Sentinel Square, Trammell Crow's Three Phase NoMa Project, Reaches Halfway Point

Trammell Crow's massive three-phase NoMa development, Sentinel Square, is officially at its precise midpoint.

"We just hit the bottom of the hole for Phase 2," says Tom Finan, Managing Director at Trammell Crow.  "Now we're starting to work our way up.  We broke ground back in February and we're on track to deliver in October 2012."

The Phase Two office building, at 1050 First Street, is slated to offer approximately 280,000 square feet of office space over twelve stories.

The Smith Group/JJR-designed building may or may not feature ground floor retail space.  "That's something we're going to look at," says Finan.  "It's going to depend on the market.  That intersection is becoming a sort of crossroads for that area, so it might be a good idea.  But as of right now, it's still up in the air."

The first phase, a similar but larger 12-story 400,000-s.f. LEED Gold office tower, also designed by Smith Group/JJR, was delivered in June 2010.  The third and final phase, another office building, is still in pre-planning stages.

"We're not going to really get down to Phase Three until we have the second phase delivered and leased and stabilized," Finan said.

Sentinel Square II was financed on spec by European companies Helaba and Nord LB, which collectively put up $181 million towards completion.  Though financing a project of this scale on spec is somewhat unusual (but so were 1812 N. Moore and CityCenter), investors were reportedly reassured by the fact that Trammell Crow has already leased 85% of Sentinel Square I, to such tenants as the Department of Veteran Affairs, and other federal agencies.

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Howard Town Center - Looking Toward 2015

After years of postponed deadlines, the Howard Town Center is hobbled by more delays. "We're looking at 2013 at best, though it could be as late as 2015," says KLNB Associate Jennifer Price, who is working on leasing. Howard Town Center is a mixed use concept that would bring a grocer, retail, and condos to a underutilized corner of Georgia Avenue near Howard University.

The hitch? Finding a grocery to anchor the space. "Everything is dependent on the grocer," said Price. "Until we secure one, we won't know how much square footage of retail space we'll have available for other businesses." Price says "quite a few" are vying for the space, but one thing is for certain: it won't be a Giant, since the O Street Market project knocks the store out of contention. Price projects that plans for Howard Town Center to firm up by May.

Howard Town Center at 2100-2146 Georgia Avenue is the proposed development of CastleRock Partners and Howard University to take the place of the Bond Bread building and offer 70,000+ s.f. of commercial property, a 45,000 s.f. supermarket, 300 to 450 residential units, and parking. All of this, says, Price, is dependent on the grocer, how much square footage it would entail and its architectural plans.

Perhaps one reason grocers are reticent to stake claim to the property is because of the new Safeway now planned for middle-Georgia Avenue and the Yes! Organic Market already up the street, in addition to the Giant slated for Shaw. Back in 2009, Philadelphia's Fresh Grocer was a top contender for the site; their corporate office confirms the location is still under consideration."The Fresh Grocer is very interested in and committed to new store development in the District of Columbia, especially at the Howard Town Center," said Patrick J. Burns, President and CEO of The Fresh Grocer. "We have been working with the investors and developers of Howard Town Center for years and are disappointed that the project has stalled. However, our interest in bringing a ground-up, state of the art Fresh Grocer supermarket to the Howard Town Center remains steadfast."

The script for Howard Town Center has a long and colorful backstory, which includes the 2006 land swap of the city-owned Bread building property for Howard's land at Florida and Sherman Avenue, for which the city will solicit bids for a mixed-use property that would include 300 residential units.

Earlier in its illustrious life, the Bond Bread building was wedded to the People's Involvement Corporation (PIC), a 30-year tenant. The non-profit was promised ownership of the property in a verbal agreement with Mayor Washington in 1965. When it was not granted, PIC sued in 2003 and lost, naturally, with the court concluding that "a mayor's written promises cannot be relied upon."

Trammell Crow Company was the initial developer in the projects early stages, but the university did not have control of the land until 2008, at which point the project was up for bid and Howard opted for CastleRock Partners' proposal in November of that year.

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Costco Tantalizing DC's Gateway

Twenty years in the making, and plans to develop Washington DC's first Costco at Dakota Crossing are still trudging along. The stage set is a remote patch of forested land in the Fort Lincoln neighborhood, better recognized as the land opposite the Washington Times on Route 50. The players are likely to be Costco and Target, potentially Shoppers Food Warehouse and Staples, even Walmart was once in the lineup. The director is Fort Lincoln New Town Corporation, which brought in Peterson Companies to develop retail as part of a mixed-use, suburban-style shopping center with housing, offices, retail and acres of parking lots. When Peterson bowed out in 2007, Trammell Crow Companies stepped in to oversee its stock and store - big box power centers. All that is missing is the financing and wetland remediation plan approval from the city. And, of course, final commitment from at least one of the big retailers.

The site seems a developer's dream: 42 empty, contiguous acres, flanking one of DC's main migratory routes. Because it is situated in the residential Fort Lincoln neighborhood and nearby industrial uses are mostly defunct, residents pine for a major retail center somewhere, anywhere, in their quadrant. The plan shows 430,000 s.f. of retail served by 2500 surface parking spaces, connected to a 362-acre housing development planned across the street - The Village at Dakota Crossing, with 537 townhouses, 30 affordable workforce units, 500 more parking spaces and a pedestrian-friendly layout with wide sidewalks, tot-lots and community spaces. The land is a stone's throw away from the National Arboretum and within a 5-minute walk of the Anacostia River

But development has hit two main obstacles. The first is getting retailers to commit to a large project in a suburban setting, which tests current financing models, although Costco has signed a non-binding Letter of Intent to occupy the property. The other is the dated nature of the plans: 20 years ago, paving over a large, unused plot in the city to build a regional shopping center would have easily passed city government hurdles, whatever the environmental or historic implications. But the contentious, yet sought-after site is now entirely forested and home to wetlands, filtering nearby industrial waste and acting as a natural barrier against flooding.

