- The Washington Times - Monday, May 5, 2003


  D.C. planning officials and developers are betting that the federal government will inject life into a part of town that technology companies failed to revive.
  With a new Metro station and the headquarters of the Bureau of Alcohol, Tobacco and Firearms scheduled to open by 2005, D.C. officials view the area around New York and Florida avenues in Northeast, also known as “North of Massachusetts Avenue,” or “NoMa,” as being poised for economic growth — with government agencies and contractors leading the way.
  Officials and real estate professionals say the collapse of the technology sector and the sluggish economy have necessitated a shift toward attracting the stable, creditworthy government tenants that have traditionally driven the District’s commercial real estate market.
  Last week, Bristol Group Inc., a San Francisco firm that develops and invests in commercial real estate, announced that it was marketing 131 M St. NE, a 408,400-square-foot office building, to attract government tenants and contractors.
  The building, now called “One NoMa Station” had been a warehouse for the Woodward and Lothrop department store and was refurbished in 2000 to attract technology tenants. TeleGlobe and 350 Networks signed the first two technology leases, but both companies filed for Chapter 11 bankruptcy protection last year and no longer occupy space there.
  “The one shift is that the technology market isn’t expanding, and in fact it may be shrinking,” said Andrew Pellman, Bristol Group’s project manager for the site. “We’re now marketing it toward government tenants. We would hope that the U.S. government has better credit than our previous tenants.”
  Planning officials downplayed talk of a full-fledged philosophical shift about the NoMa site, insisting that they still welcome technology tenants. But government aid in attracting them has essentially dried up, and no one appears willing to wait for a rebound in the tech market.
  “I don’t think it’s a philosophical shift. It’s a change in the marketplace,” said Andy Altman, director of the D.C. Planning Office. “You can’t force a market that’s struggling.”
  Mr. Pellman and Mark Mallus, a broker for CB Richard Ellis assigned to lease space in the building, said One NoMa Station eventually will be part of a larger urban campus, with several buildings and open space. There are seven acres on the site.
  The two men said the eventual look of the site will depend on which agency or contractors move there and whether they will want to expand.
  The focus on government tenants probably will put pressure on the development’s commercial and retail businesses to succeed, because government tenants pay no local taxes.
  Planners have said they hope the ATF and other government tenants attract enough workers to support restaurants and shops in the neighborhood.
  The D.C. Planning Office in some cases has asked that government tenants refrain from including amenities in their own offices, as a way to lure people out of the office to spend money. The ATF headquarters, which is expected to open in 2005, will house about 1,100 workers but will have no amenities.
  “I think we would clearly like to see it become mixed-use and don’t want it to become just another office corridor,” Mr. Altman said.
  Though the NoMa development has not flourished as D.C. officials had planned, they remain optimistic about the chances of it becoming a burgeoning area.
  Planners say the ATF headquarters and the Metro station will lead to a larger daytime population, which will spend money on retail and other amenities.
  And there’s the wild card: If Major League Baseball relocates a team to the District, New York Avenue is seen as the most popular and least controversial site for a new stadium.
  “It’s unquestioned that this will be the new growth area,” Mr. Altman said. “Once that Metro stop opens, it will be a magnet for development.”
  

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