Two decades after its opening, the Capital Beltway at long last is becoming the Washington area's Main Street.
The bulldozers have knocked down the trees on a hillside just west of the Beltway, and soon the first signs of the gigantic, $550 million Tysons II shopping center will emerge.
A short distance away, just south on the Beltway at the Arlington Boulevard interchange in Fairfax County, road crews are building the entrance to Fairview Park, a massive $600 million project that someday will include 18 office buildings, a hotel and two lakes.
Real estate developer Hubert N. Hoffman has spent $50,000 to erect a 5 1/2-story sign heralding his long-touted plans to construct a 35-story art deco office building in Alexandria alongside the Beltway and the Eisenhower Avenue Metro station. Calling the building "Washington's only skyscraper," Hoffman promises that construction will start soon.
Travel the Beltway into Prince George's County and the view is the same: The once pristine forests at the Beltway interchanges are coming down and towers of glass, steel and concrete are sprouting as new testaments to the enduring stability of the Washington area's economy.
With such vast construction, the conclusion can easily be drawn that the Beltway is no longer just a commuter thoroughfare and a busy stretch of interstate highway for travelers heading to New York or Florida.
A new study by the Metropolitan Washington Council of Governments, commissioned by The Washington Post, shows that from 1979 through the end of last year a total of $832.6 million worth of commercial projects were started within roughly a mile of either side of the 66-mile-long Beltway. Highway Lined With Firms
Last year alone, with the recession of the early 1980s only a memory and with interest rates relatively low, developers started $290.6 million worth of construction along the Beltway, 82 percent of it in Fairfax.
If the Beltway were a city, its commercial construction in 1984 would rank alongside the totals for Milwaukee ($294.8 million), Birmingham ($299.4 million), Baton Rouge ($288.3 million) and Honolulu ($265.3 million).
The overall construction during the 1979-1984 period translates into 17.6 million square feet of new office space, retail stores, hotels, educational and medical facilities, and research and development plants -- roughly the equivalent of rebuilding the world's largest office building, the Pentagon, five times over.
The survey showed that the bulk of the construction -- more than 10.1 million square feet -- has been for new office buildings, and more than 7.3 million square feet of that has been in Fairfax.
A total of $480.8 million of the construction has occurred in Fairfax, $256.6 million in Prince George's County, $48.9 million in Montgomery County and $46.3 million in Alexandria.
The figure is relatively low in Montgomery because most of its Beltway area was already developed into residential communities when the interstate highway was opened in 1964, and the bulk of its corporate commercial development has been channeled along I-270 to the northwest.
Alexandria has a relatively small strip of land just inside the Beltway that it has started to transform from industrial uses into office parks.
The Council of Governments study also shows that as America's corporate giants flock to establish Beltway footholds from which they can garner lucrative federal contracts, more jobs will be created. A total of 178,271 people worked in the proximity of the Beltway in 1980, a figure that is expected top 233,000 by 1990 and to exceed 287,000 by 2010.
The Beltway already is lined with hundreds of high-technology firms, most of them churning out information or developing new systems for one government task or another. High-Tech Firms Open
In a study last year for the Greater Washington Research Center, development economist Gail Garfield Schwartz found that while some companies here are performing scientific and technological research for new products, most are taking existing technological know-how and adapting it to various uses. Much of the work done for the Defense Department falls into this category, she said.
Such high technology-based functions are commonplace at Beltway firms. Where cows grazed 20 years ago at Fairfax County's "downtown" of Tysons Corner, the Visa credit card operation each day now logs more than 10 million credit checks for card holders and electronic financial transactions among banks.
Meanwhile, United Airlines answers 15,000 to 20,000 calls daily for information and reservations from throughout the country. In Prince George's, another Beltway firm, a subsidiary of the Grumman Aerospace Corp., helps operate a scientific research satellite that collects data on solar flares.
The development of the Beltway as more than just a road has brought vindication to early believers in its potential -- and has made them rich, as well. Plans for Skyscraper
Hoffman, a genial self-promoter who sports dress shirts with monogrammed French cuffs, bought 70 acres of swampland near the Alexandria-Fairfax County line in 1958 for $260,000. "I thought the Beltway was coming through," Hoffman said, "although I had no concrete knowledge. Some of my friends told me I'd lose my fanny."
Now the Beltway bisects his property, a Metro station is perched in its midst, his remaining 40 acres of land are valued at $16 million, and two office buildings, a Holiday Inn and other improvements are assessed at $38 million.
"We're building Washington's only skyscraper on this dog of a site," the 64-year-old Hoffman said with a laugh. "The Beltway right now is what I always expected it to be -- Washington's Main Street. More than 100,000 cars pass by here daily. If you don't think that's Washington's Main Street, show me another street with more. With Metro, it gave us an unparalleled location with the confluence of the Beltway and the subway."
Alexandria Mayor Charles E. Beatley Jr. predicted that Hoffman's development will be the precursor of other office construction along the Beltway. "Industrial uses can't make it down there," he said. "Fortunately, the commercial development in Alexandria doesn't impact on residential areas. I'm gambling my political future" on promoting commercial office development and other similar facilities.
Perpetual American Federal Savings Bank, the Washington area's largest savings bank, is one firm that moved its headquarters from the District to Alexandria by the Beltway. Although his office overlooks a scrap yard, Perpetual board Chairman Thomas J. Owen is not disappointed.
"I don't think it's a bad place at all," he said. "The work force at a place [like this] has to weigh the free parking here against the amenities of shopping and restaurants downtown." Investments Pay Off
The Chiles family of Virginia had to wait even longer than Hoffman for its return on Beltway land, but then no one had envisioned an interstate highway system or a Capital Beltway when Earl N. Chiles, a miller and a merchant from Natural Bridge, Va., came to the Washington area in 1924 looking for an investment.
