said.

The Bozzuto Group, a Greenbelt development company, is slated to begin construction next month on a $60 million housing complex that will wrap around the Bethesda Theatre Cafe building.

The 577,000-square-foot project will include eight levels of apartments above the theater, with more apartments, two parking garages and town houses behind it.

Bozzuto has agreed to restore the art deco-style theater and rent it to another tenant who will use it as a performing arts venue.

Thomas Bozzuto, the firm's chief executive, said it would have been easier to tear the theater down, but Montgomery County planners insisted it remain on the property.

"I would have liked to have used [the theater] as a rental office, but we weren't allowed to do that," Mr. Bozzuto said. Keeping the theater will "add character" to the housing complex, he said.

William B. Edelblut, whose family owns the O'Donnell's restaurant, said he is redeveloping his site to take advantage of Bethesda's tight apartment market.

The apartment vacancy rate in Bethesda was 1.4 percent during the first three months of 2001, according to Delta Associates, an Alexandria real-estate research firm. The rate for the entire D.C. area was 7.1 percent during the same period, Delta said.

County planners are scheduled to hold hearings next month on the O'Donnell's proposal, which calls for an eight-story complex with 200 apartments and retail and restaurant space on the ground floor.

"It was a tough decision… . There is a real need for more housing in the urban district. We saw it as an opportunity to maximize the economic potential of this piece of land," he said.

O'Donnell's may reopen on the ground floor of the new apartment complex, Mr. Edelblut said. In the meantime, his family will expand a second O'Donnell's location in Gaithersburg.

The movie theater and O'Donnell's are the latest landmarks in downtown Bethesda to fade away.

The Hot Shoppes restaurant at Wisconsin Avenue and East-West Highway has been replaced by a 700,000-square-foot office tower that will be the new headquarters of Chevy Chase Bank FSB. Construction on the building is expected to be completed by June.

Also, the 15-year-old Create Expressive Arts Center on Wisconsin Avenue said it has lost its lease and must move by the end of June. Norman Jemal, the building's landlord, said he must find a business that can afford to pay higher rent on the 15,000-square-foot space.

The artists paid about $12 a square foot, Mr. Jemal said. The average rent in downtown Bethesda is $34 a square foot, according to Delta Associates.

Montgomery County Council member Howard A. Denis, Chevy Chase Republican, called the loss of the older businesses "the price of progress."

He said some of the town's residents have been caught off guard by the closings, even though the apartment projects have been in the works for years.

"These things come in waves, and it can be disorienting. People don't want to wake up and feel like they've become a stranger in their own hometown," Mr. Denis said.

Bethesda residents in the past have said the downtown has too many tall buildings already, and is becoming difficult to distinguish the town from the District.

Similar complaints have also surfaced in Arlington County, which has given developers permission to tear down its aging, 1960s-era office buildings and replace them with modern towers.

"I don't think Bethesda has become dominated by the tall buildings," said Ed Grimm, marketing director for the Montgomery County Department of Economic Development.

"The fact is that it is one of the main commercial districts in Montgomery County and it attracts a lot of investment from the development community," he said.

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