Washington, D.C. Focuses On The Waterfront
With retail springing to life in the District, developers in the nation's capital are focusing on the Waterfront, an undeveloped tier for residential and retail.
Roundtable moderated by Randall Shearin and Daniel Beaird

Shopping Center Business recently held a roundtable in Washington, D.C., focusing on the city's waterfront area — the next area where retail will be positioned. The roundtable was a follow up to our roundtables in 2002 and 1999. When SCB first visited Washington, D.C. in 1999, we were stunned by the story we heard: D.C. was under-retailed drastically. There were few grocery stores, and little specialty retail. Despite the fact the city has one of the highest counts of tourists per year in the U.S., nothing was being done to keep them in the city after they had seen the museums. By 2002, the tide had begun to turn, with new developments announced. Today, the story is entirely different: the District has reinvented itself with restaurants, innovative retail, and plenty of new projects coming out of the ground.

The Rappaport Companies is redeveloping Skyland Shopping Center at the corner of Alabama Avenue and Good Hope Road in Washington, D.C. When completed, the center will be 250,000 square feet.

SCB: On the Waterfront there are a lot of new projects that some of you are involved with. Peter [Cole], tell us about where we are now, the Mandarin Oriental Hotel, and how this development is a catalyst to other areas along the Waterfront.

Peter Cole: I think certainly we were on the early edge of the reclamation of the Waterfront from the west side moving east, and certainly with this development [the Mandarin Oriental Hotel and two surrounding office buildings], although its been 15 years in development. It's just now that we have enough occupancy for the opening of the hotel and the two office buildings that are for lease, and the third office building that we're leasing now, that we are starting to see genuine interest that is sustainable from a retail point of view. So for us, that is very exciting and bodes well for the overall Waterfront development on this side.

SCB: Skip [McKoy], what is Anacostia Waterfront Corporation focusing on in terms of development?

PN Hoffman is developing Union Row, a mixed-use project with condos and retail.

SCB: Harriet [Edwards White], Forest City is also involved in some development on the Waterfront.

Harriet Edwards White: The Southeast Federal Center is an incredible development, from a retail standpoint. I've been really floored with the interest that's coming unsolicited from national retailers. We even have people willing to sign leases for 2011 today, so that has been extremely encouraging. We should have about 250,000 square feet of retail at Southeast Federal Center. We are involved in just under 90 acres of development in Southeast with the Waterfront. One project is the former Arthur Capper/Carrollsburg site — it is about 33 acres of development that should add about 50,000 square feet of retail. When we first started this, we were looking at about 400,000 square feet of residential, 100,000 square feet of retail and 2 million square feet of office, and today we are looking at doubling the size of the residential. From a retail standpoint, my phone rings every day with national restaurant retailers, upper moderate restaurants included, and retailers for that project.

SCB: How far off do you believe that project is?

Edwards White: Hopefully the road will start construction by the end of the year and Ford Street will be continued. The bulldozers will be moving by the end of the year at Southeast Federal Center, but I'd probably say it will be 20 years before it is completely built out.

SCB: A little further out, Tom [Maskey], I know you're working on a really big project that may change the way people think of Washington, D.C. Tell us about National Harbor.

An overview of the F Street and 7th Street Retail corridors, showing new retail landmarks. The former convention center site, which is being redeveloped into a mixed-use project, is highlighted in orange.

SCB: How's that going to change the way Washington operates for visitors? Do you think it will?

Washington, D.C.'s former convention center has been demolished, and work is underway on a new mixed-use project that will bring 300,000 square feet of retail, 800 condominiums and apartments, 300,000 square feet of office space, and a 200-room luxury boutique hotel, as well as a public plaza. Hines, Archstone-Smith and Williams-Jackson-Ewing are developing the new project.

SCB: What does it mean to the District of Columbia to have the waterfront developed? Is it going to change where D.C. has retail today? Is it going to change the dynamic of what exists? What kind of retailer are you looking to put at these waterfront developments?

