American University's growth causes pains for neighboring businesses

By Derek Kravitz
Washington Post Staff Writer
Saturday, December 11, 2010; 12:18 AM

Morty's Delicatessen, housed in a drab brick building in Tenleytown and known across the District for its hot pastrami and matzo ball soup, was never very profitable. Or glamorous.

Its front window featured a cartoon caricature of its folksy Brooklyn-born manager, Morty Krupin. Its owner, the late philanthropist Cy Katzen, believed in the deli and kept it in business. Its customers, always fearful that Morty's days were numbered, would say that the deli would "go as the neighborhood goes."

So when American University took over as its landlord last year after Katzen died and left the building to the university, Morty's was on borrowed time.

"They didn't shut us down, but they didn't help keep us open either," said Krupin, 71, who is retired and lives in Boynton Beach, Fla. "We weren't in their plans and they are the new boss in town." American officials said they lowered the rent to help Morty's get by, but in the end, the deli just didn't make it.

After 20 years, Morty's closed in early November, unable to make its monthly rent. Residents and longtime patrons say Morty's closure is proof that the university's plans for growth do not include many of the small and long-standing businesses that dot the surrounding neighborhoods. American is too tough with its economically vulnerable and small retail tenants, they say, many of whom are still grappling with the recession.

American officials say the university's faculty and student population is an important source of local financial support.

"Our students, staff and faculty are supporting a lot of local businesses," said Penny Pagano, a university spokeswoman. "When neighbors say they want retail, part of the reason in this economy the retailers are doing as well as they are is because we are there."

In the past few decades, American University, the private research university with two campuses near Ward and Tenley circles, has grown into one of the country's best colleges with a prestigious international service school, a top-notch law school and a reputation as one of the most politically active universities in the country.

But like many other universities, American is also in the business of residential and commercial property management, owning buildings stretching from Massachusetts to Wisconsin avenues NW and north to the Tenleytown-AU Metrorail station. The buildings range in size from the small and aging Brandywine office building near the Metro stop to a 156,000-square-foot steel and concrete building on Wisconsin Avenue NW, which houses embassy and university offices, a public library, a sign-maker and a plastic surgeon.

American officials are working to finish by March a new campus plan, a guiding document that will lay out its growth over the next decade. Among its goals are: building a facility for the Washington College of Law in Tenleytown; luring more students back onto campus from off-campus neighborhoods by adding about 900 beds; and somehow easing traffic at Ward Circle. New facilities will stay on the existing campuses, officials say.

Total student enrollment is expected to climb by more than 3,000, to 13,600, by 2020. However, officials point out that most of the growth will be among graduate and law school students, who tend to shop and live in different places than undergraduates.

"We think American University is right-sized but we want to enhance our facilities," said David Taylor, longtime chief of staff to American's president, Cornelius M. Kerwin. "We manage lots of properties now. It's not foreign to us."

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