- The Washington Times - Wednesday, March 7, 2007

D.C. residents who live east of the Anacostia River have been watching from the sidelines over the past decade as new office buildings, sleek condominiums, grocery stores and fancy restaurants have opened throughout the rest of the city.

The rapid economic growth has been lost on Wards 7 and 8, where retailers consist largely of liquor stores, check-cashing shops and fast-food chains, where there is more government housing than anywhere else in the District, and where there are few offices to drive a daytime population.

That may be about to change.

After years of telling developers there is money to be made east of the river, residents of Wards 7 and 8 are finally within grasp of having some development of their own. Government agencies are constructing buildings, grocery stores are moving in and median housing prices are rising more than in any other ward.

About $1.2 billion worth of development projects were completed in these wards since 2001. That figure is expected to triple by about 2012 with office, residential and retail projects under construction or in the planning stages, according to the Washington, DC Economic Partnership, the public-private group responsible for bringing development to the city. The group counts projects valued at more than $1 million.

The development is coming online now because the rest of the city is largely built out and redevelopment has been moving west to east, leaving Wards 7 and 8 — just past the new baseball stadium and construction on the west side of the Anacostia River — as the next frontier. The city also has promised to offer tax incentives and to move government agencies there.

“People are betting on 7 and 8 in the future now in a way that they weren’t a couple of years ago,” said Steve Moore, president and chief executive officer of the economic partnership.

And these aren’t little wagers.

Development slated to triple

About 6.7 million square feet of office development — 10 times what was constructed from 2001 to present — has been planned or proposed for Wards 7 and 8, according to the economic partnership. Many of the buildings will house local and federal government agencies placed with the intent to spur growth in the area.

The 600 employees of the D.C. Department of Transportation are scheduled to move in, as well as the departments of employment services and human services. They could be joined by the 150 employees of the National Association for the Advancement of Colored People, the nearly 200,000 employees of the Department of Homeland Security and the 10,000 employees of the Washington Metropolitan Area Transit Authority, if those deals are completed.

More than 10,000 residential units also are under construction or proposed, up from about 6,600 created since 2001.

“There’s a new emphasis on mixed-income housing,” said Linda V. Jackson, president and executive director of the East of the River Community Development Corp. “That has been the biggest catalyst.”

Median home prices rose 27 to 28 percent in these wards from 2005 to 2006 — to $250,000 in Ward 7 and $235,000 in Ward 8 — faster growth than any other ward, according to NeighborhoodInfo DC, a research group from the Urban Institute and the Washington DC Local Initiatives Support Corp. At the high end is Asheford Court at the Shops at Park Village, where prices start in the $400,000s.

Retail developers have followed the promises of offices and homes full of shoppers with commitments to build shopping centers and other projects. About 1 million square feet of retail is planned, compared with none since 2001.

“What’s in the pipeline is significant. It’s unbelievable,” said Keith Sellars, vice president of retail and development at the economic partnership, who added that residents are looking for grocery stores, bookstores, coffee shops, dry cleaners and sit-down restaurants.

Redevelopments of Skyland Shopping Center on Good Hope Road Southeast and the Shops at Park Village (formerly known as the Camp Simms National Guard post), as well as the new Capital Gateway Marketplace on East Capitol Street and Poplar Point Place are slated to bring a combined 750,000 square feet of new retail development to the area.

Giant Food is scheduled to open the only grocery store in Ward 8 by the end of the year at the Shops at Park Village, and three other buildings have early plans for grocery tenants.

Two development projects — Skyland and Poplar Point — include plans for a big-box retailer, but neither has a commitment from a tenant.

Much of the development is centered on the historic Anacostia area, just over the 11th Street bridge. That’s where the Anacostia Gateway office buildings are under construction. To the west is the land slated to become the Poplar Point development. South of that is the St. Elizabeths Hospital campus and Shops at Park Village.

Development hits its stride

Redevelopment in the area had a couple of false starts. In the mid-1980s, the DC Lottery and Charitable Games Control Board and the DC Taxicab Commission moved to Martin Luther King Jr. Avenue Southeast, but neither kick-started economic development as city leaders had hoped.

