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Metro advances project to transform New Carrollton

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After more than a year of delays, the real estate committee of Metro’s board of directors approved the outline of a 2.7 million-square-foot project in New Carrollton Thursday, setting the stage for construction to begin on the first phase of the project in 2016.

Metro and the state of Maryland teamed in 2010 on a plan to build as much as 5 million square feet of offices, housing, hotels and retail on 39 acres surrounding the Metro station in New Carrollton. The properties, currently an assortment of parking lots, access roads and vacant land, enjoy access to Amtrak and MARC stations, the Capital Beltway and a future station that would serve as the terminus for the planned Purple Line.

The project could be the largest development in Prince George’s County since National Harbor. But it has not gone according to plan.

Nearly four years ago, Metro and the state picked a development team led by Forest City Washington, the local arm of Cleveland-based Forest City Enterprises, and Bethesda-based Urban Atlantic.

The developers sought a deal to build a headquarters building for Maryland’s housing agency, but the state selected a different site nearby, owned by the Berman family, for that project.

Losing the housing agency deal was difficult, according to Stanley Wall, Metro director of real estate and station planning, because the market for office leases has not fared well since then, making it harder to attract companies to new office buildings in Prince George’s County and elsewhere.

Wall said after the deal collapsed, “the developer, the state and Metro went back to the drawing board to completely revamp the vision.”

In the newly agreed upon plan, the developers envision building 2.7 million square feet, about half of it residential units. The first phase, for which construction could begin in 2016, calls for a four- to six-story apartment building of 260 units with 13,000 square feet of shops on Garden City Drive, where there is currently a surface parking lot.

Wall said it made sense to start with an apartment project because the market for new rentals was much better than that for office space. In all, the revised plan calls for 1,370 housing units, 1.1 million square feet of offices, 150,000 square feet of retail and a hotel.

“We’re not trying to force office into a market where office isn’t necessarily warranted,” Wall said.

Wall and the developers have agreed upon the framework of a deal, in a term sheet. Should the full Metro board approve the term sheet at its Jan. 22 meeting, it would authorize Wall to negotiate a development agreement that would include the price the developers would pay Metro for the land.

The board’s real estate committee also approved a term sheet Metro’s staff has agreed upon with MRP Realty and CAS Riegler to develop a residential project by the Brookland Red Line station in Northeast D.C. That agreement also requires approval by the full board.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz