(rshsdepot) Union Station - Washington, DC

[Bernie Wagenblast <brwagenblast_@_comcast.net>]

D.C. vies for rights to prime Union Station site

Thomas C. Hall - Staff Reporter - Washington Business Journal

District officials are negotiating with the General Services Administration
to acquire development rights to the 15-acre site just north of Union
Station.

The federal agency faces a seven-month deadline to sell the development
site, where District planners envision a large-scale project that would be
built above the railroad tracks. Possibilities being discussed include
retail and commercial development, housing and transportation projects.

"The city is very definitely interested," says Ellen McCarthy, deputy
director in the D.C. Office of Planning (http://www.planning.dc.gov). "We're
investigating a variety of issues involved in acquiring it."

The site includes two large blocks on either side of H Street NE, and it is
the last infill development opportunity abutting Union Station. The site is
flanked by two new federal agency headquarters under construction -- the
Bureau of Alcohol, Tobacco and Firearms to the north and the Securities and
Exchange Commission to the southeast.

In the mid-1990s, the site had been touted as an alternative location for
the new Washington Convention Center, now under construction eight blocks to
the west. The site recently has been evaluated by city officials for future
sports facilities.

It's too small for baseball, but it's something to look at for the
Olympics," says Bobby Goldwater, president of the D.C. Sports and
Entertainment Commission. "This requires a little thinking outside the box,
but it would be great for a field house, theaters or parking."

Goldwater says the site meets the 15-acre requirement for a new baseball
stadium, but it is bisected by the H Street bridge over the rail corridor.
The largest block on the north side is about 9 acres, the southern portion
is 6 acres.

City officials also are discussing possible projects that would make Union
Station even more of a transportation hub than it is now.

The station sits atop a rail corridor used by passenger and freight trains
operated by Amtrak, Metro, Maryland Rail Commuter (MARC), Virginia Railway
Express (VRE) and CSX. The air rights site behind it is two blocks east of a
proposed link between Interstate 395 and Union Station.

GSA spokeswoman Viki Reath says Congress in 1997 ordered the agency to sell
the rights over the 15-acre tract at "fair market value," with the proceeds
going to the Treasury. At the time, the site was owned by Amtrak, which
relinquished development rights to the site as part of a massive federal
bailout.

Congress set a deadline of Sept. 30 for the sale, a deadline that has both
federal and D.C. officials scrambling to determine its value.

"We're having an appraisal done in the next two weeks, and that will
determine our basis for negotiation with GSA," says ElChino Martin, chief of
staff for Deputy Mayor Eric Price.

GSA studies of the site indicate that 1.1 million square feet of office
space could be built on five levels at the site.

But experts estimate it would cost more than $100 million just to prepare
the site for development.

"The economics probably dictate that the only real buyer is the D.C.
government," says a developer who has reviewed plans for the site.

"The cost of creating the platform over the tracks would be huge," he says,
as much as $300 per square foot. "There's a built-in `land cost' of over $60
per square foot before you pay GSA anything."

The supply of large, buildable sites downtown is drying up, forcing
developers to think creatively. Another air-rights deal that closed recently
is a project to build several floors of office space above the Hecht's
department store at 12th and G streets NW.

District officials say the proposed air rights development would provide an
important link between residential areas east of Union Station with the
North Capitol Street commercial corridor to the west.

It also would augment the city's current thrust to spur new, mixed-use
development in NoMa, the area north of Massachusetts Avenue.

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