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Why Northern Virginia’s tallest building is still empty and what it means for Arlington

In Rosslyn, 1812 North Moore Street, is 35 floors and 390 feet high but still empty more than a year after completion. (Photograph by Jeffrey MacMillan )

Tim Helmig is feeling good about where Rosslyn is headed.

The Arlington neighborhood has added dozens of new shops, a half-dozen new restaurants are on the way and more than 500 apartments are going up nearby.

Helmig, chief operating officer of developer Monday Properties, could use some good news. It’s been about a year-and-a-half since Monday and Goldman Sachs completed the tallest office building inside the Capital Beltway, 1812 North Moore. The 580,000-square-foot Rosslyn office tower remade the skyline at 390 feet in the air, but it remains completely empty.

As Arlington and other counties grapple with increasingly difficult budget situations, solving problems like 1812 North Moore is becoming more of a priority.

What went wrong with Helmig’s building? For one, the leasing market dried up just as Monday was completing the building. For another, law firms — which Monday has been targeting as occupants for five years or so — have been using less and less space and have not been willing to jump the river from the District.

Helmig thinks things are improving on both points. His company has seen leasing pick up dramatically on other properties in recent months, he said, including financial firm Sands Capital agreeing to a deal for one of the company’s properties nearby. He thinks law firms are taking a closer look at the building and more government contractors are expanding.

“We have seen a resurgence in the contracting market, not a massive one, but certainly a groundswell of contractors that are starting to get more flow,” he said.

Helmig said he has not considered lowering the rents he’s asking. “Pricing has not been an issue,” he said.

Instead, Monday and Goldman agreed to re-finance a $140 million construction loan, which Helmig said would allow them the time to land a marquee tenant. They are beginning to hold more events there, such as a Greater Washington Board of Trade event March 18, which allows the developers an opportunity to show off the building’s stunning views of the Potomac River.

Aiding Helmig in his efforts to fill the building is Victor L. Hoskins, the new director of Arlington Economic Development. In all, Hoskins said about one-quarter of the county’s 40 million square feet of office space is empty.

“The next 24 months are going to be critical,” Hoskins said. “Really the next 12 to 24 months we need to develop some momentum on filling up space. That’s what I’ll be focused on. That’s what our business development group is focused on. And that’s not an easy to thing to do.”

If commercial real estate in Arlington loses too much value, it will create budget problems for the county.

“Commercial values for our vacant or highly vacant properties are now coming in lower. And that is a problem. Why is that a problem? When you look at our revenue split, we have a very enviable position in the county. Roughly half of all tax revenue comes from commercial properties and the other half comes from residential property,” Hoskins said.

Last month, Arlington’s county manager proposed a budget that did not include property tax increases. But in Prince George’s County, where Hoskins worked briefly and where the commercial real estate market is even worse, County Executive Rushern L. Baker III proposed a 15 percent property tax hike to pay for schools.

Helmig is hoping his position improves this year. So is Arlington.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz