NOTE: The following article is being posted in its entirety. The original article, written by Maryann Haggerty, was published in The Washington Post on 16 August 1999 and was taken from HighBeam Research.=================================================
Title: Lofty Visions for New York Avenue; Can a Dilapidated Gateway to the Nation's Capital Become a Hotbed of High-Tech Activity?
Date: August 16, 1999 Publication:
The Washington Post Author: Maryann Haggerty
Think about New York Avenue. For just a few minutes, ignore the barbed wire fences that surround the old warehouses. Ignore the traffic jams. Ignore the junky parking lots and the boarded-up buildings that line the road.
Instead, try to imagine a Parisian-style traffic circle where happy couples stroll beneath blooming trees. Or imagine smart young techies flocking to hot companies housed in ultra-cool lofts.
It may all seem like fantasy. Over the years, planners, politicians and developers have produced countless studies and announced as many proposals to rebuild New York Avenue, the District's congested, dilapidated gateway from the Northeast. So far, those efforts have accomplished little, derailed by the District's political and financial problems as well as by economic cycles.
Despite a few new buildings completed over the past decade, the area is largely an amalgamation of underused, out-of-date warehouses. When Federal Express opened a new distribution center at New York and Florida avenues in 1989 and BET Holdings Inc. moved its headquarters to the neighborhood four years later, there was talk from the District and business officials about how those companies would be magnets for further economic development. That hasn't happened.
Once again, though, there are signs of new commercial activity along the corridor, a broad area that stretches from the eastern edge of downtown to the Maryland line. Construction projects are under way, and rumors abound of more new businesses to come. Local landowners and the District have pledged money to build a Metro stop near the intersection of New York and Florida avenues NE. If the federal government signs on, the station could open the way for even more development in the coming years.
Is it finally New York Avenue's turn?
"I think we don't know the answer yet," said Marc Weiss, a former economic development consultant to the city who has remained active in New York Avenue-area redevelopment groups. "But in a realistic sense, this is the best opportunity that's ever come along, because it's grounded in the most solid {economic} expansion that's ever taken place."
The Metro stop could be a "huge step" in luring more development, said Keith Lavey, a research analyst in the Washington office of Grubb & Ellis, a commercial real estate brokerage. "Every time the {real estate} market heats up, this area is focused upon," he said. "But it seems to have fizzled out as the market has fizzled. I think it can work this time if the market sustains itself."
The focus of current development activity is around New York and Florida avenues, where the Metro stop is envisioned. The most tangible sign of an upturn in the neighborhood's fortunes is the transformation of two old warehouses into new commercial space.
One project is the renovation of an old printing company warehouse at 1500 Eckington Pl. NE into a 238,000-square-foot building targeted at telecommunications companies and other high-tech users. Qwest Communications International Inc. of Denver has agreed to rent almost half the building for a switching center. The company picked the location primarily because it's close to fiber-optic lines that run along the railroad right of way.
The other project is the renovation and expansion of the former Peoples Drug warehouse at 77 P St. NE. Local developer Douglas Jemal has enough land to build as much as a million square feet of office and retail space; steel is now being erected for the first 370,000- square-foot building, which is scheduled for completion before year- end. Jemal has no tenants for the project, but he thinks it will attract a federal or local government agency.
So far, Qwest is the only new employer to sign up for the area. But there are plenty of other deals about to happen, according to boosters and the ever-active real estate rumor mill. Among the rumors:
There will soon be another sizable high-tech tenant at 1500 Eckington. "By the end of the summer, I'll have something to announce," said Stephen Muller of Union Realty Partners, a District company that is working on the project along with the Bernstein Cos., another D.C. development firm. The most persistent rumors are that the tenant is either XM Satellite Radio, a Washington company developing a new type of radio broadcast, or Enews.com, also District-based, which sells magazines over the Internet. No one directly involved is commenting.
The Bureau of Alcohol, Tobacco and Firearms is seriously evaluating a District-owned site at New York and Florida avenues for a large new headquarters with space for about 1,000 workers. The General Services Administration, the federal government's real estate agency, plans to complete a study of the site over the next two months.
BET Holdings Inc., parent of Black Entertainment Television, wants to add two technology-oriented buildings to its existing three- building headquarters campus. They would provide incubator space for small companies as well as room for BET's own growing operations. The company has already submitted a proposal to acquire the necessary city-owned tract; it's impossible to say when the city will decide.
Railroad company CSX Corp., a major landowner in the area, may have a buyer in sight for the 20 remaining acres at its Capital Commerce Center, the decade-old office/industrial park where Federal Express and State Farm already have buildings. Bill Cromwell, assistant vice president of CSX Real Property Inc., said he couldn't comment because he was bound by a confidentiality agreement -- often a sign that a deal is pending.
Other high-tech firms may be considering space in the former Woodward & Lothrop warehouse at 131 M St. NE. A "large technology company" supposedly is eyeing at least some of the space at the boarded-up building, which is owned by Bristol Group of California on behalf of its pension fund clients. The most frequent subject of those rumors is MCI WorldCom Inc. Again, no comments.
