Oliver T. Carr, the city's premier developer, has purchased the old Hecht's department store in downtown Washington for $47.6 million and will spend the next two years determining how to convert the ornate property into offices and perhaps condominiums or apartments in the historic district.
The purchase is part of an agreement worked out several years ago between Carr and the May Co., which owns Hecht's.
Under the agreement, the Carr Co. guaranteed to purchase the 10 old buildings that jointly formed the department store at Seventh and F streets NW for at least $18 million.
In turn the Carr Co. and District officials moved Hecht's to a new location in downtown at 12th and G streets. The city owned the land and gave the Carr Co. the exclusive rights to develop it.
Carr, who has been a driving force in the rejuvenation of the western part of downtown and who owns several parcels in the eastern half around the old Hecht's, sees the revitalization of the Seventh Street corridor as a "gateway" to old downtown, according to John Flavin, a vice president for the Carr Co.
The Pennsylvania Avenue Development Corporation (PADC), which is overseeing the redevelopment of the avenue and part of Seventh Street south of Hecht's, has long pushed for housing as part of the redevelopment of the city's old commercial corridor.
PADC Executive Director Jay Brodie called the sale of the old Hecht's buildings "important to our overall plan for that area."
"We have great respect for Mr. Carr and we will be very interested in his plans for those buildings," said Brodie. "Hecht's is situated in a very important position on Seventh Street."
Flavin, vice president for urban development, said, "We have in excess of 1 million square feet of space in that property. We are looking at the full range of opportunities there and residential is one part of the total analysis."
Seventh Street, once the heart of downtown with three of the city's five major department stores, had been declining for about 15 years, crippled by the popularity of suburban shopping malls, the 1968 riots and the subway construction.
Recently, however, thanks largely to the PADC, new development has begun around Seventh Street. Plans by the city and Metro to redevelop the two blocks north of Hecht's have become stalled.
All the building facades along Seventh Street from Pennsylvania Avenue north to I Street NW are protected by the Downtown Historic Zone, according to Kim Hoagland, vice president of the D.C. Preservation League.
But that zone does not include five of the buildings of the Hecht's store that face on E and F streets. Some of the buildings date from the 1850s.
"We have a landmark application in on those buildings but the hearing has yet to be scheduled," Hoagland said. "Our major concern is about usage. We will see what the Carr Co. wants to do."
The Hecht Co. opened Hecht's Greater Stores in 1896 at 515-517 Seventh St. when downtown was both a fashionable residential address and a booming commercial area.
The department store quickly expanded into adjacent buildings and eventually built the granite and terra cotta building at the corner of Seventh and F streets in 1924.
By 1940, the department store filled 10 buildings and had built Washington's first parking garage at the rear of the store at Sixth and E streets NW.
But the area around Hecht's declined as other major department stores on Seventh Street, including Kann's and Lansburgh's, closed and subway construction disrupted other businesses.
Brodie said he is optimistic about the future of Seventh Street as both a residential community and an artistic center.
The Westminster project, under construction at Sixth Street and Pennsylvania Avenue will include offices plus 196 condominiums or apartments, he said.
A block away 225 residential units are planned for Market Square (at Seventh and Indiana) and the old Lansburgh's building will be redeveloped with 200 more housing units, Brodie said.
Gallery Row, three old buildings at Seventh and D streets with intricate brick, metal and granite facades that are now being reapplied to new construction, will be a combination of art galleries and office space, he said.
As part of the Hecht's sale, the May Co. took back a $38 million mortgage, according to Rufus S. Lusk and Son, a real estate publishing company. The Carr Co. identified the other partners in the sale as A. James Clark, head of the George Hyman Construction Co. and lawyer George Beuchert, a former Carr Co. employe.
Carr and Clark, who have been partners in other real estate ventures, are currently trying to bring a baseball franchise to the city.