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JD's State of the Hood, January 2011

Previous Addresses: 2010 | 2009 | 2008 | 2007


It's time again to take a step back from the minute-to-minute piecemeal updating that is a blogger's lifeblood to look at the current state of Near Southeast, and also gaze into the crystal ball at what sort of changes might be in the offing. So, Ladies and Gentlemen, my assessment is that the State of Near Southeast is ... Not Growing, But Still Growing.
It's a fact that launching big new purely commercial developments are still hamstrung by the same commercial real estate malaise lingering over much of the city and the country, and it's also a fact that no big new purely commercial development has broken ground in Near Southeast since 2008.
And yet, this is a neighborhood where the existing residential offerings are now almost completely full (with one exception), office tenant signings are picking up, stalled construction has restarted, and a new beautiful waterfront park will be the focal point of many events and happenings that will draw visitors who aren't just baseball fans to the area, many for probably the first time. There might not have been any big holes in the ground, but this isn't a neighborhood that's stagnant--yet. That being said, will 2011 be the year that the logjam of long-stalled projects finally gets unstuck enough to see the announcement of something new?
Here's my rundown of the big milestones over the past 12 months, and what might be expected to come down the pike. Like all State of the Union addresses, it's more of a laundry list than a soaring narrative, but at least you don't have to sit through a bunch of manufactured standing ovations. (Or, hopefully, shouts of "You Lie!")

Near Southeast's Residential Numbers for 2010
The Capitol Riverfront BID estimates the current residential population to be now more than 3,300 people (up 500 from this time last year). And when you see the occupancy numbers, it's clear that the currently available living spaces in the neighborhood are almost all filled up (except for Velocity, which is at least slowly gaining residents). Here are the numbers through the end of 2010 (unless otherwise marked), courtesy of the BID:
Rentals
Onyx   95,5% leased, 93.6% occupied
Axiom   93% leased and occupied
Jefferson   94.8% leased, 94.8% occupied
909 New Jersey   95.0% leased, 95.0% occupied
Capper Seniors   100% leased and occupied
400 M   100% leased and occupied (Oct. '10)
Carroll Apts. (410 M)   100% leased and occupied (Oct. '10)  
Capitol Quarter
(Phase I rental units)
  100% leased and occupied
   
Condos and Co-ops
Capitol Hill Tower (Co-op)   90% sold and occupied (Oct. '10)
Velocity   58% sold, 38% occupied
Capitol Quarter
(Phase 1 ownership units)
  100% sold, 100% occupied  

Projects Under Construction and Completed in 2010

1015 Half Street - It was a rough road for the 410,000-square-foot office project on the site of the old Nation nightclub at Half and L, with construction halted for nearly a year thanks to the collapse of the original developer, Opus East. The Douglas Wilson Companies were appointed as receiver a few months later, but it wasn't until April 2010 that construction on the skeleton finally began again. By the end of 2010, the building's exterior was completed, the fences were down, and major construction appeared completed; but no tenants have been announced.


Yards Park - With its somewhat off-the-beaten-path location, the plans for a new 6-acre park on the banks of the Anacostia River seemed to fly under everyone's radar (except mine!), but when the park made its debut in late summer 2010, the kudos for a spot unlike any other in DC were nearly unanimous. With the BID being very proactive in "programming" events, look for the park to become a big draw as the weather gets warm, even if food and retail offerings are still slim until the park's later phases get underway. (Good thing the Food Truck craze is in full swing.)


Capitol Quarter - The Capper/Carrollsburg public housing revitalization project reached a milestone in summer 2010 when the first phase of the Capitol Quarter townhouse project was completed, with 61 market-rate houses, 42 workforce-rate units, 8 Section 8 ownership units and 39 subsidized rental units, all now sold or rented. And thanks to a stimulus-funded grant from HUD late in 2009, the second phase got underway with reservations for houses in spring 2010 and construction in the fall. Look for new units to pop out of the ground within a few weeks, with the entire second phase expected to be finished in 2012.


