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Few Places Left for Industrial Business

By Dana Hedgpeth
Washington Post Staff Writer
Monday, August 28, 2006

Finding space in the District to do dirty jobs is getting harder and harder these days.

The boom in office, housing and retail development that started in the late 1990s has pushed developers to pay ever-higher prices for land where used-car lots, tire shops and cement plants once were, according to a study by the District's Office of Planning.

That's leaving a shortage of space for light industrial work as land is rezoned for development that produces higher rents.

The industrial sites provide the kind of necessary but unglamorous services needed to run a city, including places to park Metrobuses, sort and recycle trash, repair cars, and sell auto parts.

"This place is gone," Destin St. Charles said, wrench in hand, as he repaired a car at his shop near New York Avenue and Bladensburg Road NE, where development is encroaching. "That's it. There's no space in D.C. for businesses like us."

The study identified 2,390 industrially zoned acres in various areas of the District, including neighborhoods along Metro's Red Line near the Rhode Island Avenue, Fort Totten, Brookland and Takoma stops; the area north of Union Station known as NoMa; New York Avenue and Bladensburg Road NE; and near the site of the new baseball stadium in Southeast.

City planners say land values around the new stadium, for example, have spiked from $6 a square foot for industrial property to as much as $50 a foot and in some cases around $100.

The study found that only 5 percent of the District's 43,850 acres is zoned for industrial-type uses. San Francisco, a city of comparable size and one that has a sizable white-collar economy much like the District's, has 13 percent of its land in industrial use, the Office of Planning said.

"We've lost many square feet over the last five to 10 years to economic development," said Ellen M. McCarthy, director of the Office of Planning.

About 450 acres of industrially zoned land are facing development pressures or have already been redeveloped for new, more upscale buildings. That includes the rezoning of 242 acres around the new baseball stadium near the Anacostia River. And little new land is being zoned for industrial uses.

District agencies and the private sector are expected to need about 100 acres of industrial-type land in the coming years, according to the study. But some developers say that there is decreasing demand for such space in the District and that businesses are instead expanding such operations in the suburbs.

Planners suggest adjusting zoning laws to make some areas strictly industrial or having office, retail and industrial businesses co-exist in some areas. Some of the recommendations are expected to be incorporated in the District's comprehensive plan, which is being revised.

The ideas have brought interest from many tenants in the District who rent space for industrial-type operations.

St. Charles has run his auto repair shop near the corner of New York and Bladensburg for three years but will probably have to move because the owner of the land is selling the property to developer Jim Abdo, who is planning a mega-development of shops, restaurants and housing.

Before he moved to Northeast, his shop, D.S.C. Auto Repair, was on Ninth Street NW. "They kicked me out of there when the new convention center came," he said.

"We had to move. Now they're saying a shopping center is better than more cars here, and they're saying it's better than my piece of junk," St. Charles said, pointing to a banged-up car.

Next door to his shop, another mechanic agreed.

"It's not just hard to get a license, it's hard to find the space," said Alpha Sesay, who has had his garage in Northeast for seven years.

Near the auto repair shops on Bladensburg Road, family-owned A&R Auto Parts is finding it hard to stay in the area and is likely to move its wrecked cars and auto parts -- fenders, engines, transmissions, power-steering pumps -- from the three acres it now occupies to locations in White Plains, Md., and Fredericksburg, Va. (It's not a junkyard, the owners are careful to point out to visitors. A refrigerator is disposed of in a junkyard; the salvage yard is where parts are recycled, they say.)

"I see it as inevitable," said Richard Ackerman, whose father started the salvage yard on Bladensburg Road 57 years ago. "Things change. We've been here for so long. It's not unreasonable to think this area will be developed."

His 80-year-old mother, Muriel, chimed in. She and her husband, Robert, who is 91, stopped in to lend a hand for the day. "They want to clean it up," she said of Abdo's plans. "I don't blame them, but they're putting too many people out of business. . . . They want to fix up the gateway to the Capitol. I guess they want to pretty it up."

Abdo, who is buying 16 acres at New York and Bladensburg, including where the Ackerman salvage yard and the auto repair shops sit, calls the land underutilized. His plans call for 3.5 million square feet of development, with condos and a grocery store.

"I have a problem with maintaining industrial land on visual corridors of the city," Abdo said. "I think it's a mistake to maintain those if there's a higher and better use, like housing, retail."

In Southeast, just a half-block from the new baseball stadium near South Capitol Street and Potomac Avenue SE, a concrete plant is facing traffic backups on narrow streets littered with large potholes, as dump trucks haul dirt from the huge pit workers are digging to build the ballpark. The plant's landlord probably will redevelop or sell the site, forcing a move to Maryland.

"It's just a hassle trying to get around with all the development," said Reginald Gillis, a manager at Superior Concrete Materials Inc.

An Unsolicited Bid in Southeast

District-based developer Monument Realty put in an unsolicited bid to Washington Metropolitan Area Transit Authority to try to get control of roughly a half-acre at the corner of M and Half streets in Southeast Washington, near the new baseball stadium. The half-acre is worth about $14 million, or $80 per buildable square foot.

The developer owns much of the land that surrounds the WMATA site, which is a parking lot. Monument Realty wants to move forward quickly to build on the site and improve the Navy Yard Metro stop there at the same time.

Closings

· ING Clarion of New York paid $14.4 million for the 45-room Morrison House Hotel in Old Town Alexandria. The company plans a $1.9 million renovation of guest rooms and the common area.

· Developer Fifield Cos. of Chicago paid $13.4 million for an almost eight-acre development site in the Dulles Corner office park in Herndon. Cassidy & Pinkard Colliers represented the seller, Penzance Properties.

· Boston Properties has started construction on the last spot of land at Reston Town Center. It is building South of Market, an 860,000-square-foot complex of office and retail. The developer recently signed a 50,000-square-foot lease with NII Holdings Inc., formerly known as Nextel International.

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

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