Freddie Lewis-Archer: I think it will definitely change the dynamics of retail for the District of Columbia, particularly when you're adding destination venues like a baseball stadium. It's a great opportunity to finally have this city reconnected with a section of this city that had been pretty much a step-child to the city for a long time. Now that this is occurring, it will foster better relationships with Prince George's County and with Alexandria. As Tom was talking about, the whole notion of the water taxi and bridging and bringing tourists and conventioneers to the greater region offers an opportunity for Washington to be known more as a retail/entertainment venue with opportunities in different areas of the city. It's not just Georgetown; it's not just downtown; its not just Upper Northwest; now we will have another destination area, and that area will be at the Waterfront. It's something that's been here, it's not been attended to, it's long overdue, and I think that it's just going to be a real dynamic addition to this great city.

Catherine Timko: Many of the world-class cities have active waterfronts, which was part of the impetus behind the plan (Anacostia Waterfront Initiative). It's also going to elevate the District of Columbia as a world-class city, which will help [bring] additional types of retail tenants as well as residential and visitors. It's really going to put a different dynamic on what the city is and how we compare to other markets in the world.

Michael Stevens: The District is vertically challenged and constrained, so this really will guide the growth in a very rational way. It will create new residential opportunities, it will reinforce future retail, and I think it creates some opportunities for retail categories that don't fit in older neighborhoods throughout the District. You'll have some larger parcels that accommodate some more medium to large size retailers. I think national restaurateurs will want to be there, but I think it's where the city has an opportunity to grow.

SCB: There is a lot of interest from retailers in these projects. What types of retail will be the ones that you will follow through with for the Waterfront?

Edwards White: The retailers that I've talked to are the same retailers that I've talked to for big lifestyle centers and shopping centers. The interest is so strong.

Lewis-Archer: I think if you look at how the development is occurring, it's not just office that's being developed; it's really being developed as a district with residential — with people living there at night as well as working there during the day — so consequently, you are going to attract a better retailer than what you would normally attract if you were only talking about daytime population.

SCB: There's that after hours component that was missing.

Lewis-Archer: Retailers missed that there were people living here, living in that area. Now [with the new projects] we're going to substantially increase that residential component.

SCB: When we first had this roundtable in 1999, we talked about what was really missing from this market and that retailers and restaurants didn't understand the market. Now, all of a sudden, they've gotten it. You see an area like downtown; you can walk downtown and there are 10 restaurants to choose from in a 2-block radius. Eric [Rubin], will you address how retail has come about, not only in downtown, but in the District in general?

(left to right) Eric Rubin; Michael Stevens; and Randall Shearin.

Marc Katz: All the retailers we represent are doing very well in the District. It's evolved from trying to get retailers into the District to retailers wanting to be here, but not being able to find the right space and the right place.

SCB: And that's flip-flopped from 7 years ago. If you look at where we were 7 years ago, one of the biggest concerns was the Woodward & Lothrop   Department store building downtown. Now, that's not a concern anymore. You have some very impressive leases there. Washington has two Barneys Co-op stores, you have H&M in the market; Washington has really changed a lot over the last 5 years. How has the attitude of retailers entering the market changed?

Katz: We were the local brokers for H&M and we had to drag them to the location; in fact, they didn't want to go. They wanted to get to the airport for their plane, but I know Doug Jemal [owner of the Woodward & Northrup building] and knew that I had to get them there that day. So we stopped off, and did a good sales job, and H&M took the risk and are happy that they did. We now have lots of other retailers who'd love to be there, but their footprints or operations need certain size requirements that wouldn't work.

SCB: Where are the retailers asking you to take them when they come to town?

Rubin: They still want to see Georgetown, of course. There is not as much emphasis on the CBD, although it's well leased up right now. The East End, which is downtown, and then the 14th Street area, which is an area that is evolving with more residential and streetfront retail. The success of Whole Foods, quite frankly, has been the primary generator of a lot of interest there. We've placed a tenant that we represent, Storehouse, there and they've have phenomenal sales; it's one of their better stores in the chain. So there's a lot to be said about a strong neighborhood market. There's also the Columbia Heights area, which is basically on the cusp of becoming the next place to be.

Katz: I don't think there's an area we don't show them. Columbia Heights in NW to Washington Gateway in NE as well as F Street and L Street and Georgetown and all these traditional retail markets that retailers are anxious to get into.

SCB: Freddie [Lewis-Archer], give us an overview of what's going on with the old convention center site.

