Building Slowdown Turns Grand Visions Into Vapor

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Slowed Development Frustrates Communities

The economic boom of recent years launched development across the region. But much of that promise is faltering under an economic slowdown.

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Along Route 1 in Hyattsville, Prince George's County officials for years have talked about turning a strip dominated by car dealerships and warehouses into a version of SoHo, an arts-driven enclave with 500 homes and restaurants and shops on 25 acres.

The developer, EYA, initially planned to complete about 130 homes by early 2009. Although it has built 75 of those units, the developer estimates that its timetable could be delayed by a year. EYA has signed up the restaurant Busboys and Poets and a Thai eatery, but another prospective tenant, Starbucks, dropped out this year.

Aakash Thakkar, an EYA vice president, said company officials are evaluating "how long the economic downturn will take before we put a shovel in the ground" on the commercial component.

The real estate slump was almost unimaginable three years ago, when the number of housing units authorized across the region reached 41,221, the highest level since 1988, Census Bureau records show.

The picture has changed sharply. The number of authorized housing units fell to 16,434 this year, the lowest level since 1991. Commercial building has plummeted as well. Two years ago, construction crews started building 17 million square feet of office space, compared with 4 million this year.

Even projects in flourishing neighborhoods are struggling. In May, Mayor Adrian M. Fenty (D) announced plans for CityCenterDC, a swirl of shopping, condominiums and offices on one of the last vacant parcels in downtown, the site of the former Washington Convention Center, at Ninth and H streets NW. A groundbreaking was slated for January 2009.

But the developer, Hines/Archstone Smith, has pushed back the date and hopes to start construction by July, and maybe not until the end of 2009. That is, if a bank will lend $500 million for construction. "We're putting off looking for financing until after the new year because of the state of the market," said William B. Alsup III, senior vice president in charge of Hines's Washington office.

No neighborhood is immune from the pain, but the stakes are higher in emerging areas, which counted on the boom to lift them to prosperity.

Perhaps no area is more central to the District's long-term ambitions than the streets around Nationals Park. At every opportunity, Fenty talks of a cosmopolitan destination featuring new parks, offices, stylish apartments and restaurants, all of it along the Anacostia River.

Yet, how soon that vision materializes is fraught with uncertainty.

A half-mile from the ballpark, the Corcoran Gallery of Art and developer Monument Realty intended to turn what was once a public school and then a homeless shelter into an art school and apartments. But Monument withdrew in August, as its equity partner, Lehman Brothers, collapsed, leaving Corcoran to find another developer.

Along Half Street SE, the block leading to the stadium's entrance, Monument hung slick black banners promising "a whole new playground" -- new apartments, new dining, new hotel rooms and new shopping. Behind the billboards is a crater that is more than half a city block long and three stories deep.