By Annie Gowen
Washington Post Staff Writer
Thursday, September 21, 2006; B05

The expanse of land just south of the 14th Street Bridge in Arlington -- with its sweeping view of the Potomac River and monuments -- is one of the most coveted pieces of undeveloped land left in the region.

Officials in Arlington County have long been convinced it should be a park, their park, perhaps the last chance to snatch a rare swatch of Washington's dazzling riverfront for the county.

Last year they appeared close to realizing that dream, inking a deal with a local developer to acquire the seven-acre swath of land just east of Interstate 395 in an unusual swap.

Before the sale was final, the county moved ahead with plans to put the main building of a $135 million sports complex there. An airy, glass-walled swim center and health club, it would overlook a wildfowl preserve and acres of new soccer fields. They even hoped to sell the naming rights to a big corporation, taking advantage of the site's prominent location -- where a half-million drivers pass by daily.

But the deal has fallen apart -- another victim of the region's flagging real estate market -- raising questions about the future of the sports complex, known as the North Tract. It has been delayed more than two years and is $40 million over budget for its first phase.

County Manager Ron Carlee said yesterday that the purchase negotiations have simply hit a snag. He said the county is so committed to getting the water-view property that it will buy it outright -- or move to seize it through eminent domain.

A court would then decide whether the land could be taken for a public use and how much it is worth. The owner, Monument Realty of Northwest Washington, is asking about $45 million, more than twice its assessed value.

"This project is very visible and it's a big deal, but the underlying issue is straightforward: It's about fair market values in a changing market," Carlee said.

F. Russell Hines, executive vice president of Monument Realty, said the firm backed out of the deal because of the downturn in the local condominium market. Monument was to pay $25 million and swap its prized water-view parcel for a five-acre county tract a few blocks south, where it would build a 600-unit condominium building.

The company decided to pull out of the deal last week after several months of negotiation, Hines said.

"The market has changed substantially in the last year and a half since we cut this deal," Hines said. "We said, 'Look, this can't go on forever. We're going to terminate the contract.' "

But, he added, "We're not going to hang up the phone on them. We can certainly keep talking."

In recent days, Arlington Republicans made the failed land deal an issue in the county board race, and other citizen activists have argued that it could mean further delays and added cost to a project already estimated at $135 million -- and climbing.

"By the time we get through full design and construction inflation, I will be surprised if it's not more than that," Carlee said.

In 2004, the county officially launched plans to build the sports complex on 28 acres of reclaimed industrial land north of Crystal City. When complete, the complex will have a 200,000-square-foot aquatic center with a diving tower and three pools, four lighted soccer fields, basketball courts and a fitness center, where the county's large number of young professional residents can sweat before banks of glass windows and a calming, watery view.

County voters approved a $50 million bond for the first phase of construction. That estimate has risen to $90 million in the last two years, officials said, largely because of higher costs of steel, concrete and petroleum.

When the county engineered the land swap with Monument Realty, it redrew the plans to move the main building north to the land the county still hopes to buy. The new drawings show a graceful concrete-and-glass structure reminiscent of a clamshell with a swooping metal roof.

"They told the design team to give them world-class architecture, and that costs," said Wayne Kubicki, a Republican and a member of the North Tract Design Advisory Committee.

That redesign delayed the project by six months and cost an estimated $225,000 in design fees, according to Erik Beach, the North Tract project manager for the county.

Kubicki said, "I find it very curious that the county spent appreciable funds on a design for land they never owned and now seemingly can't buy."

But Carlee said the county will buy the land and may be able to offset its cost by selling other land it owns to another developer.

The hoped-for world-class sports complex would be the first thing people see when they drive south from the District into Arlington, so the county should not miss its chance at this "gateway," Carlee argued.

"We're making a decision that defines what Arlington looks like for the next 50 years," Carlee said.