Construction is scheduled to begin next month on a 100,000-square-foot mixed-use town-center development located at the intersection of North Washington Street and West Montgomery Avenue in Rockville.

The first phase of the project will feature a 250-room executive hotel, which will include a 125-seat restaurant and an enclosed swimming pool. A pedestrian walkway will connect the hotel to a four-story building containing approximately 100,000 square feet of office and retail space. The second phase of development will include 650,000 square feet of office and retail space.

Hadid Investment Group Inc. is the project developer, with design by Clark Tribble Harris and Li Architects, PA. Construction is expected to take five years.

Other recent developments in commercial realty in the Washington metropolitan area:

*Blue Cross and Blue Shield of the National Capital Area has purchased a 15.6-acre site at Fair Lakes in Fairfax, where it will construct a 220,000-square-foot building to support its downtown operations.

Fair Lakes is a 620-acre mixed-use project developed by the Hazel/Peterson Cos. and located along I-66 just west of Fair Oaks Mall in Fairfax.

*Arthur Young and Co., an international Big Eight accounting firm, has signed a long-term lease for 120,000 square feet of office space at Washington Harbour, located at 2900 K St. NW.

Cushman and Wakefield represented the tenants, who plan to occupy the complex by December.

*GTE Service Corp. has leased 40,471 square feet for offices at 1850 M St. NW, Smithy Braedon has announced. Manufacturers Life Insurance Co. owns the building.