Region's Builders Rein In Visions

With Real Estate Downturn, Projects Scaled Back, Scrapped

The real estate boom had long since burned a gilded path through Bethesda, Tysons Corner and Arlington. Now it was Springfield's turn, and up stepped a developer with a vision of creating a cosmopolitan oasis out of a disheveled 10-acre patch beneath a highway interchange.

Midtown Springfield, the developer said, would bring luxurious apartments, a hotel, a supermarket and an office tower, embodying "the best in the modern downtown living experience." Gone would be a discount wine shop, Holiday Inn Express and commercial buildings that seem trapped in a 1970s time capsule.

Now the project is dead, another casualty of the real estate market downturn, one that's forcing new residential building permits in the region to their lowest levels since 1991.

As construction cranes soared across the metropolitan area over the past decade, an economic renaissance flourished from the burgeoning sprawl of Manassas to the industrial banks of the Anacostia to the once-blighted corridors of downtown Washington.

Yet with the housing market staggering and lenders tightening credit lines, civic leaders and developers are scaling back ambitions and dramatically altering -- if not killing -- vast projects.

"People are going to have to adjust their expectations about what future development will look like," said Peter Tatian, a senior research associate at the Urban Institute. "We're in a different period than the beginning of the decade, which was marked by extremely rapid economic growth fueling a very high-flying housing market. Now we've come back to a more normal situation."

Even before the economic downturn, builders began to rein in their visions. Developers in 2006 halted a plan to build a posh community of condos in North Bethesda known as Canyon Ranch.

Since then, more developers have canceled or recast projects. Or they are allowing their land to lie fallow, waiting for a revived market.

Just outside the Capital Beltway in Prince George's County, farmland that seemed ripe for development remains vacant as a builder seeks to withdraw from a deal to put up 2,000 homes. In Manassas Park, promises of a new town center featuring condos have been scrapped and replaced by more modest rental apartments.

And on Route 50 in Loudoun County, some civic leaders fear that economic turbulence will defer plans for turning the highway into an inviting gateway to their world, one lined with shops and cafes and offices.

"It's like a traffic accident with the rubber-necking -- everybody has slowed down," said Douglas Jemal, a developer who has postponed plans to build an office building across from the Washington Nationals' new stadium.

"You're taking a harder look before you go into the ground right now," said Jemal, among the leaders in the rebuilding of the District's downtown Seventh Street corridor. "Anyone who tells you different is lying."