Q&A With StonebridgeCarras Principal Doug Firstenberg
Bisnow: What kind of development is most needed or missing in Alexandria? How can Alexandria attract or otherwise facilitate that development? Could you distinguish between the features that Alexandria is unique in missing (if any), and the features that are more generally needed across the DC/NoVa suburbs, like greater urban infill?
Doug First: The opportunity in Alexandria is the opposite of Old Town. Old Town is a great urban, walkable area—lots of small shops, boutiques and restaurants. In Old Town, larger spaces—by this, I mean anything over 10k SF for retail—is impossible to find. True integrated parking does not exist. The opportunity is for integrated developments that provide for a mix of retail sizes and diversity and incorporate residential, office and hotel above. Adding proximate, accessible parking will broaden the regional draw for these developments in Alexandria.
Alexandria is an interesting mix of low-rise, organic development in the Old Town area, and Metro-oriented development near King Street and the Eisenhower corridor and soon-to-be-Metro-oriented development in Potomac Yards. So this relatively small jurisdiction in terms of land area and population is emerging as a major factor in mixed-use development. The difference in Alexandria is this type of development is just beginning to emerge from recent planning processes. It will compete with major mixed-use developments in Arlington, Fairfax and other areas on the region. Its charm, demographics and proximity to key assets should position the city and its projects to be very competitive in the marketplace.
Bisnow: What local characteristics of Alexandria are you leveraging to attract interest in your developments? What are the city's greatest strengths, and is there anything the city or developers can be doing to better take advantage of those?
Doug: Alexandria is a very walkable city. Its residents do actually walk and bike a lot—not just talk about it. Creating walkable, mixed-use developments that are Metro-proximate will be a huge advantage in the near to mid-term. In the Potomac Yards area, the mix of low and mid-rise buildings is very attractive. The high-rise buildings in Eisenhower are bringing a new dynamic. This type of overall environment is limited in the Metro DC area [and] should make Alexandria even more attractive.
Our focus is creating great places. We want great ground-floor experiences with retail and open space. For our Oakville project, we really focused on pedestrian and bike connectivity—bringing people to the heart of the project—our piazza. A great gathering place. This had to be balanced with the front door being on Jefferson Davis Highway with tens of thousands of cars a day. With the approvals gained in January, we are now focused on our retail anchors that will further define the project. Our design will definitely hearken back to the industrial history of the Potomac Yards but with a fresh feel and vibrancy. We want the charm of Alexandria but expressed in a new way.
The approach will be slightly different in what we believe will be the other major Alexandria growth area in Eisenhower. The development in Eisenhower is much more dense. The walking experience is very different, but still a key component. The Metro station is key as always, and there's a different type of regional connectivity due to the road network from the Capital Beltway. This provides an opportunity to diversify the draw of retailers, residents and users. This also provides a more regional opportunity for retailers—and for those needing to connect with Fairfax County or Maryland.
Bisnow: What are the greatest challenges involved in delivering a development as large as Potomac Yard? How does StonebridgeCarras meet them?
Doug: The greatest challenge is dealing with the very long timeline—generally at least five years from concept to opening a first phase. So you have two years from concept to gaining entitlements, then one year for pre-construction, and then another two years for construction. Then lease-up really begins.
We spend a great deal of time up front focusing on this time frame and trying to manage risk along the way. Getting key tenants to commit this far in the future is difficult, but if you want to create great mixed-use places, it is in large part driven by the retail. You need to have very special locations to gain a commitment three years into the future—much less five years. With zoning completed and our delivery window now inside of three years, leasing activity has increased dramatically.
We also focus on our capital structure. We need to carefully align the capital to meet the risk and timing profile for the project. It is extremely difficult to be “right” about the capital markets over a multi-year period, so getting the “right” partner early in a development project like these is essential. We always have to adjust. You name the opportunity or challenge—the entitlements change, assemblage opportunities, debt markets change. Having a partner that understands and can work with us to realize opportunities and address challenges is key.
Bisnow: What policies of the local government do you see as most impactful in helping to attract new business and development to Alexandria? Any you see as particularly detrimental?
Doug: As I said, Alexandria has an involved citizenry and hence the process takes time. Time is always a challenge for developers. That said, the city has been focusing on helping development succeed. The realization of the Potomac Yard Metro Station area is transformative. Having directly benefited from the NoMa-Gallaudet Metro station, we can see that Alexandria is going to benefit tremendously from the new station. It is also willing to listen to new ideas. Oakville was a new type of development for the city—they worked with us to find the right balance of uses to lay the foundation for its future success.