New Life Above the Union Station Tracks
Monday, October 2, 2006
District-based developer John E. "Chip" Akridge III has closed on a deal to buy 15 acres of air rights above the railroad tracks at Union Station with plans to build a $1 billion mixed-use project.
Akridge paid $10 million to the General Services Administration, which owned the air rights. It is the first time the agency, the federal government's property manager, has sold air rights. Executives at Akridge and the Government Acountability Office said they worked on the complicated deal with Amtrak for four years.
Akridge's tentative plans call for about 3 million square feet of offices, restaurants, shops, condos, apartments and a hotel. The buildings will be on a concrete platform, supported by columns, about 20 feet above the tracks.
An atrium will connect Union Station with H Street NE and the surrounding neighborhood, where new housing and stores have been built. The project will be similar to projects above railroad tracks in Chicago, New York and Philadelphia.
It will be called Burnham Place after the architect of Union Station, Daniel H. Burnham. Akridge executives said they plan to market housing in the project to politicians and aides who want to live near the Capitol and the office space to trade associations, law firms, accountants and consultants.
Completion is years away.
Akridge's project must go through planning and design, then get zoning and other approvals. Construction of the concrete platform is likely to begin in late 2008, executives said, and take about three years. The rest of the project would be built after that.
"It's a once-in-100-year opportunity to be able to develop a site within two blocks of the U.S. Capitol," said Joe Svatos, senior vice president at Akridge.
No End to Office Market
Plenty of capital is scouting for properties to buy in the District. Eyebrows are being raised about the amount of office space under construction in parts of Northern Virginia. And some tenants are leaving the District to take high- quality space for less money across the Potomac.
Those were some of the observations offered last week by developers and leasing and sales brokers to about 100 real estate professionals in an annual conference at the J.W. Marriott hotel. The event was put on by Commercial Property News, a trade publication.
Raymond A. Ritchey, executive vice president of Boston Properties Inc., said he was concerned about the number of buildings under construction -- without tenants in place -- in the Dulles corridor.
"Rather than building a building, lease it and sell it, speculative developers are now attempting to sell the building vacant," Ritchey said. "Buildings are being built in response to the needs of the investor . . . not the needs of the space occupants. As a result there's potential for more vacant space if the tenants don't materialize."