A Transformed Neighborhood Awaits Stadium
Monday, August 15, 2005
Money is on the prowl at M Street and New Jersey Avenue in Southeast, looking for opportunity as plans for a new baseball stadium two blocks away steadily advance.
Tenants in the neighborhood known as Near Southeast -- a car mechanic, a small cab company, an after-school program for kids at risk of getting into trouble -- look out their windows and watch. They watch as two 14-story buildings -- one for a hotel, the other for co-ops -- rise amid barren lots, shoved against an abandoned two-story building, crowding out an open-air drug market. They know that glam will not be denied, and that they are in the way.
A city-led redevelopment effort started to transform the decrepit patch south of Capitol Hill in the late 1990s, but it was the 2004 decision to place the Washington Nationals' baseball stadium in the neighborhood that launched a full-scale land rush. And the explosion of development that has surrounded MCI Center in Chinatown provided an enticing blueprint.
"They give such a hard time to everybody around here to try to get them to sell," said Davood Mirzaiee, a mechanic, talking about developers on the hunt as he fixed a cab's front end alignment. He bought a small lot at First and K streets SE last year for $250,000 and built a repair shop, calling it A-1 Tires Alignment Auto Service. In the last six months, he said, he's gotten a couple of offers from developers -- one who said he was willing to pay as much as $1.5 million for Mirzaiee's lot, about the size of a large two-bedroom apartment.
"I just started my business, and I want to do business here," Mirzaiee said. "Why should I leave because all of this is coming?" he asked, throwing a greasy hand in the air toward the $110 million hotel and co-op project a block away. "I built this place, and now they want to kick me out." He said he wants to stay because he believes it's a good location and his business will thrive as the development arrives.
The first pitch in the proposed baseball stadium is at least three years away, the ceremonial groundbreaking as yet unplanned, but the tantalizing prospect of a stadium has already set off a land rush.
"This area is on fire," said Tim Temple, who owns Splash carwash near the corner of South Capitol and I streets, four blocks from the proposed stadium, and is considering at least two offers -- one for approximately $8 million -- for his land and a neighboring lot.
"Everything's going," said Temple, who bought his lot in 1978 with $164,001 he got in the settlement of a motorcycle accident. "We've got Congress on one side and the stadium on the other."
Marty Chernoff, a longtime landowner based in Denver, recently sold about two acres near First and I streets SE -- an area roughly the size of two football fields -- for more than $40 million. He owned some of that property with a partner, Leonard Greenberg, chief executive of Bethesda-based Greenhill Capital Corp.
Chernoff said he paid about $1.55 million for the land, which he began acquiring in 1987 when most investors saw only blight in Southeast, and kept buying after the real estate crash of the late 1980s.
"It's a hot time in the old town tonight," Chernoff said jokingly. "There's a lot of buyers and not much supply. It's the old economics rule of supply and demand. As the demand goes up, so does the price.
"Baseball is a big part of what's driving it," he said. "It's the realization that this will be an upscale, quality neighborhood where you're close to Capitol Hill and close to the new stadium."