Deal for New York Avenue Wal-Mart store falls apart as Mayor Gray weighs ‘living wage’ bill


A Wal-Mart store. (JESSICA RINALDI/REUTERS)

A developer’s plan to build a Wal-Mart as part of a New York Avenue shopping center in Northeast D.C. has fallen apart.

The big-box retailer now has only five planned stores in the District, three of which are under construction, as D.C. Mayor Vincent C. Gray decides whether to veto a “living wage” bill that the Bentonville, Ark.-based retailer has been aggressively fighting.

Brothers Andrew, Dave and Jerry Schaeffer own more than 11 acres in the triangle bounded by New York and Montana avenues NE and Bladensburg Road NE, where they had inked a contract with a developer to build a shopping center anchored by Wal-Mart.

The developer, Rick Walker, designed a project called Point at Arboretum. The center of it called for a 124,000-square-foot Wal-Mart atop a Lowe’s home improvement store, but Lowe’s opted to instead open a store next to a Costco in the nearby Shops at Dakota Crossing.

Walker attempted to replace Lowe’s with a 65,000-square-foot Burlington Coat Factory store and other stores, but Andrew Schaeffer acknowledged Thursday that his family had terminated its agreement with Walker after the project failed to take shape.

“We terminated the option agreement with him, that’s all there really is to it,” Schaeffer said.

Walker did not give a reason for the falling out, but said he would try to restructure the arrangement. “The opportunity to put it back together again still exists, and that’s something that we will be pursuing,” Walker said.

Another developer could also step in and try to rekindle a deal with Wal-Mart. Grant Ehat, principal at JBG Rosenfeld Retail, the Chevy Chase company that is building two other D.C. Wal-Marts, said he has been trying to work out an arrangement with the Schaeffers.

“We would love to revive the deal if we could find a way to structure an equitable deal with the landowner,” said Grant Ehat, principal at JBG Rosenfeld Retail.

D.C. Council member Kenyan McDuffie (D-Ward 5) said the Schaeffers had told him nearly a month ago that they had terminated the contract. He said he was hopeful that another deal could be worked out for a development that could improve that stretch of New York Avenue, lamenting that visitors from Baltimore Washington International Marshall Airport had to enter the District through an area that has struggled with blight and vacancy.

“It’s the first thing that they see when they come to the nation’s capital,” McDuffie said.

Wal-Mart had vowed not to build the planned three stores that were not under construction, including the New York Avenue store and two stores in the District’s Ward 7, should the “living wage” legislation become law. The provision, which the D.C. Council passed with McDuffie’s support, would require some big-box chains, including Wal-Mart, to pay employees wages and benefits no less than $12.50 an hour.

But Wal-Mart spokesman Steven Restivo said that the chain had not pulled out of the New York Avenue deal. “We are committed to building a store at the New York Avenue site, and will continue to work toward bringing the project to fruition,” he said.

Gray received the billlast week and is expected to decide whether to sign it or veto it in coming days.

Mike DeBonis contributed to this story.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

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