He acquired 1,317 acres of land nine miles west of Washington in exchange for $50,000, a mill and other properties he owned at Gilmores Mills, a rail stop near Natural Bridge. Part of the land had served as Camp Alger, a military training center during the Spanish-American War.
Chiles died in 1974, but one of his sons, John W. Chiles Sr., 69, recalls driving in a Model T that overturned because the roads leading to the site were so bad. "They were just horse paths," Chiles said.
At the time, Lee Highway was unpaved west of Falls Church, and Arlington Boulevard (Rte. 50) did not exist. It was built in 1936, neatly slicing through the middle of the Chiles property.
The elder Chiles held on to most of the property as the Washington area slowly developed, but he did sell 44 acres to the Melpar firm in the late 1940s, 170 acres in the early 1950s for a housing development that became Broyhill Park, and 38 acres that was developed into Fairfax Hospital. The Virginia highway department paid $625,000 for 37 acres of the Chiles property for construction of the Beltway, with the amount set by a condemnation court after the state thought Chiles' demand for $500,000 was too much.
Since Chiles' death, John Chiles, as one of the executors of his father's estate, has disposed of the remainder of the land, selling it chunk by chunk for millions of dollars, with the proceeds going to the elder Chiles' wife, who is still living near Natural Bridge, and Chiles' seven living children and their heirs.
"This was valuable property, no doubt about it," Chiles said. "He bought it and acquired it to leave to his family. His philosophy was, 'Don't leave money, but leave them something to work with.' The great thing my father left me was the job to settle this estate. It's been the experience of my life."
Now, in addition to the hospital, Melpar and Broyhill Park, the one-time Chiles property includes two schools, a church, parkland, a large Mobil Oil office building, the national headquarters of the American Automobile Association, apartment buildings, land for the embryonic Fairview Park office and hotel development and land at the southwest corner of Rte. 50 and Gallows Road, where the Prudential Insurance Co.'s real estate arm has started construction on still another office and hotel project. Road Called Lifeline
Prudential's $200 million Willow Oaks Corporate Center may not be adjacent to the Beltway, but Robert Merbler, the company's general manager for real estate investment, said the highway nonetheless "means accessibility and visibility" for the 8,000 employes who some day may work at the facility and the corporations which locate there.
"You can see our site from the Beltway," Merbler said. "You can get downtown very quickly or to Tysons in five minutes. The risk is that it's not an established market. Gallows-50 doesn't yet have the identification as Tysons."
Major developers have also joined the rush to build along the Beltway in Prince George's, often regarded as the unwanted stepchild when entrepreneurs have decided whether they want to locate in Montgomery, Fairfax or Prince George's.
McCormick Properties Inc., a subsidiary of the namesake spice company, is building a 230-acre office and research and development park at Landover Road and the Beltway that by 1991 may include 30 to 40 buildings, including a hotel, according to marketing manager Bob Allnutt.
A division of the Lockheed Corp., which helps monitor satellite data at three Beltway locations; USA Today; the Digital Equipment Corp. and the U.S. Postal Service have offices in the Inglewood park's first five buildings.
"The reason we're here is that we think this area is going to develop," Allnutt said.
"The whole Washington area is growing. Prince George's has not been where the development action has been.
"The Beltway really seems to be the lifeline of this area. You can get where you want to. How far is Baltimore-Washington airport? How far is downtown? It's a matter of minutes, not miles."
Craig Burton, a vice president for Coakley Williams, which is developing the Maryland Trade Center Park at the Beltway's interchange with the Baltimore-Washington Parkway, said the firm was "scared to death when we opened out here. There just wasn't a proven office market."
However, the firm has leased all of a 16-story, 200,000-square-foot building, leased more than half of a second building, opened a Holiday Inn and hopes to start construction on a 19-story office building this summer. Office Space Boosted
"Without the Beltway, these buildings wouldn't be here," Burton said. "We're finding more and more people are interested."
Still, nowhere is the change brought by the Beltway more pronounced than at the congested Tysons Corner area that is best known for its regional shopping center, but which is an area that boasts more office space than any city in Virginia.
Part of the reason for that is a group of four men -- Gerald T. Halpin, Thomas F. Nicholson, Rudolph G. Seeley and Charles B. Ewing Jr. -- who since 1962 have turned 563 acres of dairy and cattle farmland into the $400 million Westgate and Westpark office complex. The developers have constructed 50 buildings, and more than 100 companies call it their workaday home.
"The Beltway really revolutionized this town," Nicholson said. "It's the most important artery . . . . People ask, 'How far are you off the Beltway?' "
Still, as Halpin said, the mere advent of the Beltway did not necessarily presage vast commercial development. "It takes people to start something," he said. "People took risks. Most of this land at one time was in a master plan for residential."
James T. Lewis may be the ultimate Beltway risk-taker. He has five office buildings in the Tysons area and has started construction on a $300 million complex of three architecturally distinctive curving office buildings immediately behind the Marriott Hotel. Because of their location, Lewis says, the 17-story buildings will provide the highest above-elevation views in the Washington area.
At the same time, the 52-year-old Lewis has started planning to develop the Bay of Americas residential and commercial project along the Beltway and the Potomac River, just east of the Woodrow Wilson Bridge.
It is hard to dispute Lewis' simple conclusion: "I've probably got the two biggest projects on the Beltway." CAPTION: Map, COMMERCIAL CONSTRUCTION AROUND THE CAPITAL BELTWAY; Chart, EMPLOYMENT AROUND THE BELTWAY; Pictures 1 and 2, Developer Hoffman with model of 35-story art deco building; $50,000 sign marks building site in relation to the Beltway and Metro. Photos by Douglas Chevalier -- The Washington Post