Housing Complex

Canal Plus: Could a Spiffier Waterway Help Georgetown Attract Retail?

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Don’t tell Josh Hermias there’s nothing new happening in Georgetown. The neighborhood may feel established, the economic development director of the Georgetown Business Improvement District says, but it’s experiencing its own boom along with the rest of the city. To wit: There are 21 residential units currently under construction in the neighborhood.

Of course, Hermias lays out his evidence with a touch of irony. He knows as well as anyone that Georgetown’s expansion looks puny in comparison to 14th Street NW, H Street NE, or Petworth, where new apartment or condo buildings of far more than 21 units seem to get announced every few weeks. For the most part, relative to areas with more room to grow, Georgetown is pretty maxed out.

“Georgetown is complete in most people’s minds,” says Hermias. “And that’s totally true for M Street.” Rents there, he says, are “extremely, extremely high.” Few mom-and-pop shops can afford to be on Georgetown’s main drag, and restaurants sometimes have to move out when their leases turn over. Well-heeled suburbanites and fashion-seeking tourists pack the street’s boutiques and high-end chains.

“And then we have this thing.” Hermias gestures at the Chesapeake & Ohio Canal, which, when we visit, hasn’t yet been refilled for the summer and is barely a foot deep in most places, if there’s any water at all. “It’s surprising how much the community loves this”—he pauses to search for the right euphemism—“waterway.”

A mule-drawn boat pulled 20,000 tourists a year along the canal until 2011, when it was decommissioned due to damage and safety concerns. Now the barge sits deteriorating on a wooden platform in the often-dry canal bed. A sign on the door of the canal visitor center reads, “CLOSED Indefinitely.” The towpath along the canal narrows to two feet at points, making it difficult to walk in pairs. Pipes stick out of the walls. We’re strolling the path on a sunny morning, but some moderate rain the day before left puddles that consume the full width of the path in many places, forming more of a canal than the one down below.

The last substantial work the National Park Service performed on the canal park, which it controls, was repairing damage after Hurricane Agnes in 1972. According to a Senate report last year, the maintenance backlog for the Chesapeake & Ohio Canal National Historic Park, which extends far beyond the District, was $117 million in 2012. The Park Service’s budget for the park that year was $10 million.

But if there’s one thing Georgetown has, it’s money. The BID is willing to chip in some cash of its own to assist with the repairs or even to pay for additional Park Service staffing, and is also hoping to solicit donations from local businesses, developers, and residents to help the process along.

The real target isn’t so much the canal itself as its surroundings, which could become more attractive if the canal park does. What could be some of the city’s most picturesque waterfront property is instead largely hulking office buildings, with names that hark back to the area’s long-ago industrial past, like the Flour Mill and the Foundry.

And much of that office space is vacant. The five-year average office vacancy rate for Georgetown’s canal and waterfront area is 12.8 percent. That’s not so far out of line with the city’s overall 9.7 percent rate as of last summer, the lowest in the country. But this is Georgetown, where space is at a premium and liquor licenses are so hard to come by that people camp outside the Frank D. Reeves Municipal Center for days for a shot at snagging one.

According to Hermias, rents on M Street can reach $200 per square foot “triple net,” not including taxes and fees. Just a block to the south, along the canal, office rents are around $40 per square foot, all costs included. That puts Georgetown near the very bottom of D.C.’s office-rent list, below Capitol Hill’s $54 per square foot or Southwest’s $50 or the Capitol Riverfront’s $44, as of late 2012.

Clearly, there’s a major discrepancy here. And the BID has an idea for fixing the problem: Turn the empty office space into retail. If just half of the ground-floor space in the office buildings south of M Street—home to most of Georgetown’s office space—is converted to retail, says Hermias, two-thirds of the vacancy would disappear.

“But you have to convince people to come down here,” says Hermias. “There’s some reluctance.”

Which is where the canal comes in. By sprucing it up, the BID hopes to make the canal area a prime destination for restaurants, with patios overlooking the canal and the adjacent recreation. Ideas include wider paths, shored-up walls, public seating that could extend over the water, new bridges over the canal, a restored barge, a revived visitor center, and a floating dock to launch canoes and kayaks.

