CityVista developer in talks with Safeway on Petworth grocery-housing project

By Jonathan O'Connell
Monday, August 23, 2010

The developer behind of one of the District's more successful recent condominium projects is nearing a deal with Safeway to bring a 210-unit housing and grocery store development to Georgia Avenue, in the Petworth neighborhood.

Marc Dubick of Los Angeles-based Lowe Enterprises is wrapping up negotiations after partnering with the grocery chain to develop the 685-unit CityVista condo, apartment and retail complex in Mount Vernon Square. Despite its completion in 2008, just as the economy was falling apart, all of CityVista's 441 condos have sold or gone under contract and few of its apartments have not been leased.

While working on CityVista, Dubick co-founded a new development company, Duball LLC, and is looking to work with Safeway again, this time on a mixed-use project that would put 210 housing units atop a new 50,000-square-foot Safeway at 3830 Georgia Ave. NW. The Pleasanton, Calif.-based grocer currently has a 47-year-old store there.

Dubick, who left Lowe on June 30, said the success of CityVista, built on a vacant property that once housed a wax museum, shows that a grocery store has the ability to help create a neighborhood around it and that he was eager to find another deal like it.

"I'm a huge believer in what Safeway brings to the table in a state-of-the-art facility," Dubick said. "Especially in an urban environment, the chance to live directly across the street or in close proximity [to a grocery store], it's terrific."

Reston-based Duball, with Dubick at the helm, also recently developed one of the most high-end condo projects in the region, the 158-unit Lionsgate, in Bethesda, where units sell for around $1 million. Dubick said the Petworth development would have two levels of underground parking and could be designed either as apartments or condos, depending on the housing market. Needed zoning changes are likely to require at least a year. "We'll see where the world takes us," he said. "Whatever it will be, it will be high-end, top-quality housing."

Safeway, which has more stores in D.C. proper than any other grocer, has been updating its properties to fit its "lifestyle" format and has come under pressure from residents and D.C. Council member Muriel Bowser (D-Ward 4) to do the same at its Petworth store, which lacks a bakery, deli counter or florist, much less a climate-controlled wine cellar stocking 2,500 bottles or an open-flame hearth oven, as the chain put in its remodeled Georgetown location earlier this year.

Bowser said the store was "in desperate need of replacement, and the community has wanted to replace it for many, many years."

"People expect to have the best of the best there, like the lifestyle stores that they see in other neighborhoods," she said.

The new store will be more than twice the size of the current one. "The bottom line is this continues our emphasis on improving our store base within the District of Columbia," said Safeway spokesman Craig Muckle. "We've made improvements to virtually every store in the city and unfortunately this is one of the last ones."

Safeway had considered other developers as partners on the site before the housing market slide began. One of the companies to take a look was Donatelli Development, the Bethesda-based firm that built Park Place, the 161-unit apartment tower a block south of the Safeway atop the entrance to the Georgia Avenue-Petworth Metro station. Park Place is 99 percent leased, and Donatelli has begun construction on a second building across the street.

"We have been pleasantly surprised with the demand for our apartments at Park Place, and I think the whole neighborhood from Georgia Ave to 14th Street is really seeing a lot of improvements," said President Chris Donatelli.

Donatelli said the history Dubick and the Safeway team have together would serve them well. CityVista cost $260 million and took eight years from when the two first teamed on a plan. "I think the fact that they're working together like this hand in hand is a big advantage," Donatelli said.

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