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Skepticism reigns in SE over construction start of new Skyland Town Center

By Derek Kravitz
Washington Post Staff Writer
Monday, August 16, 2010

The long-awaited redevelopment of one of the largest commercial properties east of the Anacostia River is inching its way to fruition, buoyed by approval by the District's zoning commission last month.

But after eight years of delays and legal issues, when Skyland Town Center will open -- and whether retailers will fill it -- is anyone's guess.

Developers hoping to break ground on the $260 million Skyland project, which will go where a dilapidated shopping center stands, saw a glimmer of hope last month when zoning officials approved their ambitious plan.

But the city's use of eminent domain to purchase Skyland's 18 acres, bordered by Alabama Avenue and Naylor and Good Hope roads in Southeast Washington, is still playing out in D.C. Superior Court. Several lawsuits against the city are pending on appeals, and one attorney for landowners is threatening a suit on constitutional grounds. Also, developers must secure financing for at least 280,000 square feet of retail space and more than 450 condominium units planned for the site.

Construction has been tentatively scheduled to start in 2012, with a potential opening in 2014.

"We feel as comfortable today as we've ever felt," said Gary D. Rappaport, whose McLean-based Rappaport Cos. is the lead developer on the mixed-use Skyland project. "If the District could gain control of the land, we'd start construction today. The market is changing every day. It's getting better every day; 2011 could be a great year to really move it forward."

Years of waiting

Residents began pushing for Skyland's makeover in the late 1980s. In 2002, then-Mayor Anthony A. Williams (D) tasked the now-defunct National Capital Revitalization Corp., a publicly chartered economic development firm, with purchasing the shopping center and several additional parcels.

A 2005 U.S. Supreme Court ruling on eminent domain, which allowed local governments to force property owners to sell to make way for private economic development when it would benefit the public, gave the District additional legal footing to pursue the complicated Skyland deal. (The city also used the tactic to acquire land for Nationals Park.) But Skyland languished, even as government tax incentives encouraged construction of a $14 million housing development, the Homes at Woodmont, which was intended to attract young professionals.

The U.S. Department of Housing and Urban Development said in 2005 that the District could not use federal funds to purchase the property because it had mismanaged past development grants. By 2007, the NCRC had come under criticism and was shuttered, and a five-member team of developers, led by Rappaport, took over the Skyland project. By then, the recession was further slowing progress.

"There were a few mistakes made that caused this whole thing to get sidetracked," said D.C. Council member Kwame R. Brown (D-At Large), who lives in the Hillcrest neighborhood near Skyland and whose campaign platform for council chairman has emphasized economic development in wards 7 and 8. "But I'm optimistic we're going to get there," he said.

Skyland's stakeholders said it was frustrating that the city planned for and built the $611 million Nationals stadium, which involved negotiations with about 30 landowners, in about three years. The battle for Skyland is stretching into its eighth year.

If it's built, will they come?

The shopping center consists of five clusters of nondescript buildings with faded green awnings connected by a vast parking lot. This mostly residential section of Southeast Washington has been defined by enclaves of poverty and crime but is also known for its attractive, established neighborhoods, such as Hillcrest.

Tenants include Discount Mart, a coin laundry, beauty supply shops, a sporting goods store and fast-food drive-through eateries. Some of the storefronts have been boarded up and are vacant, but most do steady business.

"Look around: This area can't handle what they want to build here. People want this place to be fixed up, not turned into something they can't afford," said Sammy Franco, 57, who has owned Discount Mart on Alabama Avenue SE for nearly 35 years.

A developer-paid, multimillion-dollar community benefits package, including money for improvements to nearby schools, libraries and parks, did little to satisfy residents who say they worry the new shopping center will fail to attract more and better retail options, such as sit-down restaurants and a big-box store, without pricing them out.

Others say after eight years of delays and false starts, Skyland's redevelopment is not inevitable.

"I won't believe it until they actually start the work," said Karen Williams, president of the Hillcrest Community Civic Association. "But if they can pull it off and give us the shopping center they promised, then that's good enough."

Rappaport insists that an anchor tenant, possibly a Target or Wal-Mart, will commit to the project if the city gets ownership of the land. But Wal-Mart is eyeing a site in Northeast, and both companies say publicly they are unsure whether they would locate a store at Skyland.

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