Retirement Home Site Tempts Developers

The Armed Forces Retirement Home wants to lease some of its grounds to improve its revenue stream. Three teams remain in contention for the right to build a mixed-use development.
The Armed Forces Retirement Home wants to lease some of its grounds to improve its revenue stream. Three teams remain in contention for the right to build a mixed-use development. (By Gerald Martineau -- The Washington Post)

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By Dana Hedgpeth
Washington Post Staff Writer
Monday, November 20, 2006

It's a 272-acre property on high ground in the middle of the District. The owners want to develop part of it, and developers, real estate brokers, architects and contractors are just about salivating to get their hands on it.

It's the Armed Forces Retirement Home, a U.S. government facility once known as the Old Soldiers Home, and the government is looking for a developer to turn 77 acres of its grassy campus along Irving and North Capitol streets NW into a mixed-use development. Last week, about 100 real estate professionals came to hear an official from the home describe what they were looking for.

"We want a place that has a locally owned coffee shop, a drugstore or a boutique grocery store like a Whole Foods or a Trader Joe's," Timothy C. Cox, chief operating officer of the home, told the crowd. "Maybe a ladies' boutique or a shoe shop on the ground floor with residential and office space on the second floor. We don't want a big box like a Kmart or Target."

This summer the government narrowed its list from 12 development teams that applied to redevelop the 77 acres to three: Crescent Resources LLC of Charlotte, JBG Cos. of Chevy Chase and Clark Realty Capital LLC of Bethesda. Their competing plans have not been made public.

Retirement home officials expect to choose one by early next year. The winner will have to go through planning and zoning approvals, and construction would probably start in 2008.

The property is home to 1,300 veterans. Officials at the home said there's an opportunity for them to increase its revenue if they lease part of the grounds to a developer.

"You're three miles from the U.S. Capitol, with easy road access and spectacular views," Cox said. "We've been closed off with a fence around us, but we don't want that. Our land is our greatest asset so we want to create an independent revenue stream by leasing it so we benefit from continued ownership."

The home, funded by fees and a trust fund, wants to use the rental income to pay for such improvements as a new roof, renovations and an expanded area for veterans with Alzheimer's disease.

It currently leases buildings on the property to a charter school, offices of the Smithsonian Institution and the Army Corps of Engineers. Cox said the Special Olympics and Ronald McDonald House have expressed interest in leasing space in the new development.

David W. Jacobs of JBG said the property presents an opportunity to develop what some call a hole in the middle of the city.

"Where else do you see 77 acres so close in?" Jacobs said. "It's an amazing, special place and developing part of it is a unique opportunity. It's got views, great location and a serene pastoral feel."

Donna Fitzgerald Shuler, co-president of Answer Title of the District, said she wants to see small- and disadvantaged-business owners involved in the project's development.

"We want to be a part of this," she said. "The city is changing and finding new land is unique. D.C. doesn't have a lot of undeveloped spots. It's very important to utilize it correctly."

Grumbling About Garages

The District's decision to build above-ground parking garages near the new baseball stadium in Southeast, as Washington Nationals owner Theodore N. Lerner wanted, is drawing criticism from local developers. Some who own land in the neighborhood and planned projects there say the garages will deaden the kind of activity that was expected at the stadium entrance.

"It's an unfortunate solution," said F. Russell Hines, an executive vice president of Monument Realty LLC, which plans to build up to 2 million square feet on two properties it owns across from the proposed parking garages at Half and N streets SE. "Our development would be better if there was complimentary retail and a mix of uses on the other side of N Street.

"It's not a disaster . . . but this is a significant setback," he said. "We spent months and months of great plans of what this area was going to look like with the Anacostia Waterfront Corp., and in the end it feels like it's every man for himself. We're going to do what we can to create an area where people come off the Metro and they walk along the streets, where there's restaurants and stores and a real experience."

Daniel Ellis, assistant director of development for Faison & Associates LLC, said: "In terms of urban streetscape and design you'd prefer to have parking garages not taking up two full blocks. Ideally, you'd want to see something else besides parking on the ground floor. You want it wrapped with retail so activity continues down toward the stadium."

Faison is involved in two projects at nearby First and L streets SE: a development of 200 condominiums and a 263,000-square-foot office building.

Some developers in that area expressed dismay at how the Lerner parking deal got the city to override planning and zoning regulations that required retail on the first floor of projects in the area.

"We have a vision for Half Street SE between M and N streets Southeast that has the potential to be one of the most exciting neighborhoods in the mid-Atlantic, but that vision won't happen if the process looks like the one that produced two parking garages," said Jeffrey T. Neal, a principal of Monument Realty. "There's a better solution . . . than two parking garages. Let the private sector do it. There are zoning laws already in place."

But not everybody thinks that the parking structures are such a terrible idea.

"It's not going to be good, bad or indifferent," said Ronald Cohen, a Rockville-based developer who plans to build 840,000 square feet of condominiums and apartments near the stadium. "It would have been nice to have buildings lining the parking but there's so much activity and energy in that corridor that it doesn't make a heck of a difference one way or the other."

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


© 2006 The Washington Post Company

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