D.C. nears total control of Skyland

It is to be the largest real estate project ever built in a District neighborhood east of the Anacostia River, and it is to come at a price.

Neighbors of Skyland Shopping Center — including Hillcrest resident and D.C. Mayor Vincent C. Gray (D) — have been clamoring for the redevelopment of the dilapidated plaza for more than a dozen years.

Located at the intersection of Good Hope Road, Naylor Road and Alabama Avenue in Southeast, Skyland is one of the only places in the area to pick up a prescription or grab a bite to eat. But its lackluster offerings have pushed the city government to extraordinary lengths to upgrade it.

According to a tally by the attorney general’s office, D.C. has issued $28 million in payments to get the original businesses on the site — among them a liquor store, a discount mart and a beauty supply store — to leave.

To remove business owners that did not want to sell, the city used eminent domain to force them out, leading to a dozen court cases beginning in 2005. This cost the city more than another $1 million in outside legal expenses and the use of more than 10,000 city attorney hours.

In 2007, the D.C. Council, with Gray as chairman, approved an additional $40 million in subsidies for the project. Four years later, as mayor, Gray personally requested that Wal-Mart officials open a store to anchor Skyland, suggesting the chain open there or risk its other four selected D.C. sites. The request worked; Wal-Mart is coming.

District officials believe they are now a matter of weeks from having control over all 43 parcels at Skyland, once divvied amongst 16 land owners and 29 tenants. Jose Sousa, spokesman for Deputy Mayor Victor L. Hoskins, said that under Gray, “The project is progressing more rapidly than it has in nearly two decades.”

Skyland’s developers, selected in May 2002, have spent $3 million of their own money and, with the legal issues nearly wrapped up, have begun working in earnest again. Lead developer Gary Rappaport, of McLean-based Rappaport Cos., owns 50 retail properties totaling 11.5 million square feet in the area, but said the personal commitment of Gray made Skyland stand out.

“Of all the projects that I’ve done in my career, this is the most important,” he said.

Along with residential developer William C. Smith & Co., based in the District, Rappaport plans to begin site work in the spring of 2014 with the hope of opening the Wal-Mart and 270 apartments in 2016. The developers ultimately envision a town center with 315,000 square feet of retail and 468 housing units.

There are still obstacles that could delay the project further. The Department of Housing and Urban Development made six findings in December requiring corrective action by the city related to the spending and recordkeeping of $28.5 million in federal funds. Sousa said the city is preparing a response.

Elaine Mittleman, a Falls Church attorney who represented some of the Skyland property owners and tenants in cases against the city, said the city mishandled other paperwork and badly mistreated the original business owners. “I am not trying to stop Skyland, but I want it to be done correctly, and it has been done just totally ineptly,” she said. “It’s just been a joke.”

While the city opted to relocate some of the businesses, including a Murry’s grocery store, an RCN cable facility and a CVS, other owners were forced into destitution, Mittleman said.

“They have treated the property owners unfairly and some of them have been ruined, and there has been no benefit to anybody except for some outside lawyers,” she said.

Rappaport said that without the city’s ouster of the existing businesses, the vision for a Skyland Town Center would never materialize.

“There were so many different owners and tenants and sub-tenants that the city had to find a way to control the entire site, and that and the lawsuits associated with that are what has taken so long,” he said.

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.
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