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With Amazon Promising Huge Changes, Crystal City's Underground Mall Left In Limbo

ARLINGTON, Va. — Paata Tsikurishvili opened the door to his studio with a smile on his face. Dressed in all black, the bearded artistic director of Synetic Theater chats about the company’s upcoming season, pointing to black-and-white photos of the company still hanging on the wall.

But his eyes look tired, and often drift to a steadily growing pile of boxes on the far side of the room. While preparing his troupe for its upcoming production of “Cyrano de Bergerac,” Tsikurishvili is also preparing for a more unwelcome project: relocating. 

The avant-garde theater has performed in the Crystal City Shops for close to 10 years, but Synetic’s lease was not renewed this past summer by landlord JBG Smith. It’s moving out, and Amazon is moving in.

The Crystal City Shops, an underground mall in Arlington, Va.

Crystal City's main street, Crystal Drive, can be almost empty on a rainy day despite its daytime population in the tens of thousands. But just a few feet below the surface, the Crystal City Shops underground shopping mall teems with activity.

Stretching between 15th and 23rd streets, more than 100 storefronts welcome commuters through its winding passageways from its direct entrance to the neighborhood’s Metro station. 

But after more than 40 years of sheltering shoppers, the Underground, as it is known locally, is in the midst of seismic upheaval. 

Of the 88 storefronts underneath 1750 Crystal Drive, 42 were vacant this week when Bisnow walked the corridors. Underneath 2100 Crystal Drive, another section of the subterranean shopping center, close to a third of the storefronts were darkened or wrapped in JBG Smith’s bright blue advertising. Even national tenants like Starbucks and Potbelly have gone dark. The tenants that remain have more questions than answers about their future.

“The general consensus has been a lot of the places aren’t getting their leases renewed in anticipation of renovations and Amazon moving in,” said Thomas Beholer, a librarian at the Arlington Connection, a small public library in the Underground across from what was until recently Au Bon Pain. 

Beholer said the bakery mysteriously closed its doors just a few weeks ago, without explanation. The Connection’s lease is good until the end of 2019, but neither Beholer nor his manager know if it will be renewed, he said.

As for Synetic Theater, a spokesperson for JBG Smith told DCist last year the landlord “look[s] forward to the Synetic Theater completing another successful season at 1800 South Bell Street. Arts and cultural organizations are key components to a thriving mixed-use community, and we continue to explore opportunities for the theater to relocate within National Landing.”

Tsikurishvili is hopeful that JBG Smith, or even Amazon, will help Synetic relocate. The troupe built community in the area, he said, and could continue to bring people together as Crystal City undergoes yet another major transition. 

“Alexandria, perhaps,” he said. "Though maybe it would be better to go to Downtown Washington. People don’t like to cross the 'Potomac Ocean' for theater."

In a December interview with Bisnow, JBG Smith CEO Matt Kelly didn’t have a clear answer when asked what would happen with the sprawling Crystal City Shops, which JBG Smith took full possession of in August. 

“We’ll have to see,” he said. 

'There Was No Plan'

When the Crystal City Underground opened on July 1, 1977, it was billed as a “turn-of-the-century shopping village,” featuring cobblestone walkways, restaurants and stores. But it certainly wasn’t part of Crystal City’s original plan. 

The entrance to the Crystal City Shops at 1750 Crystal Drive. Amazon has agreed to lease the building after it undergoes heavy renovations.

“There was no plan for Crystal City — it was a series of very lucky opportunities that my father was smart enough to take advantage of,” said David Bruce Smith, the son of Robert Smith, the developer who built Crystal City into what it is today. “When he brought my grandfather to Crystal City, my grandfather told him to landscape it and get out. He was not convinced it was a good location.

"But my father believed that people would be willing to come over the bridge — it was near the airport, near Capitol Hill — and he was right.”

The Underground was set to open alongside the area’s Metro stop. It was intended to allow commuters and visitors to be able to shop and go to work without having to step outside, and it worked. 

“This was the 1970s attempt to make Crystal City a destination,” Smith said. “Everything was inside-oriented. Then, in the mid-'90s, the philosophy changed, and everybody wanted something on the streets. So we brought everything onto the street, which warmed the city up. And Crystal City emerged into what it needed to be.”

The Smiths built retail along Crystal Drive, which is now home to several national credit tenants like Chipotle, Chick-fil-A and Cosi, alongside local businesses We, The Pizza and Jaleo. While plenty of retail has come to the surface, Smith said the Underground is the cultural heart of the longtime office hub. 

“That’s what made Crystal City successful: small tenants, individuals,” he said. “We have had a barber shop in the Underground for over 30 years. They add something, they make places less institutional. That’s what the Underground was, it was all small businesses. Now, economically, you can’t survive anymore without a mix of the small and the big.”

The shops filled up, followed by the street-level retail. Government contractors and office space for the Defense Department filled millions of square feet in the office buildings built on top of the Underground. With Reagan National Airport on one side of the complex and the Pentagon on another, the area flourished.