Lewis-Archer: The ultimate consumer site is the mixed-use project that will be comprised of roughly 300,000 square feet of retail, an office building, and maybe a hotel. There are two components; part will be private sector and part of it will be public sector. With the public sector piece, the plan is the retail I mentioned, and office building, and about 900 residential units that will include condos as well as apartments. I always refer to it as the jewel in the crown — the last major site in downtown that is going to be developed. We are in the master planning process. We probably will not get out of the ground until 2008.

SCB: Michael [Ewing], you've been very active with Union Station over the years.

Washington, D.C.'s Union Station continues to do well, attracting tourists as well as locals to its stores. The retail is performing above $600 per square foot, reports Michael Ewing of Williams-Jackson-Ewing.

SCB: What about some of the developing retail corridors? The 14th Street corridor was mentioned.

Richard Lake: Well, I think one of the things that's also a phenomenon of Washington, a lot of people are focusing downtown because that's usually where the larger, more national retailers are located. But Washington has great neighborhoods that are starting to evolve, and the neighborhoods are really going to be the next generation of the growth. When you talk about corridors, talk about Columbia Heights and Anacostia, where there is a tremendous built-up demand for retail goods. These projects are going to be catalysts for other opportunities in the city. Our downtown is almost built out. The greatest problem is finding the actual physical structure that a retailer can operate in. It's not easy to find a 50,000-square-foot footprint for a retailer who wants to be in this market, so retailers are becoming more creative. That includes food stores: Harris Teeter is doing two-level stores and Safeway is developing a store that's completely relying on central parking. You also have Giant looking at doing one of the largest grocery stores in the city. They are also open up at the Tivoli Theater in Columbia Heights with all the parking above them. It is a much more shallow store than you would normally have, so the retailers are adapting to be able to serve in those neighborhoods. The neighborhoods are getting more dense and more affluent. The neighborhoods are going to be our next great frontier for retailers and for servicing for the residents and the daytime population.

SCB: What opportunities are available in the neighborhoods? Have we discovered them yet?

Lake: There's a lot of activity going on. There's probably more grocery stores being built in Washington now than there have been in 30 years, with Balducci's and Harris Teeter under construction on Capitol Hill. JPI's project has the first new grocery store to come in the District in about 15 years. Whole Foods was the catalyst. Most people would really question, did 14th Street have the legs? Now look at it. Condominium sales are fueling a lot of this activity because new residents are coming in and retailers are following the residential growth.

(left to right) John Asadoorian; Richard Lake; Keith Sellars; Freddie Lewis-Archer; and Eric Rubin.

John Asadoorian: As a complement to that, a lot of the neighborhood retail growth, the retail growth that's driven by anchor grocery stores and higher profile names are highlighting the markets that exist. The interesting phenomenon is that there are a lot of independents opening up stores. Washington has gone from being a government industry driven town to a more moderate and entrepreneurial driven town. A lot of people maybe retired from another business early or moved from the West Coast or some other region that had home-grown retail and decided to open up a store themselves or franchise a concept. In these neighborhoods, you're seeing a lot of independents bouncing into these spaces. What's interesting about that is there's a fear of the neighborhoods being sort of generic, where you have the same retailers that exist in the suburbs dropping in the neighborhoods. In areas like along 14th & U Streets, you're seeing a lot of independents that are unique, that are doing the sales that are capable of paying the rent that are driven by the economics of the market, so the neighborhoods are becoming unique. You can go from one neighborhood, say H Street on Capitol Hill to 14th Street to Columbia Heights, and find unique retailers such that the neighborhood retail continues to grow its destination.

(left to right) Marc Katz; Tom Maskey; Henry Fonvielle; Peter Cole; and Catherine Timko.

Asadoorian: I saw Cowgirl Creamery when I was in San Francisco and as a broker, I thought, this is great. It'll never go to Washington. To find them in downtown as opposed to the suburbs speaks tremendously to our neighborhoods.

Rubin: Also a reflection on the demographics too is that, in the past, the young graduates from universities across the country would come here, basically, to pursue their careers in politics. Now with the diversity that we have in our region here, you're getting a great influx of young people who want to move here because it's a great place to live, very much so why people move to New York City. They're coming from the left coast, just like John's saying, and they are bringing their ideas and they are bringing their passions. There are a number of people who are cashing out of government lobbies, etc., that want to have a different life, so they are investing in new retail concepts. That's great because for many years Washington, D.C. has been on the receiving end of great concepts and I think we're turning the tables to where we're developing great concepts that may ultimately become either great locally or they might have national aspirations.

