Share

Development slow in Nationals Park neighborhood

|
Local,DC,Liz Farmer
More than two-thirds of Washington's Capitol Riverfront neighborhood near Nationals Park has yet to be developed two years after the park opened, as officials say the recession put a stranglehold on development.

But those officials said Tuesday that better days are ahead.

"Our existing development only comprises 30 percent of our ultimate build-out — so we're not finished yet," said Michael Stevens, executive director of the Capitol Riverfront Business Improvement District at its annual report presentation.

"I think we've got a real good start but there's much more to come [with] what we're positioning for over the next 20 years," Stevens said.

CapitalRiverfront's pace of development
CompletedUnder constructionTotal expected
Office square feet6.5 million379,00015.9 million
Retail square feet150,28034,0001.1 million
Residences2,4273338,427
Source: Capitol Riverfront BID annual report

New development in the neighborhood practically ground to a halt in 2010, largely due to financing drying up. No office buildings broke ground because the regional market had an excess supply, the report said.

"As a result of the recession and the meltdown of the financial market, financing has been much more difficult to obtain and the pre-leasing requirements are much, much higher," Stevens said after the presentation.

Lenders now want developers to have tenants committed for 70 percent of the building before they fund the construction, he said. Instead the riverfront has focused on filling up its offices -- three leases were signed in 2010, including one by the D.C. Department of Transportation.

Meanwhile, just two retail businesses opened this year. Whereas close to half of the planned office space is open or under construction, retail is far behind with just 14 percent of the planned development open or under construction.

Stevens said retail is typically the last to come to any market, especially one that is emerging.

"They get the daytime population [of 35,000 employees]," he said. "They know we're going to kill at lunch. We're going to kill at 81 ball games. They're just not sure if we can survive at night."

The bright spot this year has been the continued flow of new residents. According to the report, more than 3,300 people now call the riverfront home, up from 2,781 at the beginning of the year.

And demand for residences has been hot. Stevens said that, excluding the newly opened Velocity Condominiums, the area's four other residential buildings are roughly 90 percent occupied. All 80 townhouses that opened this year have been snatched up, he added.

And next year promises to have better activity.

More townhomes are under construction and the Foundry Lofts is expected to open next year after financing problems halted construction. The recession also stopped construction of an office building on Half Street when its owner went into bankruptcy. That building is now expected to open in 2011.

A Harris Teeter is also expected to break ground next year and a developer is in "deep negotiations" with another grocer, Stevens said.

lfarmer@washingtonexaminer.com

View article comments Leave a comment