Foundry Lofts - Also coming back to life in 2010 was the neighborhood's other stalled construction project, the renovation of the World War I-era Pattern Joiner Shop at the Yards, which had been stopped in late 2008 because of financing issues. But the financing was resolved in August, just in time for the opening of the Yards Park directly to its south. With 170 apartments and ground-floor retail, this first residential offering at the Yards is expected to be finished in fall 2011.


Other 2010 Happenings

Commercial Leases and Transactions


100 M Gets New Owner - After spending more than a year in limbo thanks to the Chapter 7 liquidation of developer Opus East, this 220,000-square-foot office building was picked up at an October foreclosure sale for $57 million by Northwood Investors. With a new owner, it's hoped that the building can add more tenants (it's currently 43 percent leased) as well as find a restaurant for what should be considered a very prime spot on the northeast corner of First and M.


DDOT to 55 M - Rumors swirled for months, but by summer it was confirmed that the city's Department of Transportation had leased 150,000 square feet in Monument Realty's building at Half and M. With existing tenant Sayres and Associates adding some square footage, the building is now about two-thirds leased, and DDOT expects to move in early this year. The retail spaces at 55 M remain unleased at this time, despite thousands of pedestrians streaming past when exiting the Navy Yard Metro station on the way to Nationals Park.


20 M Almost All Leased - Completed in 2007 and sometimes used as an example of the slow commercial leasing market in Near Southeast, Lerner Enterprises added four tenants to the lineup of their building at Half and M, with Booz Allen, the Columbia Group, and SPA joining the Bureau of Land Management (who leased half the building back in 2009) and bringing the building to 97 percent leased.


NCC Buying Square 906 Land - The "Miles Glass" site on the southwest corner of 8th and Virginia was bought in August by the National Community Church, which bills itself as "one church with six locations" (broadcasting their services to local movie theaters) but is perhaps better known for the Ebenezers Coffee House near Union Station. With this, plus a purchase of an adjacent empty lot in December, NCC is looking to use the site for their new offices along with two performance spaces.

Retail and Recreation

Despite the population of Near Southeast continuing to grow, the scant number of retail and restaurant offerings continues to disappoint not just residents but office workers and Nats fans looking to do more than just head into Nationals Park and head home. But there was some movement in 2010:

Justin's Cafe - The neighborhood's first new full-time restaurant since 2005 and what some would consider its first "real" neighborhood bar opened in April in the ground floor of the Velocity condo building, offering pizza, sandwiches, salads, libations, and a place for residents, workers, and stadiumgoers to congregate.


Trapeze School - The Washington outlet of Trapeze School New York, after a few years on the site of the old convention center downtown, moved its operations to the southeast corner of 4th and Tingey in The Yards (just north of the Yards Park), opening its doors in late February for what is currently expected to be a four-year run.


The "Little Red Building" - The long-shuttered former Star Market and Second and L began to show signs of life, first announcing plans to reopen as Parkway Wine and Spirits, then saying in November that it would instead be a coffee bar with sandwiches and pastries, opening in early 2011. The building itself, one of the last of the "old" Near Southeast landmarks, was demolished in July.


Harry's - Word began filtering out in May that the owners of Capitol Hill Wine and Spirits on Pennsylvania Avenue, SE, who formerly ran a store in the old Waterside Mall in SW, were looking to open an "upscale" wine and spirits store in the ground floor of 909 New Jersey, on the corner of I Street. Work is underway, and the owners are hoping for a February 1, 2011 opening.

Late in 2010, talk of other possible offerings became more frequent, with Forest City beginning to move forward on what is now a residential building with retail space at 401 M; though no announcements have ever been officially made, rumors and circumstantial evidence point to Harris Teeter occupying the 50,000-square-foot grocery space, and perhaps Vida Fitness being the tenant in a two-story gym space on the south end of the block. However, despite some talk that it would get underway in late 2010, the transformation of the Boilermaker Shops into a retail pavilion at The Yards has yet to move forward.
Meanwhile, over on 8th Street, a Bavarian Beer Garden is in the works for the northwest corner of 8th and L (once it gets through hurdles of liquor licensing and historic preservation reviews for whatever building is being planned), setting up a Saints and Sinners stretch with the National Community Church's plans for the north end of the block.