SCB: We are finding that trend nationally, where a lot of people are cashing out of companies, maybe in their early 40s and they decide that corporate life is not for them anymore and they take their x amount of dollars and start a UPS Store or an independent retail concept. We hear a lot from brokers that that is their new top client; that they are finding people who want to open stores.

Ewing: With the restaurants we did at Union Station years ago, we had to go outside of the area to bring them in. Today, Washington has a number of great restaurant operators.

Katz: In this area, we have a lot of people who are on two pensions — former military, former government worker — and they have the ability to fund a small business, such as a UPS Store or something.

(left to right) Richard Lake; Keith Sellars; Freddie Lewis-Archer; Harriett Edwards-White; and Michael Stevens.

SCB: It's become a very livable city; you can avoid the car if you want to and you can have all your amenities surround you.

Asadoorian: Someone told me the other day that Washington is becoming like New York in a sense that there is not many more places you can go. The worse traffic gets, the better retail sales are because there a lot of people and they are not necessarily going anywhere. There is a good quality of life, and the city finally has hit that tipping point where the number of people, the amount of opportunity, the quality of life has aligned. One extreme thing is retail rents. In less than 7 years, retail rents have almost doubled in some areas. Rents that have doubled are a function of sales volumes, so the retailers are doing well. Spaces aren't turning up as much, so the market's tightened up. Development can't keep pace with retail demand in this neighborhood.

Lewis-Archer: The whole notion of live, work, play has finally caught on and developers are recognizing that if they are coming into this market that they have to have all those components together. People are just tired of being in their cars all the time, they are tired of having to drive to the store 3 or 4 miles. They really would like to live in their neighborhood, play in their neighborhood, dine in their neighborhood.

Lake: I also think that what we are seeing is an education taking place. The customers are being trained to go grocery shopping in structured parking environments where 10 years you'd say that's never going to happen. That's becoming more comfortable. We are finding that stores in urban areas need less parking than their suburban model. The urban dwellers actually treat a grocery store as a pantry and so they are going there three times a week as opposed to once.

Stevens: Mayor Williams and his administration have restored public confidence in the District, not only from good government and finances and infrastructure being rebuilt, but they've done it with the private developers. They know that they can get square dealings with the current administration; that has resulted in Washington reemerging as a place to live, as an option for people to consider when moving here. Families don't consider it as much as the young singles or the retirees, but you look at the number of building permits being issued in this city on an annual basis, whether it's for single-family or townhouses or condos or apartments, and it's the biggest building boom in the city's history. Almost 41,000 units of housing have been constructed or are under construction or in the pipeline, so the city has reemerged as an option for living. It's a quality urban environment with all the amenities we've talked about of a great, world-class city. It also has Metro, and so you can park the car and get to many of these options by Metro or by walking.

SCB: Would you say this renaissance of Washington is the result of the public and private sectors working together — the developers and the city working together?

Stevens: I think it's the District government stabilizing their finances and taking care of basic infrastructure and good systems in government as well as incentivizing some of the development through tax abatements or TIF finance programs and bond issues. The private market responded when it saw an administration that understood economic development and had housing and retail as fundamental goals of their economic development programs. Then when you start telling the facts that really are germane to developers and the light goes on, they get it, and the market has really responded. The office market has always been strong, but to see the residential respond, the retail respond to that, and then cultural tourism is just going gangbusters as well, so all the core economies are doing very well.

Henry Fonvielle: Residential really is the catalyst because we had office for a long time; great development along the central business district and good retail. The residential component down the street has made an incredible difference, especially in the neighborhood retail corridors you're talking about like 14th Street. It is absolutely incredible what's happened along 14th Street in the last 10 years. Another corridor, H Street, NE, is going to be an incredible corridor. We're already getting interest for property that Rappaport Company owns at Eighth and H called H Street Connection. They're talking about the street'cars on H Street. Everybody used to complain that nobody was on the street after 5 or 6 o'clock, and now you can drive the streets, especially downtown and in the East End such as at Seventh and D, and see people. I just think it's incredible how the interest in retail has moved east from Seventh and D so quickly. We're also working on a project at 14th and V; who would have thought it could have gone that high that quickly. D.C. used to be pretty sleepy in restaurants and the last 15 years, restaurants have served as our new anchors. I've lived here for 25 years and it's easy to forget why all our development wasn't on the river. The reason was the river was nasty and smelly. Now, there are large yachts, and it's trouble for me to even tie my boat up. It's not an overnight success — it has taken a long time to embrace the river. In the great cities like Paris and London, the river is a big part of the city, and I think we are coming back around and rediscovering that.

