D.C. United stadium deal a long time coming

August 4, 2013

Years before D.C. United had new deep-pocketed owners, and before Vincent C. Gray was elected mayor of the District, Matthew J. Klein was working to get a soccer stadium built on Buzzard Point.

In 2005, developer Akridge, where Klein is president, bought nine acres of industrial property on Buzzard Point with the financial backing of the National Electrical Benefit Fund, for $75 million.

It was three years before the Nationals played their first game a few blocks away, and Klein says he always knew it could take years to build something in the area, surrounded by the walled-off Fort McNair, Pepco facilities, public housing and the Anacostia River.

But he said he considered it a rare chance to buy three city blocks two miles from the Capitol.

“We went into that understanding with our eyes wide open that this was a transitional neighborhood and that development was not going to happen until the next cycle or two,” Klein said.

It is a good thing he wasn’t in a rush. More than a dozen years later, D.C. United has inked a tentative deal with the District to build a $300 million soccer stadium on the site. The agreement requires a number of approvals and the completion of a series of complicated land swaps, any one of which could easily drag out the process.

Akridge did not start out with a soccer stadium in mind. The District-based developer initially branded its Buzzard property 100 V St. SW and started pitching it to the federal government as a place to locate federal offices within a 2.7 million-square-foot mixed-use development.

But after the financial collapse, property values sunk and the federal government pulled back sharply on building new facilities, leaving landowners everywhere waiting and reconsidering their options.

“You don’t generally buy land wanting to hold it for that long,” said Bob Murphy, managing principal of MRP Realty, who is developing an apartment project immediately south of Nationals Park.

When federal leases did become available, they were often awarded to projects located more closely to Metro stations. Doug Firstenberg, a principal of developer StonebridgeCarras, said transit access was a reason other developers backed away from Buzzard Point. “The issue we have with it is without it being Metro-accessible, we think there are some challenges,” Firstenberg said.

Klein worked to address that shortcoming by assuming a spot on a task force — co-chaired by City Administrator Allen Lew — to help expedite construction of a new streetcar system, a line of which is being plotted for Buzzard Point.

Klein never stopped pursuing the federal government. As recently as March, with discussions between Lew and United officials still forming, Akridge suggested relocating the FBI headquarters to Buzzard Point, one of 35 proposals the General Services Administration received.

“We talked about all sorts of federal installations down there,” Klein said.

At the same time, Akridge worked other possibilities. Klein said he began talking with United officials, then led by president Kevin Payne, about using Buzzard Point for soccer more than five years ago. Because the 20,000-seat stadium would only occupy the top two acres of Akridge’s property, it would add value to everything else Akridge tries to do.

Once a stadium deal looked possible, Klein said he abandoned seeking major federal facilities for the area.

“I think the stadium will provide a whole new opportunity to re-plan the neighborhood. It’s going to provide a whole different flair with the sports and entertainment focus,” Klein said.

For its trouble, Akridge would be granted the opportunity to acquire and redevelop the Reeves Building at 14th and U streets NW, as part of one of the contemplated land swaps. “That is probably the best residential site in the city,” said John Sikaitis, director of research for Jones Lang LaSalle.

If the stadium deal is approved, the team could begin its 2016 season on Buzzard Point.

Klein said he has no regrets about the journey so far.

“Given the District’s height restrictions, we tend to grow out and not up, so Buzzard Point will eventually get developed, but it could be a very long period of time. What something like a soccer stadium does is accelerate and shape it in a much more deliberate fashion,” he said.

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