The Crash And The Comeback

Crystal City was a reliable economic engine for Arlington, until 2005 brought an unwelcome surprise to the burgeoning area. The Base Realignment and Closure Act — the last wave in a series of four initiatives to end Cold War alignment and close military installations — rocked Crystal City’s office and retail growth. 

The Arlington Connection Library in the Crystal City Underground

BRAC effectively resulted in the loss of close to 14,000 jobs in the neighborhood, and approximately 4.2M SF of office space went vacant. With the loss of thousands of customers, local retail immediately took a hit. The Crystal City Business Improvement District, established in the aftermath of BRAC, was formed to help the neighborhood recover and inject life into the long-dead streets.

But the BID couldn’t avoid the 2008 Great Recession, which only further exacerbated Crystal City’s decline. With office and retail stymied in the area, the neighborhood was stuck in limbo for years.

By 2008, redevelopment plans were set in motion to create a larger sense of community amidst Crystal City, tying together the fragmented region. Developer Vornado/Charles E. Smith, the successor to the Smith family real estate business, stepped in to help county officials revamp Crystal City by bringing in new restaurants, coworking spaces and more. The goal was to make Crystal City not just a daytime destination for government workers, but rather the live-work-play destination workers and businesses began to crave. 

By 2010, Chick-fil-A had settled on Crystal Drive, followed by We, The Pizza in 2014. That same year, was extolling Crystal City as a tech hub. By 2016, the New York Times wrote that Crystal City was “rebooting itself.” Startups like WeWork, 1776 and TechShop started to move into the neighborhood, and its population of young people swelled. Vornado/Charles E. Smith President Mitchell Schear compared it to Brooklyn, New York. 

“You’re close enough, but you’re not paying higher taxes and utilities,” he told the Times. “Here, we are a slightly geekier crowd, and we are embracing it.”

After close to a decade of stagnation, Crystal City was showing signs of life. Then, on Sept. 7, 2017, Jeff Bezos announced the search for a new city for Amazon to call home. 

'Emerging Into What It Needed To Be'

What came next were 14 months of frenzy. More than 230 cities applied to win Amazon’s favor, sending politicians and developers into a commercial real estate rat race.

An aerial view of the National Landing area showing the planned Amazon campus and JBG Smith assets

In January 2018, Amazon narrowed its choices down to 20, and the D.C. area had three localities — D.C. proper; Montgomery County, Maryland; and Northern Virginia — on the list. Almost immediately, the region started to be seen as the favorite. As prognosticators tried to figure out exactly where the $5B project would go, Crystal City looked more and more like the sensible choice. JBG Smith’s stock price rose as investors took notice and placed their bets.

Finally, in November, “National Landing,” a new neighborhood that encompasses Potomac Yard, Pentagon City and Crystal City, was chosen to house half of Amazon’s promised headquarters. The other half will be placed in Long Island City — Shear turned out to be a borough off in his comparison.

Amazon has agreed to lease three office buildings in Crystal City during the first phase of its headquarters build-out, including 1770 Crystal Drive, which hovers over a significant portion of the Underground, and 1800 South Bell St., Synetic Theater’s building. At this point, Amazon has yet to disclose specifics around its lease, but JBG Smith plans to spend $80M to renovate 1770 Crystal Drive and spend $10M to renovate 1800 South Bell.

On the ground, JBG Smith plans to develop a 130K SF retail and theater project toward the end of this year. The development will include a four-story retail building, anchored by an Alamo Drafthouse Cinema, as well as the addition of a grocery store at 1550 Crystal Drive. 

“One of the issues historically has been that there have not been enough spaces on the street level to accommodate some of [the Underground’s businesses],” Kelly told Bisnow in December. “That’s one of the nice things that all of these new buildings we are planning will do. They give us a lot of square footage we can lease to successful concepts and to concepts that add to the sense of place and the vibrancy of the streetscape and the neighborhood.”

In addition to the new retail project, JBG Smith is planning to build a 750-plus unit apartment building at 1900 Crystal Drive, in between the two entrances to the Crystal City Shops.

“There will be, inevitably, some retailers who are in the Underground currently who will want to move to some of those street-level spaces,” Kelly said. “We can’t tell you exactly who those are and which ones those will be just yet, but we do expect some of that to happen.”

If there is a universal feeling among workers in the Underground, it is one of confusion. It remains unclear which tenants are leaving temporarily while awaiting renovations — such as Potbelly’s, where a manager assured customers they would return once renovations in their wing were completed — and which tenants are gone for good. 

Smith hopes Amazon and JBG Smith will be kind to the tenants still remaining in the Underground. 

“Amazon can do some really good things,” he said. “It can add variety, it will decrease or eliminate the vacancy in Crystal City. I hope there will be a good mixture of large and small, but with as few people as possible being hurt by it.

“I just hope they don’t price people out of the market. I would hate to see those people being priced out, or having their businesses flattened. It would be against what my family believes in. There’s nothing wrong with progress — but it shouldn’t hurt people. It should help people.”