Time is running out for Hecht's downtown department store.
Once the flagship of the increasingly successful Hecht's chain, the 7th and F Street store is steadily losing money.
The losses cannot continue indefinitely, say Hecht executives, who are growing ever more apprehensive about delays in the Metro Center urban redevelopment project.
Hecht's has been counting on opening a new store at Metro Center in 1985, but the probability of meeting that schedule is diminishing daily. If the Metro Center delays drag on much longer, closing the old store will become an attractive option.
Hecht's executives are not yet threatening to pull out of downtown. But in private conversations and discussions with city officials, they repeatedly stress the limits of the ability of the profitable suburban stores to absorb the downtown deficit.
City officials have come up with an extraordinary plan to buy time for the dying department store. Mayor Marion Barry is offering Hecht's low-cost financing not only to build a new store at Metro Center, but also to redevelop the present Hecht's property on 7th Street.
For the first time ever, the city administration says it is willing to use tax-exempt industrial revenue bonds to finance major downtown development. The mayor promised to seek an unspecified amount of IRB financing for the Hecht properties in a letter written last month and overlooked in the pre-primary election rhetoric.
Barry noted that the delays at Metro Center "have been damaging to both our objectives. The District acknowledges that the Hecht Company has suffered considerably as a result of these delays which Hecht's had no part in causing."
The hangup at Metro Center, of course, is the dispute between the city's Redevelopment Land Agency and developer Oliver T. Carr over how much the Metro Center land is worth. When the two could not agree, RLA decided to break off negotiations with Carr and invite other developers to bid on the lucrative tract. That's when Carr went to court.
The site of the proposed Hecht's store is not at issue in the lawsuit now pending in D.C. Superior Court. The developer and the city long ago agreed on the price of the Hecht's site and a second parcel atop the Metro Center subway complex. But they cannot agree on the price of a third parcel. Understandably, the Carr company is not willing to begin work on the first two parcels and thus weaken its bargaining position on the third.
A final decision in the case is months -- perhaps years -- away. Ultimately, it won't make much difference to Hecht's which developer gets Metro Center, because the District government is committed to including a new Hecht's store in the project. But long delays threaten the present store, as the mayor acknowledged in his Sept. 9 letter to an executive of the May Department Stores Co., owner of Hecht's:
"I recognize that a timely relocation of Hecht's to the Metro Center redevelopment project is essential for its remaining a downtown retailer," the letter said.
To keep Hecht's downtown, Barry not only pledged to support low-cost financing for construction on both the old and new Hecht's site, but also offered incentives. He said he would consider widening Sixth Street and changing maximum building size rules to permit construction of a 130-foot high building on the present Hecht's site.
The aid offered to Hecht's is certain to prove controversial. Architectural preservationists are already pressuring Hecht's to save at least part of the present store and are likely to object to the mayor's concessions. A plan to use tax-free IRB financing to build a parking garage next to the Ballston Hecht's store in Arlington produced intense criticism about government subsidizing business. Congress is threatening to outlaw or limit the use of revenue bonds for such projects.
Objections will come too from those who say the downtown Hecht's is a victim of miscalculations by both the city and the store management. Metro Center redevelopment has been in the mill for years and is by no means the only District urban renewal project to be snarled. By spending its capital budget on more profitable suburban expansion, Hecht's allowed the downtown store to slip past the point where it can be operated efficiently.
None of these objections should stand in the way of a solution that will assure the prompt construction of a new downtown Hecht's. With 1,200 jobs at stake for the city and millions of dollars of sales at risk for Hecht's, neither can afford to fail.