The neighborhood around the District's historic rail hub, Union Station, is poised to become one of the city's next construction hot spots, but it's a quirky building spurt.
The development boom is taking place on federal land in the shadow of the U.S. Capitol and -- in a series of unusual transactions -- federal officials are inducing private companies to develop their real estate for them.
Development experts say three projects under way will inject a blast of added private investment into the area, which has seen little development recently despite years of waiting. Two of the projects are still on the drawing-board: a renovation of the huge old Post Office building across First Street NE from the station, and construction of an office building on nearby federal property that will house federal judiciary offices. In both cases, private teams would develop the projects.
The most exciting project -- and the first to be completed -- is the renovation of Union Station. The cavernous 1907 Beaux Arts structure, which had become so deteriorated that rain poured through holes in its 60-foot-high roof, was declared unusable several years ago and was closed.
The new Union Station, expected to open next September after a $150 million renovation to be done by private developers, will contain offices as well as one of the city's largest shopping malls, including 100 stores, two large upscale restaurants and a nine-theater movie complex.
The government is paying about $110 million for the renovation, a new train ticketing area and a huge parking structure, and a private team is spending $40 million to develop the retail complex.
The developers announced yesterday that they had leased about 60 percent of the retail space so far, and that their space does not include an "anchor" store -- a department store or other large retailer that often is seen as necessary to draw customers. The Limited chain will have the biggest store, at 14,000 square feet.
Some skeptics have expressed doubt that there will be enough pedestrian traffic to sustain such a large retail area. But Roy Williams, an executive with the Baltimore-based real estate firm of Williams Jackson Ewing Inc., which is helping to oversee the project, said that while theirs is "still a pioneering concept," it will work.
Williams likened the new Union Station complex to Faneuil Hall in Boston and Harborplace in Baltimore -- down-at-the-heels urban areas that were transformed into extremely successful shopping emporiums. He and his partners worked on them when they were executives with the Rouse Co. development firm. "We're depending on the synergy of 100 stores," he said. "It can equal or surpass the draw of the suburban-type shopping mall."
Yesterday, one of the station's companion projects, the planned judiciary office center, stepped closer to reality, as its federal backers unveiled their plans to Congress.
George White, who as architect of the Capitol oversees the Capitol grounds, is running a competition of five nationally known developers who want to build the $75 million project at Massachusetts Avenue and Second Street NE. The 520,000-square-foot building would house a number of administrative offices and agencies that are part of the Supreme Court, as well as some space for private tenants.
Officials estimated the government would save $1 million a year combining into one structure the court offices now dispersed among 10 or so buildings in the District and Maryland.
Under the deal proposed by White but requiring congressional approval, the selected developer would pay to build the structure and make its money back from the rental of office space to the private tenants.
No private developer has built a project on Capitol grounds, and officials and committee members expressed concern about questions never before confronted, such as how hard a financial deal the government should drive with the developer of a project within sight of the Capitol. Among the unanswered questions is how much the developer will charge to rent the court space.
The last project is to be developed by a partnership of New York-based real estate concerns selected last year by the U.S. Postal Service. The team will renovate the Post Office building -- now mostly empty since construction of a postal facility in Northeast Washington -- into an office-retail complex with a stamp museum. The project has been stalled because of historic preservationists' complaints that two new floors planned for the roof make it too high.