'The Last Frontier': New Projects, Retail Tenants Could Spark East Of The River Transformation
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Developers and brokers see big changes coming to Anacostia and Congress Heights, two neighborhoods east of the Anacostia River that have major mixed-use projects in the works and have begun to attract new retailers.
"It's the last frontier in the city," Papadopoulos Properties principal Tom Papadopoulos said. "In D.C. proper, everything mushrooms out and keeps pushing and pushing, whether it's Navy Yard, Southwest Waterfront, and then it pushes across the river."
Papadopoulos, who will speak June 19 at Bisnow's Washington, D.C., State of the Market, is leading the retail leasing for Columbian Quarter and St. Elizabeths East, two large-scale mixed-use developments east of the river spearheaded by Redbrick LMD.
Columbian Quarter is planned for 6.2 acres on Poplar Point near the Suitland Parkway-295 Interchange, across the street from the Anacostia Metro station. The five-building project is slated to include 1.7M SF of office, 700 residential units and 50K SF of retail.
Landing an anchor office tenant would help move the development forward and attract retailers, Papodopoulos said. He said he has gotten some interest from grocers and restaurant users, but it is still early given the project's anticipated 2022 delivery.
Construction is expected to begin this summer on the first multifamily component of the 2M SF redevelopment of the St. Elizabeths East campus. The 180-acre campus sits near the Congress Heights Metro station.
The first phase, led by Anacostia Economic Development Corp. and Flaherty & Collins, calls for the renovation of seven historic buildings into 252 mixed-income apartments. That component will be followed by up to 100 townhouses and a 217K SF office building with 38K SF of retail.
The campus will also soon be home to a new athletic facility, where the NBA's Wizards will practice and the WNBA's Mystics will play their home games. Papadopoulos said the $65M facility, expected to open in September, will help attract retailers to the area.
"It creates traffic," Papadopoulos said of the facility. "It's definitely a draw to the area."
Many neighborhoods east of the river are considered food deserts, and residents have protested to call for more grocery stores in the area. Papadopoulos said the area has not historically had a large stock of commercial property for retailers to lease.
"Except for the Pennsylvania Avenue corridor, there was really no retail to speak of, period," Papadopoulos said. "There was just no commercial property, a lot more residential. Now the game is changing with these two projects."
Retailers have begun to signal increasing interest in the Anacostia and Congress Heights neighborhoods in recent months. Starbucks in October signed on for its first stand-alone location east of the river, taking ground-floor space in a 114-unit affordable housing development at 2228 Martin Luther King Jr. Ave. SE, near the Anacostia Metro station. Three blocks away, Busboys and Poets is planning to open its first restaurant east of the river this year.
"I think [Chipotle] sees the market heading in that direction," WC Smith Senior Vice President Brad Fennell said. "There's a lot of excitement over what's happening at St. Elizabeths with the Wizards and Mystics facility and a fair amount of discussion about the Anacostia and Congress Heights Metros and development around there."
WC Smith owns the entire 50-acre site around the shopping center, which could be a future redevelopment play given its mixed-use zoning and proximity to the Metro station. Fennell said the company is focused on maintaining strong retail offerings now, but he does envision it as a potential development opportunity.
"I do think Alabama Avenue is an important spine connecting the nodes of activity from Skyland down to St. Elizabeths, and I think it'd be natural to see a progression of development along the avenue," Fennell said.
WC Smith is also co-developing Skyland Town Center, a mixed-use development at the intersection of Alabama Avenue, Naylor Road and Good Hope Road SE, roughly 2 miles from the Anacostia and Congress Heights Metro stations.
The project, a partnership with Rappaport, is slated for 500 apartments and 320K SF of retail. The developers broke ground in February on the first phase, which includes 263 units of workforce housing and 80K SF of retail, after getting a loan from EagleBank and securing EB-5 financing.
Walmart pulled out of its deal to anchor the development in January 2016 as part of a broader closure of over 150 U.S. stores. CVS signed on for 10K SF at the project, its only tenant thus far.
Fennell said the development team had positive discussions about Skyland Town Center's retail with several potential tenants at the International Council of Shopping Centers RECon retail conference last month, and he expects to build more retail momentum as the project comes out of the ground. He also expects the project to draw strong multifamily demand ahead of its expected 2020 delivery.
"We've already seen there's been a steady movement of some for-sale product that has been of interest east of the river," Fennell said. "There has been a fair amount of development with tax credits on the rental side, and this is a natural progression from that growth."
Fennell compared the area to the Capitol Riverfront neighborhood a decade ago, before a wave of development swept in that has brought thousands of multifamily units, office buildings and retail, including a Whole Foods in WC Smith's The Collective development that he expects to open late summer or early fall. While development in Anacostia and Congress Heights will not reach the same scale as it is in the Capitol Riverfront, he said the growth is following a similar pattern.
"East of the river doesn't feel as far away," Fennell said. "That's easy to see when you're down here for the Nats game or when you go to The Anthem at the water's edge. East of the river doesn't feel so distant."
Papadopoulos and Fennell will speak on the Expanding D.C.'s Horizons panel at Bisnow's Washington, D.C., State of the Market event, June 19 at 2112 Pennsylvania Ave. NW.