Commercial Real Estate Report
A Neighborhood Rises at The Yards
Monday, May 28, 2007
In the next couple of weeks, workers will begin burying sewer lines, paving streets, sinking street lights and planting hundreds of trees as they lay the infrastructure for a $2 billion development on a 42-acre industrial tract along the Anacostia River.
Empty brick warehouses where torpedo tubes and gun barrels once were assembled will be replaced by stores, offices, restaurants and lofts. Junkyards, car-repair shops and abandoned homes will gradually give way to hotels, government office buildings and a five-acre park along the waterfront. A former lumber shed will become a restaurant pavilion for residents as well as fans who will come to the $610 million baseball stadium that the District is building for the Nationals -- the anchor for the area's redevelopment.
"You really can create a neighborhood, and that's exactly what we're doing," says Deborah Ratner Salzberg, 54, president of Forest City Washington. "We are building . . . an active waterfront that will transform an entire section of this city."
Forest City is the chief private investor in The Yards, the development that will take up almost half of the 90-plus acres along the waterfront around the stadium. The plan is to get The Yards' streetlights and sidewalks ready for baseball's Opening Day next spring; then build or rehabilitate more than 25 buildings and fill them with 1.8 million square feet of office space, stores, businesses, restaurants, and residences.
"I grew up in Cleveland and know the impact that cleaning up a polluted river and lake had on the economy of a city," Salzberg said. "I know the importance of waterfront and what it can add to a city in terms of recreational use."
The Yards has been in the works since 1999, when the federal government began asking private companies if they were interested in developing the largely dormant area next to the U.S. Navy Yard -- land the government had controlled for 200 years. The deal went to Forest City, which is purchasing the land in phases.
Over the years more than 30 public agencies and community groups became involved, including various historic preservation groups, the General Services Administration, the Transportation Department, the Navy Department, the National Capital Park and Planning Commission, the D.C. Water and Sewer Authority and the Anacostia Waterfront Corp. "It's hard to imagine any place in America with a more complicated set of issues around a property," said Stephen Goldsmith, chairman of Anacostia Waterfront Corp. "You have to have the right set of political and business skills to get through something as complicated as this."
People who have worked with Salzberg say she is well-suited to lead the public-private effort.
"Deborah is good at putting together a consensus or coalition of city agencies to agree on a particular task," said Mitchell N. Schear, president of Vornado/Charles E. Smith, who has worked with Forest City since 2001 on Waterfront, a mixed-use development in Southwest. "I have been to many meetings with D.C. community groups, where Deb would sit and answer question after question for many hours. Some people were aggressive, and she handled it with grace and dignity."
Others say she can be both firm and cooperative. "I remember attending meetings where she would literally cut someone off and say 'That's great, but we don't have time for that,' " said Joshua B. Bernstein, president of Bernstein Management and a friend of Salzberg. "She is focused on the goal and wants to get to the goal. She doesn't want to get sidetracked."
Victor B. MacFarlane is managing principal of MacFarlane Partners, which has a 25 percent stake in The Yards. He recalled a point when his firm had a disagreement with Forest City, which owns the rest. After meeting with Salzberg, he recalled her saying there had been a miscommunication and then being willing to concede.
"I have been on both sides of the table with Debby," MacFarlane said. "I much prefer to be on the same side. "