"Our plans call for creating new, high quality wetlands near the retail center as mitigation for taking away the existing wetlands, which have been documented as very low quality, marginally functioning wetlands. These plans are currently being reviewed by the U.S. Army Corps of Engineers and the EPA, and will be reviewed by D.C. DOE once the federal regulators finish," said Cel Bernardino of Fort Lincoln New Town Corp. He also noted that the current plan "envisions a model 'green' shopping center with cisterns, green roofs, green walls, and other LID (Low Impact Development) measures."

Costco has been eying this site for the past ten years. Target and Shoppers do not lag far behind in enthusiasm. They might all benefit from TIF (tax increment financing) subsidies from the District, which has supported the development as a neighborhood improvement initiative. Costco alone expects $15 million in TIF financing. But the District must mediate between the environment, small business owners who have fought the behemoth onslaught of all-in-one-for-a-portion-of-the-price big boxes, and competing revitalization projects throughout the city.

"The Office of Planning has worked very closely with the development team to ensure the project is green and pedestrian friendly," reported Victoria Leonard, Director of Policy and Strategic Communications in the office of Ward 5 Councilmember Harry Thomas, Jr. The District likes it so much it plans on paying $3 million upfront to build retention ponds to offset the 3000 new parking spaces. The funding would come out of the D.C. libraries capital budget, an initiative spearheaded by Council Member Thomas, who noted that "the Shops at Dakota Crossing have been in the books for a decade" back in April of 2009. The funds are being transferred from a Ward 7 libraries project, which should begin to see repayment in 2011. Ward 5 library services will remain unaffected.

According to data on the Deputy Mayor's website, Dakota Crossing envisions that residents would walk to the shops from the Villages, suspending disbelief that shoppers at Costco and Target could buy anything that could be carried by hand. An additional wrinkle is that HUD approved an Urban Renewal version of the Fort Lincoln Redevelopment Plan in 1972; amended in 1990, the plan requires 3000 units of housing, 2463 units more than Fort Lincoln New Town's current proposal.

Cel Bernardino recounted the various phases of housing that have already been built under the 1970s Urban Renewal Plan for the Dakota Crossing site. About 1370 residential units, including condos and rentals were built at Fort Lincoln New Town during the 1980’s and 1990’s, with most of the rental units built for senior citizens. The 127-unit Wesley House seniors apartments opened early last summer, and 209 "Dakota Crossing" town homes were completed last month. "We have two additional planned residential developments (town homes and condos) that construction hasn’t started on yet – the 334-unit 'Village at Dakota Crossing' across from the shopping center, and the 50-unit 'City Homes' development at the corner of Bladensburg Road and Eastern Ave."

Robert King, Commissioner on ANC 5A12 (Advisory Neighborhood Commission), has been involved in planning Dakota Crossing since the 1970's. He's seen developers come and go, and has remained a reliable supporter of the plan, representing the leading voice of the commission he heads: "The project is finally on track. Some of the first residential units to break ground will be dedicated to firefighters and school teachers, and I am happy about that. The neighborhood is bracing itself for the development of Costco, which is expected to bring jobs, but also increase traffic."

He believes the 1970's plan calling for 3000 units of housing was too ambitious and needed to be scaled back in a neighborhood of just 4000. "There is a significant retirement community in Fort Lincoln, and I am concerned about access to the retail site." Mr. King said he has been trying to organize a bus service to transport seniors across Fort Lincoln Dr. and 33rd Place.

Although a contender for a Dakota Crossing spot a few years ago, Walmart is out. The city refuses to provide subsidies to the union-shunning employer. Nevertheless, word on the street is that Walmart may yet settle into the neighborhood, but now on triangular site bounded by New York Ave., Blandensburg Road and Montana Ave., the site of the Abdo project that fell apart earlier this year. From a traffic perspective, the development of two big box retail sites in such proximity could produce a tangle at what is already a busy thoroughfare. In an area that lacks Metrorail, the arrival of the big boxers and all the parking infrastructure that comes with them does not foreshadow a favorable future for TODs (transit oriented developments).

The architects of the proposed retail development at Dakota Crossing, Bignell Watkins Hasser, with offices in Annapolis, MD and Vienna, VA, have built several local retail centers at both the neighborhood and regional scales. The big box retailers would create what is estimated at 800 new jobs by establishing what developers hope becomes a regional destination, capturing incoming and outgoing DC traffic at the entrance of the Baltimore-Washington corridor.

"I want everybody to know from here to Timbuktu that Fort Lincoln is getting ready to complete plans for Costco. We want to make sure we can tap into every dollar for the city and create as many construction and other jobs as possible" said King, who echoed concerns about the wetlands and retention ponds on the new development site. Area residents seem enthused. "I think its hard to argue against development in one of the last development holdouts in DC" said Hans Posey, who moved to the neighborhood recently. "Its a very established neighborhood, but everybody, everybody, in the neighborhood is gunning for something bigger, something more than the kind of stores that are there now."

Cel Bernardino estimates an August 2011 groundbreaking for the retail part of the development. "I’d say Spring 2011 would be the soonest we are likely to break ground on the shopping center. We have 'solid' commitments from our anchor tenants. No leases signed yet." The current site plan/design for the shopping center received concept design approval from NCPC on June 3, 2010.

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