Metro to consider seeking development partners at properties near 11 stations

New real estate projects are popping up on private property around Metro stations in the Washington area, and the transit agency has decided it wants to get in on the act.

Metro’s real estate team plans to propose leasing 11 properties the agency owns at stations across the region to real estate developers in the hopes of generating economic activity for its partner jurisdictions and new revenue for the agency.

Most of the properties are surface parking lots, vacant land, bus bays or kiss-and-ride stops that — as the region’s population grows — could be replaced by new offices, apartments or other buildings along with replacement parking and drop-off facilities.

Stanley Wall, Metro director of real estate and station planning, said he plans to propose seeking development agreements for the properties on Thursday at a meeting of the board’s real estate committee. Metro’s full board would also have to approve the move.

Although many Washington real estate firms are bracing for the effects of federal budget cuts related to sequestration, Washington remains one of the country’s strongest apartment markets. Builders are at work raising new buildings on 14th Street in Northwest Washington, on H Street NE, and in Silver Spring, Arlington, Tysons Corner and elsewhere.

Wall, who founded his own District-based development and consulting firm before joining Metro last year, said private developers had inquired about a number of the sites already and that local elected officials were eager to see progress at some of the locations.

“In large part, we’re just getting a lot of interest on these sites,” he said. “Our jurisdiction partners are interested in making progress with them in terms of economic development, so we are trying to facilitate that as well.”

Of the 11 sites, four are in the District, four are in suburban Maryland and three are in Northern Virginia. In D.C., Metro will consider developing 6.5 acres at the Anacostia station, 5.4 acres at Brookland-CUA, 4.6 acres at Fort Totten and a small chiller plant site near the station by Nationals Park that Wall said the agency would also consider selling once a replacement is provided.

The four Maryland sites are 36 acres at the Morgan Boulevard Station, 25 acres at Branch Avenue, 7.3 acres at Grosvenor-Strathmore and 4.5 acres at Capitol Heights.

The Virginia sites are 11 acres at West Falls Church, 5.1 acres at East Falls Church (part of which Wall said is controlled by the state of Virginia) and two small parcels at Huntington.

Many of the properties were selected, Wall explained, so they could be developed in concert with other projects in the immediate area. In Anacostia, for instance, the Barry Farm public housing complex has been proposed for development near the Metro station. In Fort Totten and Capitol Heights, new Wal-Mart-anchored projects are in the works.

Metro has developed properties at many of its stations in the past. Other projects, such as an apartment complex with a Harris Teeter in Dunn Loring-Merrifield, are under construction now. Metro has agreements in place for future projects in New Carrollton, Greenbelt and elsewhere.

For deals to be struck, developers must agree to build Metro new parking and access facilities. “Any impacted facility has to be replaced, whether it’s a chiller or whether it’s commuter parking or whether it’s daily parking — it will have to be replaced by the developer,” Wall said.

Metro’s real estate unit has sometimes been criticized for playing favorites, such as when the agency modified a development agreement in Greenbelt that allowed Prince George’s County to submit the site as a possible FBI headquarters.

But a demographic return to urban, transit-accessible neighborhoods has increased the value of property in and around Metro stations and Wall said developers had approached the agency about its properties at the Navy Yard, Morgan Boulevard and Huntington stations, as well as others.

Wall said he did not know how much revenue the deals might ultimately bring the agency. “It depends on what the market will bear,” he said.

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