“The retailers didn’t follow,” said Butch Hopkins, president and chief executive officer of the Anacostia Economic Development Corp. “They didn’t feel there was adequate income. They didn’t see the critical mass.”

Residents typically travel to Alexandria or Prince George’s County for grocery shopping because there are few options near their homes. There are only a handful of dry cleaners and sit-down restaurants, especially in Ward 8.

Developers were once scared away from the area east of the river, with its high crime and low incomes.

“Retailers do their homework, they study the demographics to see if an area can support their stores,” Ms.Jackson said. “For the last decade, I don’t think Ward 7 and Ward 8 could support it. It wasn’t an attractive area to keep a store.”

That’s changing. Median household disposable income in Anacostia, for example, is $24,000, inching toward the District average of $36,000, according to the economic partnership.

And as other areas of the city filled up, development didn’t have anywhere to go but over the river into Wards 7 and 8.

The city helped with tax incentives and promises of moving government agencies to the area.

“The [former Mayor Anthony A.] Williams years, the city became a very effective force for development — the leadership of the city is totally dedicated to transforming the neighborhoods,” said Alan Novak of Lano International Inc., which developed the Mandarin Oriental hotel downtown. He plans to build a 3.1-million-square-foot mixed-use development at Minnesota Avenue and Benning Road in Ward 7. “In the last 10 years, programs have been developed to support that. But it’s still tough.”

Developers say they are interested in fulfilling Ward 7 and 8 residents’ needs.

“We wanted to fill this void that’s in Wards 7 and 8, where people have to go to other parts of the city and Maryland for their shopping needs,” said J. Matthew Ritz, William C. Smith & Co. project manager of the Shops at Park Village, a 25-acre housing and retail development. “They want to keep those dollars in the ward.”

There are early signs of success.

Good Hope Marketplace, a Safeway-anchored shopping center on Good Hope Road Southeast in Ward 7, has had 100 percent occupancy since it opened in 1997, according to Mr. Sellars. It is home to national tenants such as Hollywood Video, Starbucks, Radio Shack and Payless ShoeSource.

“I would like it to have happened several years ago,” Mr. Hopkins said. “We can see the tide is turning, it’s changing as we go up Martin Luther King Jr. Avenue.”

Hurdles still exist

But the wards aren’t going to change overnight.

Persuading national retailers, which typically open stores only in well-established areas, to move into Ward 8 has been a struggle.

“Retailers look at things differently. They’re not pioneers. They wait for things to mature a little,” Mr. Ritz said. “It has been somewhat difficult to make the case to them.”

“There’s clearly some history that has to be overcome in the area, there’s no doubt about it,” said Jeff Epperson, president of Urban City Ventures LLC, who is leasing Poplar Point Place. “This would not be taking place without the energy the baseball stadium is creating. The north side of the Anacostia is spoken for and will get animated. That’s giving some comfort that the proximity will allow [retailers in Wards 7 and 8] to be successful.”

While much has been planned, only a small portion of the projects have started construction and city officials say more must be done.

“We need to bring more retail to Wards 7 and 8,” said Mafara Hobson, spokeswoman for Mayor Adrian M. Fenty. “Among our highest priorities are to bring sit-down restaurants, supermarkets and other retail found in other parts of the city in every neighborhood.”

The 356-acre campus of St. Elizabeths Hospital has been sitting largely vacant since 1987, except for a portion of the District-owned east half of the campus, which still houses a mental hospital.

The General Services Administration plans to move the entire Department of Homeland Security, including the Coast Guard, to the federally owned west half of the campus, according to a spokesman. President Bush’s fiscal 2008 budget included a request to fund construction of the Coast Guard’s headquarters on the site, but Congress hasn’t approved it.

The D.C. Council is scheduled to start hearings today into whether the Anacostia Waterfront Corp. and the National Capital Revitalization Corp. should be abolished. The presidents of both organizations recently left. If the organizations are abolished, their projects — the AWC is one of the groups working on Poplar Point and the Anacostia Metro station development; NCRC is one of the groups working on Skyland and Anacostia Gateway — could hang in limbo.

Ms. Hobson said the Skyland project is among Mr. Fenty’s priorities and added that the city plans to provide $40 million in tax incentives.

“It is one of our highest priorities to deliver on this project,” she said.

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