There are, of course, challenges. The Park Service is not only short on cash but sometimes resistant to change, requiring some well-placed nudges from the BID to make any major alterations to the park. The BID has also called for the Alcoholic Beverage Regulation Administration and D.C. Council to take action to free up liquor licenses for use south of M Street, in part by cracking down on speculative liquor license holding, in order to entice restaurants.

Georgetown has seen its dining cachet plummet during the past five years. In 2009, the BID points out in its Georgetown 2028 report on the neighborhood’s current state and future aspirations, the neighborhood was home to six of Washingtonian’s top 100 D.C.-area restaurants. Now it has just two.

M Street has never been an ideal location for restaurants because its small buildings make them cram into little spaces or spread across two floors, says John Asadoorian, a veteran retail and restaurant broker who’s brought the likes of Fiola Mare, Sweetgreen, and Georgetown Cupcake to the neighborhood. The canal area offers a real opportunity, particularly if the waterway ceases to be just a “pile of mud with maybe a tire or two in it” for half of the year.

“Dining is just as much about the experience as the quality of the food,” Asadoorian says. “You can serve mediocre food but have a great experience and still do well. If the stock of space below M Street is available, it will lease.”

The transformation is already underway, albeit slowly. An office building facing the canal, which Asadoorian describes as “one of the ugliest brick buildings ever,” has become the Capella Hotel, with an outdoor restaurant overlooking the canal and rooms on weekends starting around $1,000 a night. More developments like that could make Georgetown’s southern half as vibrant as its main street, even if it won’t be for everyone.

“If you want to be a cool hipster, go open your restaurant on H Street,” says Asadoorian. “But if you want make a statement, come to Georgetown, because it’s underserved.”

Photo by Darrow Montgomery

  • Chris in Eckington

    I remember when there was more retail south of M (and the canal). There was Chelsea's, a dance club on Thomas Jefferson Street that had previously been a Champagne bar, and then there was the old discount movie theater in the basement of one of the office buildings. And then there was the popular Music City Roadhouse on 30th Street. I'm not sure about the former two, but in the case of the latter, I heard it was forced out because the other tenant/tenants in the building didn't care for it and wanted the space.

  • Peter

    "You can serve mediocre food but have a great experience and still do well."

    Judging by the restaurants in Georgetown, you don't even need the great experience.

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  • Steve

    If the Georgetown BID is interested in promoting Georgetown's image, they should consider keeping suburban stripmall stores out. TJ Max, DSW...what's next, Burlington Coat Factory?

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  • Fasicad

    Hey, it IS more than great coats...

    They should try to make it more of a destination (like San Antonio) instead of just making it prettier.

  • Jean

    I once lived on the canal, in a house I shared with three other roommates. My memories are great - albeit the rats that ran from house to house...over beams that connected houses. Also the fun observing the evening canal boats passing by with visitors (tourists), or locals who wanted to enjoy the scene.
    It was a great place to live and I shall cherish those days to my last.
    I would like to see the historical view retained... perhaps patio sources for public to enjoy the historical view.

    Let us keep history as it was established

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  • FBR

    I know few people who don't make the trek out to Georgetown because of the canal, to be honest.

    Call me crazy but I think the reason less and less people go out there might be related to the ever widening income gap and lack of disposable income due to ridiculously high rents within the nearby areas (Foggy Bottom, Golden Triangle, Downtown etc.). That combined with a lack of a Metro stop/art scene in the neighborhood might create the 1-2 punch that prevent people from visiting more often. Retail can only sustain itself so much and for so long.

  • Guy

    FBR: Seriously? Have you been to Georgetown lately? The place is overrun with visitors on any given weekend.

    Is it perfect? Nowhere near it. But just because you and the few people you know don't head out there doesn't mean "less and less people go out there."

    And a mix of retail and food sustains itself much longer than neighborhoods that only rely mainly on food/nightlife. Just ask the Adams Morgan BID.

    And Steve: Please explain how the Georgetown BID could keep "suburban stripmall stores out." You think a landlord is going to listen to the BID or DSW? Better to have a busy store than an empty storefront or a dying mall, as was the case with Georgetown Park.

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