A classic, high-stakes land-development battle involving private land speculators and powerful congressmen is now underway that will directly influence expansion of the Capitol complex and the fate of one of the last and choicest undeveloped neighborhoods on Capitol Hill.
The cast of characters includes House Speaker Thomas P. (Tip) O'Neill Jr., the architect of the Capitol, the District of Columbia's largest downtown developer, former D.C. Mayor Walter E. Washington, the city's Redevelopment Land Agency (RLA) and neighborhood activists intent on preserving some of Washington's historic, post-Civil War homes.
The prominent participants and the historic location give an added dimension to a dispute that in other ways differ little from the land-use battles that are commonplace in the affluent suburbs of Washington and everywhere there is undeveloped land.
The immediate battle is for three undeveloped lots -- totaling nearly six acres -- located directly south of the Capitol in an area that has been an unsightly jumble of freeways, railroad tracks, power plants and parking lots.
By the standards of suburbia, where mammoth shopping centers are erected on sprawling 100-acre tracts, six acres might not seem like much.
But in development-crazed Washington, where millions of dollars in real estate fortunes have been reaped from the sites of former slums, the relatively small area immediately south of the Capitol is suddenly attractive to developers, historic home preservationists and Capitol planners -- three groups with sharply differing views of the neighborhood.
For developers, the three lots, which are now used for parking, represent potentially lucrative multimillion dollar real estate deals. They would like to transform the sites into a cluster of office buildings and a hotel complex that could trigger massive redevelopment of larger areas nearby. Already, further south, towards the Anacostia River alongside the Navy Yard, plans are underway for a $330-million Capital Gateway redevelopment project.
To Capitol Architect George M. White, who is on the verge of completing a long-awaited master plan for development of the Capitol complex, the three lots are crucial to any future expansion of House office buildings. "All the various alternatives . . . include some movement to the south. And we think [the three lots] ought to be in the hands of the federal government in order to preclude private development taking place on them . . .," White said in an October 1979 appearance before the House Subcommittee on Public Buildings and Grounds.
Preservationists, many of whom also live in the fashionable late 19th century townhouses along New Jersey Avenue and E Street SE, fear that either commercial or congressional development would change their neighborhood's primarily residential character and could endanger the future existence of their homes. "The choice is between . . . either [developer] Oliver Carr's pyramid temples or the temples of government. I don't know which one I like least," said Maurice Rosenblatt, who lives and works as a lobbyist in a five-story townhouse at 421 New Jersey Ave. SE.
Carr, Washington's biggest and most successful downtown developer, and several other private investors own one of the lots. The other two are owned by the city's Redevelopment Land Agency.
So far, the winner in the dispute is the architect of the Capitol. At the request of White, Congress voted late last month to purchase the three lots at a cost of $11.5 million as part of a Capitol grounds bill that added parts of 22 streets and sidewalks to congressional jurisdiction.
The bill, approved in the hurried, final days before the current election recess, sailed through both houses of Congress. It encountered only brief opposition to the land purchase section of the bill during earlier committee hearings.When the House Public Works Committee attempted to shrink the cost to $3.5 million by taking the two RLA lots out of the bill, Speaker O'Neill stepped in and sided with the architect, who lobbied for all three lots. O'Neill threatened to kill the entire bill unless it contained all the lots.
The committee, bowing to the wishes of O'Neill and White, kept the three lots in the bill. President Carter signed the bill last Saturday; now it awaits almost certain congressional appropriation of the $11.5 million.
The Carr group's land is between Ivy and E streets SE, off Canal Street, across the street from the National Democratic Club, a private dining and drinking spot that was formerly the Rotunda restaurant. The partnership, which includes Carr, A. James Clark, president of George Hyman Construction Co., one of the nation's largest construction companies based in Bethesda, and the former owners of the Rotunda restaurant, Henry and Ermanno Prati, planned to build a four-story office building and underground parking garage costing more than $11 million.
Now, under the land purchase bill, plans for the office building will be dropped and Congress, using its condemnation powers, will buy the land from the Carr partnership. Congress' purchase will not be a total loss for the Carr partnership, which will receive $3.5 million, more than three times what it cost to assemble the parcel more than six years ago. "We really wanted to build a building as a secured investment. We're not a speculative land organization," said Carr project manager Philip S. Brown. sOfficials of the Carr partnership have already said they will ask for more than the $3.5 million Congress is offering.
The two RLA lots, one block west of the Carr site, are split by Interstate Rte. 395 where it joins the Southwest Freeway. The larger tract runs from Canal and D streets SW to the freeway and the smaller one extends from the freeway to Second Street SW, across the street from a former FBI building that is now House Annex No. 2.
One developer, Charles M. Fairchild, who has already built the Marfair Office Building at 499 South Capitol St. near the Carr and RLA parcels, has long been seeking to purchase the larger of the RLA lots to erect a hotel and office complex there. "I wanted a hotel to serve the House. Right now, if a constituent of yours said, 'Gee, I want a hotel room [near the House]', . . . they have nowhere to go," Fairchild told the House Subcommittee on Public Buildings and Grounds.
To help drum up support for his proposal, Fairchild dispatched to the Hill his influential lawyers, former Mayor Washington and ex-Rep. Teno Roncalio (D-Wyo.), former chairman of the subcommittee. But in the end Congress rejected Fairchild's plan.
Although the legislation calls for immediate purchase of the lots, architect White acknowledges that possible congressional expansion on the land is many years away -- a fact that has drawn strong criticism from the developers and other critics of the purchase.
Use of the Carr lot for a House office building is 50 to 75 years away, according to Elliott Carroll, White's executive assistant. The RLA property could be developed sooner, possibly within the next five to 15 years, Carroll said. Congress is expected to use the land for parking lots in the meantime.
Rep. Norman Y. Mineta (D-Calif.), chairman of the Public Works Subcommittee on Oversight and Review, questioned whether Congress should be in the business of stockpiling land for possible future use without definite plans for the sites. "I'm not sure we ought to quote 'landbank,' especially when we don't have a master plan," Mineta said.
"To purchase land that you're not going to develop for 50 to 75 years, that's an extraordinary development," said David Childs, an architect and chairman of the National Capital Planning Commission, a federal agency that reviews development in the District. "It's probably a little far reaching. You don't know what the market value is going to be."
But Carroll, defending the plan, said the Carr land had to be bought now because the developer was on the verge of beginning construction. He said the decision to buy the RLA land was prompted by the agency's intention to sell it to privae developers, if Congress did not take it. It is cheaper to buy the lots now than to wait until after buildings are erected, Carroll noted.
Congress has approved paying the District $8 million for the two RLA lots. But the purchase will eliminate the land as a potential source of nearly $2 million in yearly real estate tax revenue for the District, according to a hypothetical example of minimum commercial development on the sites prepared by a District tax official. Federal property cannot be taxed.
Congress is unlikely to compensate the city for the lost tax revenue by making an equivalent increase in its yearly financial supplement to the District, according to Robert Moore, director of the city's Department of Housing and Community Development, which supervises the RLA lands. "We lose all the way around," Moore said.
Carroll said the proposed congressional purchase is reasonable. It is the first since the early 1970s and will not seriously affect the District's tax revenues, he said. "The fact that the [federal] government is here brings in a whopping amount of revenue to the District of Columbia," Carroll added.
There are also aesthetic reasons for the purchase.
"The environs of the Capitol should be protected from commercial development," White told Congress. ". . . There are many [other] areas in the city that can have commercial office buildings."