April 21, 2024

Square Feet: Transit Hub in Maryland Gets a Second Chance

On either side of the tracks are surface parking lots, undeveloped land and underdeveloped office parks, hundreds of acres that have been ripe for new building.

And yet this prime piece of real estate has lain fallow, full of unrealized possibilities, for nearly 25 years. Hotels, residences and retail that were envisioned when the Washington Metropolitan Area Transit Authority, or Wmata, chose a developer in 1988 — a decade after the Metrorail station opened — never materialized.

Even after the Internal Revenue Service built a massive three-building complex for 5,000 employees in the 1990s, the area remained a maze of parking lots and access roads, with two garages, a bus storage yard and a 200-acre office park, all close to the Capital Beltway and U.S. Route 50. There is still almost no place to eat or shop in the vicinity.

Now, however, with transit-oriented development increasingly smiled upon by planners and politicians, the transit authority has chosen new developers with the expectation that the site’s potential will at last be realized. At the same time, the region’s aging mass transit system needs a cash infusion to help with maintenance and equipment problems, and a successful project could help generate revenue to address that.

In a five-way competition, two companies were picked to lead the effort: Forest City Washington, an offshoot of Forest City Enterprises, a publicly traded company based in Cleveland that has nearly $12 billion in assets nationally; and Urban Atlantic, a Bethesda, Md., developer. Forest City is developing a transit-oriented project, Atlantic Yards in Brooklyn, and Urban Atlantic has done $1 billion worth of similar projects, largely in the Washington and Baltimore areas.

In breaking with past practice, the agency did not seek a specific proposal but sought first to assemble a team, with developers working closely with county, state and federal officials to design a fresh plan for the what will initially be a 39-acre site, of which the agency owns 23 acres and the State of Maryland 16.

The hope is that other private parcels will then be developed to create a new urban center tied to mass transit.

“It should be a great place because so many people will come in and pass through, and people should be able to live, work and shop there,” said Deborah Ratner Salzberg, the president of Forest City Washington. To help with the planning, the transit agency and the state are chipping in a total of $1 million for consultants, engineers and economic experts. The state has also expressed interest in leasing space at New Carrollton.

Metro stations elsewhere in the region have been magnets for development, but Prince George’s County, long a blue-collar enclave and now majority black and more affluent, has lagged. The success of National Harbor, a still-expanding $4 billion mixed-use project on the Potomac, however, has increased the county’s marketability.

“This is not a black-white issue,” said Steven E. Goldin, a former New Jersey developer hired by the transit agency to run its real estate division. “It’s a green issue, it’s about money, and developers are going to move in that direction. And it’s the greenest kind of development there is, an opportunity to use mass transit, with less wear and tear on roads and bridges. The location is where the big savings are in the carbon footprint.”

All parties acknowledge that the market, even in a region that has proved largely recession-proof, may not be ready for the projected 2.6 million square feet of offices, shops, hotels and up to 3,000 residential units. “I believe as the project unfolds the market will be ready for it,” Ms. Ratner Salzberg said.

The project has been hampered by a widespread reputation for “pay to play” corruption in Prince George’s County, in which it is located.

The perception was bolstered last year when the departing county executive, Jack B. Johnson, was arrested on charges of taking bribes from developers. On May 18, he pleaded guilty to extortion and evidence tampering in the case. Rushern L. Baker III, the new county executive, said the New Carrollton project was a step forward for Prince George’s.

“I think it just starts the type of development we want to have in the county and what we’re going to see more of,” Mr. Baker said. “Our economic development team is working hand in hand with Wmata and developers to make sure the process, the permitting is streamlined.”

The president of Urban Atlantic, Victoria Davis, said: “I think Prince George’s County is headed in the right direction. I’m glad they cleaned up their mess.” But, she added, the arrest and the general climate of corruption it seemed to symbolize, coming during the request-for-proposal process, was “pretty off-putting for a lot of folks.”

Referring to the county’s image, Mr. Goldin of the transit agency said: “I met with the executive and his staff. I said, ‘This is what I hear out there; you need to deal with this.’ Rushern Baker has brought sunshine to the development process. The development community has noticed.”

Mr. Goldin, a former chief executive officer of InterCap Holdings, a large transit-oriented developer based in Princeton, N.J., said he saw himself as a bridge between “Metro operations folks and the developer. It is by definition adversarial,” because the two disciplines bring different perspectives to the table. But he remains confident. “I’m from New Jersey; we’re tough,” he said. “I’m doing the same as there. I’m just on the other side of the table. I understand the needs and challenges of both the public and private side.”

Article source: http://feeds.nytimes.com/click.phdo?i=84af1fce12deacd9057abf59a72bd4e5

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