Housing Complex

Cloudy Skyland

Cloudy Skyland

It’s a breathtaking vision: at the crest of the District east of the Anacostia River, a 16-acre urban campus clustered around an intimate central main street. Cafés spill onto the sidewalk, which gracefully curves to match the bend in Alabama Avenue SE. Townhouses and five-story apartment buildings house hundreds of residents. Visitors from miles around come to shop at the area’s first full-service department store, and maybe end their trip with dinner at a sit-down restaurant. It even has white tablecloths.

In reality, Skyland Town Center is only breathtaking in its barrenness. A run-down Murry’s grocery store and CVS are pushed to the edges of a vast parking lot, which is divided further by an empty post office and liquor store. The shops along Alabama Avenue have seen much better days, and only half are open. Business trickles into a nail salon, beauty shop, two chicken places, dry cleaners, and a discount mart.

An upgrade is already decades past due. Local residents have fought for years over what should happen at Skyland, and the city has tried to dislodge more than a dozen separate owners through the power of eminent domain. Mayor Vince Gray, who lives in the nearby Hillcrest neighborhood, shot the project to the top of his economic development list following last year’s election, promising to deliver the whole 16-acre property to a development team led by the Rappaport Companies within 22 months. After six years of grinding litigation, 16 cases have dwindled to one. The courts have largely rejected landowners’ arguments against the legitimacy of the city’s move to take their properties, and more than $12 million in federal funds has been paid out for settlements. The end can’t be far away.

What happens after that, though, is less clear—and beyond the city’s control. According to settled eminent domain case law, in order for a government to take private land and give it to another private owner, it must demonstrate that the land is blighted, and that the new owner’s plan would serve the public better. But as the District itself has argued, it never has to prove that the plan will actually work.

That’s the current sticky point. The Skyland plan will cost around $220 million, offset only slightly by $40 million in tax increment financing from the District. Rappaport declined to discuss their progress in lining up investors, but with no anchor tenant, their prospects don’t look good. So even after all the work and expense of getting the tenants out, there’s no telling how long their stores will stay empty once they leave.

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The Skyland site plan.

For years, the Skyland plan has been a battle cry for residents of well-to-do Hillcrest—and the politicians who listen to them. Special legislation was passed to allow for the use of eminent domain in the District, and the federally-backed National Capital Revitalization Corporation got to work, offering property owners large chunks of money to move.

When former Mayor Adrian Fenty killed the corporation, those offers were revised dramatically, prompting appeal after appeal in the courts. The contentions were almost always the same: That the stores were doing well enough on their own, and the area wasn’t ready for the kind of development the District was trying to make happen.

“In my mind, that center was serving a community need. And if some people in Ward 7 didn’t like it, so what?” says David Burka, who used to manage about 40 percent of the site from his Macarthur Boulevard NW real estate office, far across the city from Skyland. “They had an opportunity to do what they were going to do across the street [at Good Hope Marketplace]. The stores that we had in the old Skyland were doing business.”

For years, Rappaport and the District talked about moving forward on a deal with Target, which would draw investor interest and other retailers. Just have to get the lawsuits wrapped up, they’d say.

Target may have gotten tired of waiting, or maybe the company never planned on coming in the first place. Either way, they leased space in Columbia Heights and Fort Lincoln instead. With that option gone, Gray tried to muscle Walmart into saving the center, threatening to oppose its other four stores in the District if the world’s biggest retailer didn’t come to Skyland.

Walmart says it may still do that. But even with its willingness to adapt to new “urban” conditions, Skyland isn’t a slam dunk: It’s neither on a Metro stop nor along a major commercial corridor like Georgia Avenue or New York Avenue. Plus, it would only be a 15-minute drive from there to Walmart’s planned location on East Capitol Street, also managed by Rappaport.

“It’s a little bit of putting a square peg in a round hole,” says a developer working on sites east of the Anacostia, who asks not to be named criticizing the city’s top retail priority.

But that’s not the only way the deck is stacked against Skyland. It’s also competing with other, more obvious development sites: St. Elizabeths East, right across from the new Department of Homeland Security headquarters, and, farther north on Martin Luther King Jr. Avenue SE, Poplar Point. Smaller shopping centers like Penn Branch, South Capitol Street, and Fort Davis are ready to go. CityInterest’s plan for housing, office space, and retail at Kenilworth-Parkside is well underway. On Georgia Avenue, the former Walter Reed Army Medical Center is generating serious developer and retail interest. Add in any number of smaller sites scattered throughout the city’s wealthier and more accessible sections, and it’s not entirely clear why District officials are so bullish on drawing development to Skyland.

Meanwhile, credit markets are tightening up nationally, after a brief bloom of activity. Washington remains the healthiest local economy in the country, which is why projects are still moving forward at all—but only in the most surefire neighborhoods. Savvy investors and risk-averse retailers can still find plenty of financially safe locations without crossing the Anacostia, and many good prospects are still searching for capital, turned down by bank after bank.

Those who’ve already left the shopping center look back at their empty stores and wonder if it was all really necessary.

“Business was great. That’s what really bothers me. Every business that I know of was thriving,” says Marion Fletcher, who employed eight hairdressers at her beauty salon, which she shuttered a few years ago rather than relocate. “And now the economy’s so bad and they come along and close you down, and all this time, they haven’t done anything.”

Those that remain are looking for spaces nearby where they can continue to serve their clientele, but say nowhere viable has affordable rent. The city will either pay their relocation expenses, or give them a flat sum of $20,000 to close up shop.

“That’s like basically walking away and getting nothing,” says Farida Ahmadi, whose brothers opened New York Fried Chicken in Skyland ten years ago. She says they put around $180,000 into the building, and would now have to buy out their business partners for more than the city is offering. They fought the relocation for a while, but legal expenses grew higher than they could bear. They’re now looking for space in Northern Virginia.

Why does Rappaport think they’ll be able to make Skyland happen? According to a spokeswoman, the developer hasn’t done a feasibility study that could make the case to a potential financier—like a bank, a pension fund, or a federal agency like the Department of Housing and Urban Development—that the site would guarantee a return on their investment. Neither has the Washington D.C. Economic Partnership, which is charged with promoting development across the District. According to the city, the last economic analysis Rappaport did was under the National Capital Revitalization Corporation, making it at least four years old. The national economy has tanked since then. If there’s a case for emphasizing Skyland over any of the District’s other retail opportunities, it’s emotional, not empirical: This has been in the works for so long that we can’t turn back now.

If Rappaport doesn’t pull together the financing, Skyland wouldn’t be the first failure of an eminent domain regime born out of a 2005 U.S. Supreme Court case, Kelo v. City of New London, which allowed governments to take private land for private purposes. The land in question there, a parcel taken by the city for a giant private redevelopment project that included a research facility for the pharmaceutical company Pfizer, is still empty after the developer failed to obtain financing and Pfizer left town entirely. In the case of Kelo as well as Skyland, there seems to be a missing part of the equation: If you have to prove that the imagined future is better than the present, shouldn’t you also be able to prove that the future might someday come to pass?

For now, with the future still on hold, the District is working on demolishing some properties from which they’ve evicted tenants to make room for something else until the grand scheme falls into place. The interim use could be anything from pop-up retail to a community garden. It better be a good choice, because it could be there a long while.

Photo by Darrow Montgomery

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