Today it is the biggest investment jewel in the District's fledgling business attraction program. Until two years ago, however, the Design Center was just another empty warehouse that had been sitting idle for nearly two decades.
Nobody wanted it and the District's Redevelopment Land Agency, which bought the building from Terminal Refrigerating and Warehousing Corp. in 1958, nearly forfeited the city's right to the property.
But it was the right building at the right time and at the right place for owners of Chicago's famous Merchandise Mart, who selected the site at Fourth and D streets SW after an extensive search for a metropolitan Washington site.
Patterned after the Merchandise Mart, the Design Center will house 200 showrooms containing residential and nonresidential contract furnishings such as fabrics, wallcoverings and furniture. Eventually, it is expected to become the major regional market center for the design industry.
Although the formal opening won't be held until April, the 420,000-square-foot Design Center already is 85 percent leased. Last week, tenants--all representatives of major furniture and fabric manufacturers--began moving into the center's showrooms, which will be open only to members of the design industry and their clients.
Besides the economic benefits, the Design Center gives Washington a "state of the art and Washington hasn't had that kind of exposure," observed Ronn Jaffe, president of Ronn Jaffe Associates, a Washington interior design firm.
"It certainly will bring new business and a lot of jobs for young professionals who didn't have that opportunity before," added Sandra Ragan, president of Friday Design Group. "I also see the Design Center becoming the hub of the design industry here," Ragan added.
Ragan agreed with Jaffe that the Design Center will make it easier for designers and architects in the region to show products to their clients and that it will help professionals in their attempt to keep up with changes in the state of the art.
The Design Center most likely will attract professionals from Pennsylvania, Delaware and the Carolinas as well, officials said.
It will also become an extension of the retail industry in the area, said Thomas V. King, general manager of Merchandise Mart and president of Washington Design Center. Woodward & Lothrop Inc. buyers, for example, will be able to view an entire line of merchandise at the Design Center and not worry about traveling to New York or Chicago.
Owners of Merchandise Mart decided some time ago that the Washington area would be the regional location for another Design Center. They credit D.C. Mayor Marion Barry, however, with playing a key role in their decision to buy the old refrigerator warehouse in late 1981.
"We decided we wanted to be in Washington, D.C., and then we were fortunate to meet Mayor Barry, who was very supportive in the sense that he wanted both the business opportunity for the District and for us," said King.
By winning the competition for the Design Center, the District attracted a major new industry that is expected to produce at least $3 million annually in tax revenues. In addition, spending by Design Center customers will pump about $20 million into the local economy each year.
Payroll estimates are not yet available, but the addition of 1,000 new jobs will also be a significant factor in the local economy when the Design Center opens.
After paying only $3 million for the property, owners of the Design Center estimate a total investment of $35 million has gone into rehabilitation of the facility and custom designing of its showrooms for tenants.
Through extensive rehabilitation and the addition of 150,000 square feet, the structure has been transformed into a sleek glass and brick facility that could become a model for similar projects in the District. Its value is enhanced by its location at the entrance to the Federal Center subway station, providing quick access to National Airport and Union Station.
"We take pride in this development because I don't think that people really believed that this was a key location," said King. "I think there is no question that the land values in this area have improved.
"Quite frankly, we felt that the District of Columbia was growing in this direction southwest . We could see the development that occurred in recent years."
Design Center officials are studying an option that will allow them to build an addition on part of the parking lot just east of the building.
"It's a market decision and I think at some point we will build an addition," said Stephen E. Smith, president of Joseph P. Kennedy Industries, owner of Merchandise Mart.
The center has attracted widespread interest throughout the Middle Atlantic region. That and the demand for space are viewed as strong indications that an addition may be added soon.
But Smith added that "this is a tough period to be selling space at $20 to $40 a square foot."
Actually, showrooms that contain as many as 25,000 square feet rent for about $21 a square foot. A relatively new concept, called the Idea Center, will enable exhibitors to lease space in 8-by-10 foot display units for $833 a month.
The bulk of display space at the Design Center is reserved for much larger showrooms, however. And that is almost fully leased.
"It's more than an act of faith" that tenants have in the Design Center as a major regional showcase, Smith noted. "It's an act of considerable investment."