Timko: Another result is that the [city] government is not telling the story anymore. The investors are trying to get in because they see what the success is. The city doesn't have to sell itself anymore. The residents are telling the story to each other, the young kids are telling it to their friends and they are moving here.

Cole: As we talk to the government in the southwest, in the Federal Campus, they have elevated their expectations and the transiency of the employment base within the government. People are coming from other cities and they are saying, ‘Where is the retail? Where is the residential on the Federal Campus? Why can't I make use of the river?' When I first got here, I was going to Columbia Island Marina for a burger in the middle of the day, and to me that was natural because I came from another place. People thought that was pretty nuts at the time. The Federal Government is lifting its expectations, as we talk to them. They are very interested in seeing the reclamation of this part of town, right within the Federal Campus, interspersed among those buildings.

Rubin: We're operating on all cylinders: we have positive migration in this city from a residential base; one of the strongest and more affluent office bases; and a daytime population base that continues to grow. One of the local monthly style magazines says we have 81,000 attorneys in the District now, and their average salary is about $126,000 to $140,000, so it's becoming the attorney mecca now. The other thing is that we are at pre-9/11 levels for tourism now, and I think we can't discount that. That's what's driving why we are now look at the Waterfront over the long term. With Gaylord making a huge commitment as they have at National Harbor, it is the southern anchor of what we'll see emerging over the next 10 years, a dynamic waterfront environment.

Maskey: We have dredged a 100-foot wide, 12-foot deep channel at National Harbor and we're building two 700-foot long piers. Now they won't give us a lot of permanent slips, but on a Saturday, we could net 200 boats out there against one another and we're looking at that as one of the anchors. The water is one of the anchors of our project, Gaylord is another and the water, entertainment and food are the others. If you get those working together, that's a pretty nice mix of things to do and see.

Stevens: The Georgetown waterfront on a warm evening with all the boats rafted up there is dynamic and you're going to have a similar effect; you are going to be the two magnets.

Maskey: One at the top, one at the bottom, we'll take it.

Fonvielle: With a water taxi between the two!

McKoy: Another part about the river that's going to be interesting is that the Smithsonian is looking at this back overlook for L'Enfant Plaza as a potential site for a new museum. If you can bring foot traffic down on the waterfront that now sees the Mall as this self-contained area, that opens up all sorts of retail possibilities. If you have a water taxi that goes down a cleaner Anacostia River, and can either go on down to National Harbor or around to the Potomac, there's just no limit. I was planning director [of Washington, D.C.] from 1979 to 1984, so I am coming back to Anacostia after 20 years with the government. Anacostia Waterfront, thank goodness, is not the government. It's just interesting to me, 20 years later, to come back to see the difference between when we did the first downtown plan in the early 1980s and to see what's happened in terms of retail. I remember when we put the Reeves Government Center on 14th Street, and everybody thought, ‘Now, that's a dumb idea. Why would you put office workers in this dangerous corridor? That is the dumbest thing I've ever heard of.' Well, the dunce cap is off, and it's happening in other areas. An interesting long range policy question is what's the cap on retail growth as long as we are depending on single, empty nesters and we can't get families to stay? If we can get families to stay because the schools are attractive, there would be no limit to the growth of the District. One of our business challenges is how do we improve schools? Charter schools are starting in the right direction, but the school issue is looming out there in terms of limiting growth because even though we are attracting a lot of people, when they get kids, if they can't afford private schools, they're gone.

Lake: Just think about your real estate taxes and the value issue. If you've got two children and you don't have to spend $40,000 on private school, that money is available for other things. The city hasn't even tapped into that, and the next administration has to make that the Number 1 tackle because we're spending money on our schools.

SCB: That's a problem that many major cities face; I know Atlanta is the same way. One city that's really conquered that is Chicago because the mayor made his Number 1 priority education in the public schools. New York is doing a good job with it too, but they made it a priority. If that's the top priority, it trickles down to a good quality of life because people want to live there. In talking about tourism just a minute ago, is that a driver for a lot of the retailers that come in here or is it just an added benefit?

