At Nationals Park, District of Dreams Hits a Slump

A year ago, when Washington's new baseball park opened, there was promise of a lively entertainment district with new offices, condos, shops and restaurants. But the financial gloom and credit crisis is leaving builders unable to secure construction loans.
By Dana Hedgpeth and David Nakamura
Washington Post Staff Writers
Sunday, April 12, 2009

Baseball stadium backers promised a lively entertainment district when the D.C. government poured nearly $700 million into building Nationals Park: a hub of bustling shops, restaurants, hotels, condos and office towers to draw patrons year-round.

But as the Nationals take the field for their second season at the ballpark, there won't be much entertainment outside. In a few weeks, a developer expects to set up a lonely beer tent on an empty lot across the street.

Fans approaching the ballpark along Half Street will pass an empty office building and a 35-foot-deep hole in the ground owned by Monument Realty, which has put plans on hold for shops, residences and a hotel. One block north, another office building, built by Nationals owner Theodore N. Lerner, sits vacant in search of a tenant.

Across the country, development has slowed dramatically and left a ballpark that was once a symbol of the city's hopes a reminder instead of the struggling economy.

"It just so happens that implementation is occurring during the worst economic downturn in recent history. So things are going to struggle a little bit," said Neil O. Albert, the District's deputy mayor for economic development.

City officials and developers say nobody should have expected the area to change overnight. The stadium district is part of a massive redevelopment effort in Southeast on both sides of the Anacostia River, which is projected to take more than a decade. The area around the Verizon Center downtown, officials pointed out, took years to develop into a neighborhood that draws residents and visitors day and night.

Nearly five years ago, the announcement that baseball was returning to Washington set off a land-buying frenzy near South Capitol Street and the Navy Yard.

Investment in the stadium area has been led by the city government. In addition to the ballpark, the city paid for new roads, sidewalks and parks, committing a total of about $1 billion. Metro tripled the capacity of the Navy Yard Station on the Green Line.

That was intended to attract private developers, who rushed in and spent more than $2 billion to build 16 apartment complexes and office towers, including a previously planned headquarters for the Department of Transportation. Speculators and developers, flush with cash, paid up to $125 per square foot for lots with boarded-up storefronts and takeout restaurants that sold Chinese food and fried chicken.

In retrospect, it was too much, too soon, some developers said.

"People's expectations got out ahead of the reality," said Steve Cohen, vice president of real estate for developer Opus East, which has built two office buildings in the area. "We're in a down cycle. People are going to stay on the sidelines for a while."

Inside the ballpark, the Nationals announced recently that they have expanded seating at the Red Porch Restaurant and added new food offerings and entertainment in the Fun Zone. But fans looking out from the ballpark in any direction can see projects that have slowed or stopped.

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