Mt. Vernon Triangle Edges Upward

The area wasn't always ripe for development.

In the 1950s and 1960s, it had many mom-and-pop retail shops, a Ford dealership and a meat store. One of the main attractions old-timers remember fondly is a wax museum at the site where the CityVista project is now being built. But by the mid-1980s, the area had become rundown as businesses moved outside the District.

"It was a depressed area when we came here," George Sigalas said. His father, a Greek immigrant, owned the Hickory House, a restaurant on Pennsylvania Avenue that sold "90 different deli sandwiches," including the pastrami and corned beef popular with tourists. Sigalas says that that property was taken by eminent domain for the revitalization of Pennsylvania Avenue, and the family moved the restaurant to the building at Fifth and K in 1983.

George said they paid $371,000 for the building where the gentleman's club is and $850,000 for another across the street a few years later. Real estate brokers said the properties may now be worth 10 times that much.

They tried to run a full-service restaurant, George said, but "the area just couldn't support it." So they turned it into a strip club.

"There were a lot of homeless people burning stuff in barrels in the winter when we moved here, parking lots and it had an element of crime. It got to the point where we lost business because people were afraid to come to the area."

As developers have bought land in the last few years, preservationists have earmarked buildings in the area that they believe should be saved from demolition. Some property owners, including the Sigalas brothers, say they are worried that historic designations could put restrictions on what developers can build and lessen what they'll get for their properties.

For now, the brothers have no deal to sell. They say they are waiting for the right offer -- and to see whether the prosperous new neighbors patronize their strip club.

"Once people are living in this area, it will be a viable business, but that's not until another two years," George Sigalas said.

Bud Holder doesn't plan on staying.

His father-in-law started the 6&K Auto Market, a used car lot at the corner of Sixth and K streets NW, 50 years ago, and he's helped run it for the last 37 years. But the business has declined in the last five to six years, he said, as developers have bought most of the neighborhood's parking lots, auto repair garages and abandoned buildings. Gone are the days 20 years ago when he sold 100 to 125 cars a month.

Holder welcomes all the new development, saying, "It's for the better." Like other landowners, he's finding that rapidly rising property taxes are making it more attractive to sell. In the last year, he said his property taxes on the small corner lot have gone from $9,000 a year to $28,000.

"I figure we're going to have to go eventually," Holder said from his dark-paneled office, looking out through bars on the windows to his tiny lot. "I'd like to get out soon," said Holder, 61. "This is prime real estate, right on K Street NW."

In the meantime, he's not buying many cars to sell. The other day there was just one car on the lot -- a gray 1998 Chevy Malibu with 23,000 miles. He'd sell it to you for $5,500.

Closings

· The U.S. Army picked two companies -- LCOR, a developer, and Weston Solutions Inc., an environmental services firm -- to build a $300 million training facility at Aberdeen Proving Ground where law enforcement officials will be able to train for anti-terrorism efforts. Both companies are based in Pennsylvania. The project will take two years to build.

· Brokers at Cassidy & Pinkard Inc. sold 2800 and 2900 Crystal Drive in Crystal City, two office buildings that total almost 330,000 square feet of space, to a privately held national real estate investment firm that Cassidy & Pinkard did not identify. It also sold 1945 Old Gallows Drive in Tysons Corner, a 163,800-square-foot office building, to an unnamed real estate adviser. The prices for the buildings were not disclosed.

Dana Hedgpeth covers commercial real estate and economic development. Her e-mail ishedgpethd@washpost.com.