Lots of Talk, but Little Action

Two potential projects in Near Southeast dominated a lot of the discussion in 2010 (and generated the most heated back-and-forths in the comments sections here at JDLand):

  • CSX's intention to expand the Virginia Avenue Tunnel to allow for double-tracking and double-height railcars has many residents up in arms, particularly those in the 300 block of Virginia Avenue who just moved into their spiffy new Capitol Quarter homes and who now may have to endure 2-3 years of an open trench with a temporary track allowing trains to continue to run. Without any funding in place for the project, little specific information came from CSX about how the work would be handled (and how residents' concerns would be addressed), but it's likely that 2011 will see public meetings as part of the NEPA process, and more unhappiness from affected residents as they get a better feel for what will be coming.

  • The Marine Corps's hunt for a location to put a new very secure barracks to replace the aging and not-up-to-current-security-standards Building 20 at 8th and I, SE involved numerous public meetings, additional steering committee sessions, and lots of readily available information on the sites that they were evaluating. And yet, a year after the process began, most of the publicly controlled sites had been taken off the list for one reason or another (including the portion of Virginia Avenue Park where the community garden has taken root, after loud and vociferous complaints from its tenders), and the Marines were shifting toward perhaps a public-private partnership to develop privately owned land on the east side of 8th Street (known as Squares 929 and 930), requiring special federal legislation and an RFP, which may not come until late 2011. The possibility also remains that a new barracks would be built on the site of the Bachelor Enlisted Quarters at 7th and L that opened in 2004, but at this point, there's no clear indication of which direction the Marines will take.

  • 2010 at the Ballpark

    The biggest draw that brings outsiders to the neighborhood is, of course, Nationals Park, where the Nationals improved somewhat over their dismal 2009 to a 69-93 record in the stadium's third season, drawing 1.83 million fans over 81 home games, putting the team 23rd out of 30 in the major league, with an average of 22,568 tickets sold per game.
    President Obama throwing out the first pitch and Stephen Strasburg's magical 14-strikeout debut were highlights, but the rookie pitcher's elbow injury dashed hopes that attendance would skyrocket in 2010. The Nationals stopped the "Nats Express" shuttle bus service to and from RFK, but with the stadium being easily accessed by all manner of transportation options, the impact of additional the car traffic seemed well-absorbed by the neighborhood.
    The ballpark also hosted a number of non-baseball events, including Opera in the Outfield (again), the Dave Matthews Band, and the opening ceremonies of the Susan G. Komen 3-Day Race for the Cure.

    A Few 2010 Lowlights

    With more people moving around the neighborhood on foot and an increase in traffic as the area becomes more populated, the increased possibility of dangerous interactions between pedestrians and vehicles was brought home with two incidents in 2010. A 42-year-old USDOT contractor was killed when hit by a truck while crossing at Half and M in April, and another woman was struck and injured at First and M in August. DDOT installed a restricted right on red at First and M to try to better protect pedestrians, and it was reported in November that a "Barnes Dance" configuration would be coming to the New Jersey and M intersection in 2011, where traffic is stopped in all directions so that pedestrians can cross with no vehicle movement. There was also much rejoicing when the New Jersey and K intersection was made a four-way stop after years of near-misses and complaints about the danger there.

    And jaws dropped across the neighborhood and the city when a web site looking to score some traffic listed Near Southeast the ninth most dangerous neighborhood in America, a strange designation for an area that hasn't had a murder since 2004 and has seen all crime drop steadily for the past six years.


     

    What to Expect in 2011

    A year ago, in looking forward to what might happen in 2010, I noted the still-shaky commercial real estate market and lack of any confirmed new developments, but mentioned a few projects among the many on the boards that stood a chance of getting started: 1015 Half, Capitol Quarter Phase 2, and the Foundry Lofts re-start (check, check and check), and Canal Park, the Boilermaker Shops, Akridge Half Street, and the Square 882/Capper apartments at 7th and L (oops, oops, oops, and oops). With that in mind, here's some thoughts on what could be coming down the pike, although the markets still aren't back to 100 percent health. And yes, it's mostly a rehash of the ones I missed on last year:

    225 Virginia - The former Washington Star building and then Washington Post printing plant appears to be headed for its renovation into 200 I Street in 2011, with the city continuing to try to recover from its leasing of the building in 2006 (and then outright purchase in 2009) by having partnered with StonebridgeCarras to redevelop the building into a home for the DC Commission on Arts and Humanities, the Office of the Chief Technology Officer, and the Child and Family Services Agency. Construction is expected to start in early 2011.


