The preeminent real estate project in the nation’s capital will not be home to one of the country’s preeminent retailers, Apple.
Hines Interests, the Houston-based developer behind the $1 billion downtown CityCenterDC project, said Tuesday that Apple had pulled out of negotiations to open a store there, a setback to plans to make the development a destination for high-end retail.
For more than a year, the developer and the tech giant discussed opening a showcase Apple store in a prominent storefront — construction of which is nearly complete — that takes up the entire side of a building facing what will be a public plaza along New York Avenue, giving it unobstructed downtown views.
The deal would have given Apple a downtown presence possibly akin to the store Apple opened in 2011 in New York’s Grand Central Station.
But Apple withdrew from negotiations last year, according to Howard Riker, managing director at Hines, who is overseeing the project. He and the company declined to comment further.
Apple did not immediately return an e-mail requesting comment. The company currently has one D.C. store, in Georgetown, as well as six in Northern Virginia and three in the Maryland suburbs.
Apple’s withdrawal marks a rare black eye for the CityCenter project since Hines began construction on it in the spring of 2011 with the backing of $650 million from Qatari Diar Real Estate Investment , the real estate investment arm of the Qatar Investment Authority, Qatar’s sovereign wealth fund.
After starting construction, Hines landed the law firm Covington & Burling as an anchor tenant and leased most of the rest of the office space to tenants including the Qatar Foundation International, a nonprofit educational group, which will open a 15,188-square-foot office and cultural center there.
About a year after it began selling the project’s 216 condominiums, designed by Foster and Partners and listed at prices ranging from $600,000 to $3.5 million, about three-quarters of them are gone. Hines has also begun renting the project’s 458 apartments.
Built on the site of the District’s former convention center, CityCenter is an economic development initiative a decade in the making for the D.C. government, which owns the land and leases it to Hines. In December, 10th Street NW reopened through the site for the first time in 34 years.
The project still has the opportunity to remake downtown D.C. as a regional shopping destination the way it was a generation ago when Hecht’s, Garfinkel’s and Woodies all had stores there. All six buildings in the project’s first phase have retail space on all sides, for a total of 185,000 square feet. A future phase calls for a hotel and more retail along New York Avenue.
With Apple out of the project and little chance for negotiations to resume, Riker said Hines has returned to an earlier merchandising plan for the project that calls for one or two high-end restaurants to occupy the space facing the new park.
Capital Business is The Post’s weekly publication focusing on the region’s business community.