Stevens: I think you can look at the Spy Museum, when its coupled with the MCI Center and how it has changed the restaurant and retail landscape in the Penn Corridor area. The Spy Museum had 250,000 visitors in its first year. Smithsonian is considering a site behind L'Enfant Plaza because it brings yet another cache of people besides the employment base and the residential to that neighborhood.

Lewis-Archer: It depends on the retailers. Certain apparel and soft goods retailers could see as an add-on, but they really don't see it as something that's going to drive their decisions and that's understandable. That being said, there's an untapped portion. Conventioneers are starting to come in greater numbers and staying for long periods of time. Generally, most conventions in the D.C. market are for professionals, either doctors, lawyers, other associations. This is the association capital of the world. Statistics I've seen show that conventioneers are spending more money when they come, and they are staying at least one additional day than they did 10 years ago, so that's where you can capture a recent gain out of that group.

Asadoorian: Washington gets stuck with perceptions of the past. Tourism is a big component of the local economy, and people in the past used to raise that question when the truth of the matter just about anywhere in Washington [is that] there's a predominant use in tourism. But residential is solid, the office population is already there. Years ago when you'd get a major retailer in your car they'd say ‘don't take me east of 14th Street.' They would get off a plane and go to Tysons Corner; when they signed that lease in Tysons Corner, their ad would say ‘New York, Palm Beach, Chicago, Washington, D.C.' We'd tell them, ‘You're not in Washington — you're Tysons Corner!' When you look at the retail that is near or on 14th Street today — H&M, Jos. A. Bank, American Apparel, Urban Outfitters — they are geared towards tourists and locals. A lot of locals used to not go where the tourists go, but a lot of my friends go downtown because it's the place now. Tourism definitely supports retail, especially with the business travelers, but I don't think it is as much of an issue as it once was.

Lake: All these aspects are legs in support of retail in general, so although tourism may not be the main stage, it's just something else that floats the boat. There's no secret why they have fingers out into the residential community, and there's no secret why they have fingers out towards tourism, which is typically on Constitution Avenue where the Smithsonians are. Dupont Circle has the residential base and a daytime population. It's given those restaurants two turns at lunch, and three turns at night. You know the restaurant business — if you don't turn during the day, it's hard to make it up, and if you're shutting your doors after 6 or 7 o'clock at night because no one's there, then you're not going to attract the best restaurant. We're seeing the ability of these restaurants and the ability of our streets and developments, that there's more reasons to come, so tourists come, the residents come, and they mix and that's great. I don't think we see ourselves as just a tourist attraction even though we have around 20 million visitors per year.

Lowe Enterprises is developing CityVista at the corner of 5th and K Streets in Washington, D.C. The project will have 685 residential units, a 55,000-square-foot urban prototype Safeway and 60,000 square feet of streetfront retail.

Timko: If you look at the statistics, the base of the tourists are families and many of them don't come from the markets that have the retailers who are here.

SCB: The comment was made in our last roundtable that a lot of the tourists come to go to the museums during the day and then they go back to the suburbs at night.

Timko: That's not the case anymore.

SCB: Is Washington, D.C., recapturing that market now?

Timko: Yes, even the restaurants are catering to the tourists at night during the week.  

Rubin: Our only big problem right now as far as tourism is concerned, is we're really pressing right now on the hotel occupancy. We have extremely high occupancy and the rates are extremely high.

Stevens: There's a whole submarket that you have to mention and that's the colleges and universities. There are 75,000 to 80,000 students in the city. Their families come visit. Georgetown somewhat caters to that market, but it's higher luxury retail. The students are increasingly staying here after graduation and building careers here, so they've got a running loyalty to the retailers.

SCB: What are some of the new projects being developed in the District?

Ginger Remian, left, and Skip McKoy, right.

Asadoorian: In Columbia Heights, we are working on two projects. One's called The Kenyon and the other one is called Highland Park. They are two residential towers with 20,000 square feet of retail right on on top of the Metro. They basically flank the DC USA project that's going to have Target and Best Buy.

