One of the city's last prime undeveloped waterfront areas close to downtown could be transformed this decade into a modern community of new stores and shops, hotels, parks, recreational facilities and housing for 5,000 people under a proposal being considered by the District government.
The Capitol Gateway Corp., a company owned by the multibillion dollar Dravo Corp. of Pittsburgh is nearing final approval of development plans for a 50-acre site in Southeast Washington between South Capitol and M streets, the Navy Yard and the Anacostia River.
If approved by the city, the project will be one of the largest developments involving District funds. The area now is a hodgepodge of warehouses, small industrial companies, rundown row houses and little-used lots.
The proposed development reflects the city's interest in revitalizing its dilapidated areas near downtown and its long-ignored waterfront properties. Several high-rise office buildings, a racquet club and town houses are planned or under way near the South Capitol Street corridor. Real estate agents describe nearby town houses as "Capitol Hill South." A future subway station is to serve the area as well.
The development represents "really an unequivocal plus to the city," said District planning director James O. Gibson.
Noting that the site is the District's "largest single mass of underutilized land" in the near Southeast area, Gibson said that the city will benefit from an increased tax base, more jobs, more housing and new tourist attractions. It is estimated that the tax benefit from the area will increase from $219,000 a year now to more than $11 million annually.
In addition, Gibson said, the project will spur redevelopment of some of the remaining cluttered under-used tracts in near Southeast. The city already owns much of the site and will acquire the rest through its powers of eminent domain.
The proposed development site is less than a mile from the Capitol. The Southeast Federal Center lies to the east, with the Southwest urban renewal area, a public housing project, and Fort McNair to the west. Buzzard Point sits south and Bolling Air Force base is across the river.
Long one of city's least visited and most neglected sections -- a 1975 planning report called it a "dramatic example of unfulfilled intentions" -- the area has been zoned for industrial use since 1920.
Plans call for the tract to be cleared and rebuilt with about 1,840 apartments and homes, 1 million square feet of commercial retail and office space -- the Tysons Corner center in Virginia, as a comparison, has about 1 1/2 million square feet -- a 500-room hotel, restaurants, and such waterfront facilities as boat marinas.
Twenty percent of the housing is to be for low- and modereate-income families, and housing for displaced persons will be the first priority, city and development officials said.
Under a contract with the city's Department of Housing and Community development, the Capitol Gateway Corp. has prepared the plan for development of the site. If the plans are given final approval by city administrative and legislative officials, Capitol Gateway will be given first right to buy and develop the cleared site from the city.
William T. Hannan, lawyer for the corporation, said it is likely that the firm will exercise its right to buy the acreage and then will sell sections to various developers.
Capotal Gateway's parent corporation, Dravo, is ingaged in heavy construction and manufacturing projects. Dravo has owned more than six acres of the proposed development tract since it bought the Potomac Sand and Gravel Co.
D.C. City Coucilman John Wilson (D-Ward 2), who represents the area, said he is "not very happy" with the proposed development, adding that his viewpoint probably is part of a small minority. Wilson said he is worried that residents will not be relocated promptly and that subsidy money may not be available for one-fifth of the housing units.
Near Southeast residents voiced some of the same concerns at a meeting last week with city and Capitol Gateway officials. Officials answered questions for more than an hour, promising fair market prices for the property the city must acquire, relocation aid to families and businesses, and the participation of minorities in the development. A construction schedule could be put together by the end of the year with relocation of some small businesses within two years.
Some residents expressed skepticism about completion of the project, however, and some said they are worried about traffic problems and the cost to the city for public services.
"We're just not sure that D.C. will wind up with a profit from this enterprise and not a debit," said Gottlieb Simon, executive director of the area's Advisory Neighborhood Commission. "The models they bring are pretty, but the future can be quite ugly . . . We should be very sure the development does in fact serve the public interest."
To cover some of its public costs, the city is seeking funds from the federal Urban Mass Tansit Administration, and the federal Housing and Commerce departments, city and development officials say. Eleven million dollars is included in the city's 1981 budget for acquisition of property in the area, money that the city should recover from the sale of the property to a developer.
Officials promised residents that public hearings will be scheduled soon on the proposed development.