    Canal Park - A ceremonial groundbreaking in late August seemed to indicate that this long-stalled project, one of the earliest planned for the revitalization of Near Southeast, could finally be about to get underway. But the rest of 2010 passed with no construction. However, hope springs eternal, and early in 2011 building permits were approved, and the park's development association said that construction would start in February, lasting 12 to 14 months. Will it actually happen? And what will happen when the residents who have taken to using the cleared blocks as a dog park are shooed off the site?


    Floating Bridge - It was a bit of a surprise to hear in late 2010 that the city, the BID, DC Water, and Forest City had hammered out an agreement to build the planned floating bridge between Diamond Teague Park at First and Potomac and the western edge of the Yards Park. The BID says that construction should begin this spring, and take 6-8 months. When it's finished, expect a stream of fans leaving Nationals Park to head toward the boardwalk and the parks to watch the Friday post-game fireworks. And will getting this connection along the Anacostia Riverwalk Trail completed convince the Navy to unlock the fences that close off their portion of the boardwalk on the east end of Yards Park?


    Boilermaker Shops - Forest City seemed confident during the late summer of 2010 that the renovation of the old industrial building at Third and Tingey into a 46,000-square-foot retail pavilion would be starting by the end of the year, but so far no announcements have been made, despite rumors of various retailers already being signed. Though with the Yards Park now open and the Foundry Lofts getting closer to completion, it would seem that tenant interest in this unique building should be increasing.

    After a year of construction that has been somewhat invisible thanks to little traffic disruption, look for the benefits of the new 11th Street Bridges to become more obvious in 2011. DDOT anticipates that the two new up-river "freeway" bridges will open in the fall, as well as a resdesigned southbound DC/I-295 on the east side of the river that's expected to be ready in the summer. The "11th Street Local" bridge that will connect Near Southeast and Historic Anacostia will be under construction as well, though it's not expected to open until the winter of 2012/13.

    (I should note that there is one close-by commercial development that appears to be getting ready to move forward, and that's the apartment building at 1345 South Capitol being developed by Camden Properties, just across from Nationals Park, which is apparently looking at a first-quarter start to construction. But it's outside of my western boundary--the South Capitol Street median!--by about 60 feet.)

    Other possible news to look for in 2011:

  • An announcement from the city and DC Public Schools as to whether Van Ness Elementary will be reopened for the 2012-2013 school year. (No chance for a 2011 opening, it's already been said.)
  • The departure of the Department of Public Works from the old trash transfer station site at New Jersey and K, allowing for demolition and clearing the way to have I Street built through between New Jersey and Second.
  • Confirmation from Forest City that it's planned residential/grocery/retail project at 401 M will be getting underway in early 2012.
  • An announcement of at least one other new development getting started, whether it's Akridge's Half Street, or perhaps William C. Smith snagging the 1.1-million-square-foot Department of Homeland Security lease at their 800 New Jersey site, or some other long-planned but on-hold office or residential project.
  • CSX and the Marines moving forward in some way on their respective projects.

  •  

    Summary

    For a year in which it kind of seemed like nothing happened, 2010 did see some good progress, with finished projects, more office leases, and a still-growing residential population. But there are still a whole lot of long-announced projects still on hold that would have been hard to imagine as not yet completed back in, say, 2007, and so the biggest question as 2011 begins is whether the sense that the economy is finally improving filters down to the landowners and office-space-seekers in Near Southeast and the pace of development begins to pick back up, or whether it will be another year of seeing projects that are tied in some way to public funds being the only ones moving forward.

    And some retail would be nice, too.


    To see the latest on these projects and others in the months and years to come,
    visit my Project Directory for quick info on what's coming and what's here.
    Also, for figures on what's been built and started in Near Southeast since 1999,
    see Development Since 1999, By the Numbers.
    The BID's 2010 Annual Report may also be of interest.




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