Beyond those buildings, there are even more dramatic dreams for the area. Weiss and others say it's perfect for more high-tech companies that would be drawn by the funky spaces that can be carved from old warehouses, a sort of lower-Manhattan-on-the-Anacostia. When he was working for the city, Weiss dubbed the eastern part of the area NoMa, or North of Massachusetts Avenue, in conscious imitation of New York City; one task force proposed a plan for redeveloping it into a mix of commercial and residential space with an artsy, techy flavor.
"The tech companies that have showed up at our door -- and it seems that everyone who shows up at our door is a tech company -- have all made the decision that they want to stay downtown," Muller said. Maybe it's cheaper to move out to the suburbs, he said, "but it's an issue of culture and location." Overwhelmingly, growing technology companies are choosing Virginia locations, but in a few cases, the reasoning is that young, often single employees just don't want to live in quiet family-oriented suburbs.
Turning the neighborhood into a tech haven is a modest goal, compared with Ron Linton's vision. Linton led a mayoral task force that in 1996 produced a $2 billion proposal for overhauling the avenue from Seventh Street NW to the Maryland line. He now heads a group called Save New York Avenue Inc. and continues to push the plan.
The plan calls for a 1.2-mile traffic tunnel to funnel Interstate 395 traffic under the street, a deck over the railroad that would create a huge space for new office buildings, and the redesign of the avenue into a grand boulevard. Part of that redesign: a "grand circle," Paris-style, at New York and Florida avenues.
While it's easy to be skeptical about anything that requires $2 billion of federal money, Linton thinks his group's plan could become real. A federal loan, he said, could be repaid from special assessments levied on the office space that would be built on those decks over the railroad tracks.
He said, "It's not inconceivable in a perfect world that it could all be done by the time that the city is getting ready to host the 2012 Olympics." That, of course, is not exactly a sure bet either.
Whatever happens, New York Avenue as it is now has serious, persistent traffic problems that could become even worse if more companies move there. Just because the plan is highly ambitious is no reason to shelve it, said Diane Pratt, a government relations and economic development consultant who was on the task force and was involved with some neighborhood economic development efforts when she was a city employee.
"Ron has helped put on paper a clear vision," she said. "Now it becomes, what is an implementation strategy?"
If ATF chooses to move to the New York Avenue site, that would be a major impetus for local and federal planners to think about traffic fixes, she said. "How do we prioritize what makes sense to start with?"
Other plans have gone nowhere. For example, in 1993 then-council member John Ray pushed a proposal to establish a New York Avenue development commission similar to the Pennsylvania Avenue Development Corp., which spearheaded the overhaul of that street from tawdry to world-class.
"I always felt it could have as great an impact on the city as the redevelopment of Pennsylvania Avenue, and ultimately could mean more and produce more jobs and improve living conditions and provide services to D.C. residents," Ray said recently.
Even though his proposal went nowhere, Ray said he's still a New York Avenue booster. "I think there's a feeling something really can happen out there," he said.
Why does New York Avenue attract all this attention, anyway? It's a matter of geography equaling destiny. Linton points out that before the interstate highway system, Rhode Island Avenue was the primary gateway to the city from the Northeast because it carries U.S. 1, once the East Coast's major highway. But in 1954, the Baltimore- Washington Parkway opened, and I-95 followed.
So all those New Yorkers were now coming into the District via New York Avenue, even though the longtime industrial and warehouse district provides a very ugly welcome to the nation's capital.
In more recent years, real estate developers have rebuilt almost all of the District's downtown west of where New York Avenue connects to I-395. The area around Union Station has also been transformed in the last dozen years or so. So the next place development can creep eastward is the New York Avenue corridor.
"This is really one of the last undeveloped areas in the city, if you think about it," Pratt said.
The corridor's commercial areas could hold 20 to 30 million square feet of development -- a third again of the city's existing base of office and industrial buildings.
"It creates a good area to start with a clean slate and develop large-tenant buildings," said Steven Peay, executive vice president of local development firm Steven A. Goldberg Co. and a leader of the business group backing the Metro stop. "There's no place left in Washington to do that."
Peay said, "There's a lot of junky stuff that will all get bulldozed. It's a competitive alternative to downtown."
"It's an obvious extension of {the neighborhood around} Union Station," said Kurt Stout, another research analyst at Grubb & Ellis.
He said, "There's no question it's a fringe market, but so was the East End nine years ago."
When BET built its headquarters building in 1993, "the District at that time promised us we'd have all sorts of tenants," said President Debra Lee. That didn't happen; instead, BET has expanded to fill the space, and it needs more.
The company's isolation has not been a problem, she said. "We've become very self-sufficient. We can just live inside the building." She joked that she's not bothered by the building's railroad-track view, because "we're so busy over here, we don't have time to look out the window."
Still, Lee said, "it might be nice to have some support services, like restaurants, grocery stores or dry cleaners."
If her company completes the new high-tech buildings it has proposed, it plans to try again to lure some business neighbors to the new space.
"We just always have had that vision for over here, especially with the high tech," she said. "We'd like to be part of encouraging businesses to locate here."
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