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D.C. Makes First Land Deal at Skyland

Some Owners Vow to Fight Redevelopment of Shopping Center in Southeast

By Debbi Wilgoren
Washington Post Staff Writer
Sunday, April 10, 2005; Page C06

The District's publicly chartered development corporation has signed its first deal to buy land at Skyland Shopping Center, a run-down strip mall in Southeast Washington that the city wants to replace with a larger complex anchored by a Target store.

The National Capital Revitalization Corp. agreed to pay $2.39 million for a two-acre parcel that houses a postal sorting facility. The land is owned by an affiliate of the Anacostia Economic Development Corp., which bought it for $1.1 million in 2001 but did not develop it.

Skyland Shopping Center, at Good Hope and Naylor roads SE, has been targeted for redevelopment for years. One difficulty is that its parcels have 16 owners. (Rich Lipski -- The Washington Post)

City officials have talked for years about buying the 18.5-acre site at the confluence of Alabama Avenue and Good Hope and Naylor roads SE and creating a suburban-style complex that would include national retailers and at least one sit-down restaurant.

Residents of the leafy Hillcrest, Fairlawn and Penn Branch neighborhoods, all nearby, say they desperately need such amenities, which are rare in the District east of the Anacostia River. But past redevelopment efforts have foundered, in part because of the difficulty in assembling parcels controlled by 16 owners.

"This is the first concrete step towards revitalization," NCRC spokeswoman Peggy Armstrong said. "Until now, we've just been getting ready."

Several of the landowners and merchants have said they do not want to sell or move shops they have operated through some of the city's bleakest years. Some have filed lawsuits, or threatened to, to stop the city from seizing property by eminent domain if purchase efforts fail.

But NCRC officials, under pressure from Mayor Anthony A. Williams (D) and several D.C. Council members, have pledged to make the project happen.

"The residents of east Washington deserve this kind of shopping experience," said Anthony Freeman, chief executive of NCRC, which was created five years ago and charged from the beginning with tackling the Skyland project.

D.C. Council member Vincent C. Gray (D-Ward 7) applauded Friday's purchase agreement but pointed out that the owner of the parcel -- unlike some others at Skyland -- had never opposed selling.

"It's not going to be as easy with some of the other landowners," said Gray, an advocate of the project. "But it's an important step. Psychologically, it sends a signal to people that things are moving."

NCRC has chosen developer Gary Rappaport to build the shopping center. Rappaport, who has developed retail complexes throughout the region, said he has a commitment from Target to locate there but cannot negotiate a lease until NCRC controls the land.

NCRC recently increased the projected cost of buying the properties, relocating businesses and doing environmental cleanup to $48.8 million, up from a 2003 estimate of $33 million. Freeman, who took over the organization last summer, said the lower number was overly optimistic.

The corporation has budgeted $35.5 million for those pre-development costs, mostly from the sale of land it owned near Union Station. Freeman said the corporation will try to trim some costs and is continuing to explore additional financing options, including seeking District or federal subsidies and additional investment in the project from Rappaport.

He said the shopping center will be a financial success if it captures a quarter of the $404 million that residents of the District's eastern sectors are believed to spend in the suburbs.

All 16 property owners received purchase offers from NCRC in February. Armstrong said the corporation is close to a deal with a second major Skyland landholder and hopes to have agreements in place by November to take control of the entire site.

But Elaine Mittleman, an attorney for several property and business owners who filed a lawsuit in July to try to stop the redevelopment, said her clients "just simply don't want to sell."

"They want to stay in business," she said.

The sales contract for the postal site is contingent on environmental and federal reviews and must be approved by the NCRC board. It is supposed to close within 60 days.

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