2 Jurisdictions Challenged Potomac Yards Developer

Just south of Crystal City, a Charlotte-based developer is taking a huge parcel of land that was once a railroad yard and turning it into a $2 billion complex of housing, retail stores and office space.

Crescent Resources LLC, a subsidiary of Duke Energy Corp., is taking the lead on the Potomac Yard project, 300 acres that straddle the Arlington County border and the city of Alexandria. It paid Commonwealth Atlantic Properties Inc. $125 million for the land in March 2001 and has since been working to clean up the contaminated soil, get approvals to build, and install sewer and water lines and streets.

The site was a switching yard for the Richmond, Fredericksburg & Potomac Railroad from the 1830s until the early 1990s. Crescent's project, when completed over as many as 15 years, will contain two 600-room hotels; a 25-acre park; several thousand townhouses, condos and single-family homes; 4.7 million square feet of office; and 235,000 square feet of shops and restaurants. In May, the U.S. Environmental Protection Agency signed a 10-year lease for two office buildings at Potomac Yard.

The following is a question-and-answer session with Daniel B. Kohlhepp, regional vice president of the mid-Atlantic region for Crescent Resources.

Q Why did you want to buy the property?

ACrescent Resources wanted to enter the Washington market. We wanted to go to a new, higher level of development. We've done suburban office parks in North and South Carolina, Georgia, Arizona and Texas. But this is a whole new level in terms of the size, the dollar amount and the attention.

What have you done to get the site ready to build on it?

The most important thing we had to do was get the site plans approved for development in both Arlington and Alexandria.

How difficult was it in dealing with two different jurisdictions?

It's been cruel and unusual punishment. Everything is called a different name in each municipality. In Alexandria, for example, they called our project plans a coordinated development district; Arlington called the same thing a PDSP -- a phased developed site plan.