Lewis-Archer: In the Mt. Vernon triangle area, the new convention center has roughly 20,000 square feet of street level retail. We're just about done and we have two bays remaining. We will have a couple of restaurants. Back to new retailers, there is a new concept entering the market called Euro Market Café. This is a franchise concept and so far the only ones in this market are in Arlington and McLean. They are going to go like gangbusters because the coffee is fabulous and the concept is more than just coffee; they offer gourmet products, they have ice cream. In Anacostia, I'm working on a project called Shops at Park Village. This will be the first new food store constructed in well over 10 years; Giant is building a 65,000-square-foot store in a neighborhood that people 5 years ago would never have thought would happen. I have about 40,000 square feet of shops and a restaurant pad. We are going to get a casual dining concept on that restaurant pad of about 5,000 square feet, and if it's not a national, we'll find someone local. It's nice to see this change in a neighborhood that was written off. There is new residential and the residents want the same kind of amenities wanted anywhere else; they want to have nice places to go and eat. This would be first sit-down restaurant in Anacostia in 25 years. The change is good, and I think a lot of people will recognize that there are still a lot of opportunities in the neighborhood.

An aerial photo of Washington, D.C.'s waterfront. Photo courtesy of Madison Retail Group.

Asadoorian: In the planning stages right now is Square 54, on the site of the former George Washington University Hospital. It's going to be about half a million square feet of office, about 250 condos on top of about 60 to 70,000 feet of retail. There will be a grocery store in the range of 25,000 to 50,000 square feet. It's a good site because you're in the middle of the University, you're in the middle of downtown, and you've got strong residential neighborhoods.

Southeast Federal Center A Catalyst To Waterfront Renaissance Forest City Washington is developing an area known as the Southeast Federal Center into a mixed-use environment. There are several developments underway in Washington, D.C. that will transform the city's waterfront. One of the most ambitious within the District is the development of an area known as the Southeast Federal Center, located along the Anacostia River. Forest City Washington, a regional office of Forest City Enterprises, has an ambitious plan to turn the property into a $2 billion mixed-use development of housing, office and retail. The 42-acre site incorporates five existing historic buildings.   Forest City Washington plans to renovate and rehabilitate these buildings into housing and retail, while adding new structures for more housing, retail and office uses. Two of the historic buildings will be used for residential purposes, one will be an office building and one will be used for retail. Forest City Washington is estimating 250,000 square feet of retail for the Southeast Federal Center Project. Forest City is also redeveloping the current Arthur Capper/Carrollsburg site, a Hope VI project, which sits just north of Southeast Federal Center. These 35 acres of development will add an additional 50,000 square feet of retail space, as well as more multifamily mixed-income housing. In all, both projects will produce 4,345 housing units in the near Southeast area. Forest City's plan for the Southeast Federal Center calls for the addition of 250,000 square feet of retail to the area. “The interest in the retail portion of the project has done nothing but increase,” says Deborah Ratner Salzberg, president of Forest City Washington. “We're building a community so we are talking to many of the tenants who are in lifestyle centers across the country. We're also talking to neighborhood retailers as we have areas of the project that will be both destination oriented and community oriented.” Currently, there are 13,000 employees at the Navy Yard, which sits next to the Southeast Federal Center site. This number is projected to rise to 18,000 over the next few years. A key highlight of the project is a proposed baseball stadium that will sit adjacent to the Southeast Federal Center project. Forest City has the rights to develop retail and other uses adjacent to the proposed stadium. By committing to all of these projects, including Waterfront, a 13-acre project being developed in Southwest, D.C. Forest City Washington is making a major investment to the nation's capital city. With the Southeast Federal Center, the acreage adjacent to the proposed ballpark, and also the 35 acres at the Arthur Capper/ Carrollsburg site, the company has more than   100 acres of development in southeast and southwest D.C. Combining its efforts with the efforts of the District in marketing the waterfront, Forest City believes that the Southeast Federal Center will be the key to the renaissance taking place along the Anacostia River waterfront. “To find this amount of land in a major urban area in unheard of,” says Salzberg. “We have enough acreage to develop the critical mass that attracts numerous retailers. We also have the ability to offer a variety of locations in the greater D.C. area.” Forest City Washington believes a grocery store would be a good addition, and several are interested. Other interested prospects include various restaurants and specialty retailers not unlike those found in suburban lifestyle centers. “A grocery store can set the path for other retailers,” says Harriet Edwards-White, regional director of leasing for Forest City Washington. “Entertainment retailers, like theaters, would also fit well in the project, as there are few in the area.” — Randall Shearin

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