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Hillcrest eyes new retail center
Funding remains a major hurdle for Skyland project
(Published April 5, 2004)

By JULIA BILZ
Staff Writer

Residents of the Hillcrest neighborhood are holding their breath. After years of talk and empty promises, steps are finally being taken to revitalize the Skyland shopping center.

"Residents are overwhelmingly in favor of the project," said Kathy Chamberlain, chairman of Advisory Neighborhood Commission 7B.

Today, Skyland doesn’t look much like a shopping center. There are several free-standing buildings on 11.5 acres, none of them in very good condition. The land, where Alabama Avenue SE converges with Good Hope and Naylor roads, is divided into nearly 50 parcels owned by several different people.

Among the businesses and offices in the shopping center are two laundromats, a Social Security office, and a discount store. After government intervention, a revitalized Skyland is expected to offer a more uniform, 17-acre shopping center with nationally known retailers.

"Right now, it’s not a benefit to the community – it’s a burden," Chamberlain said.

The shopping center houses a liquor store, which, neighborhood residents have complained, has become a magnet for loitering, public drinking and large amounts of litter. There is also a strip club in the area, contributing to late night noise and late night drug use behind the shopping center, Chamberlain said.

Such establishments make Skyland less desirable space for other businesses. Residents want better retail establishments close to home, rather than taking their money to Maryland and Virginia, Chamberlain said.

The Rappaport development team was chosen to help revitalize the center. The proposed redevelopment plan includes space for a discount department store, a grocery store and neighborhood retail stores. The plan for the new center also features urban streetscapes and open community space. Target, Shoppers Food Warehouse, as well as home improvement and clothing stores have already shown interest in the site.

"Opposition to redevelopment has never been expressed by any community member," Chamberlain said.

Nearly 30 people testified at a public hearing March 23 to show their support for the project.

"I have never seen the neighborhood come together in such great numbers," Chamberlain said. "I was so impressed."

The new shopping center plan promises to bring new employment opportunities and greater tax revenue to the city. After completion, the new Skyland is expected to offer 400 jobs, instead of the 100 today. Property tax revenue is expected to jump from $173,000 to $715,000.

"It would serve as a catalyst for additional housing and other community development projects," Chamberlain said.

Groundbreaking for the project is expected in the middle of 2006 and completion is expected in late 2007.

But funding for the project remains a major hurdle.

Deputy Mayor Eric Price and the National Capital Revitalization Corp. (NCRC) are spearheading the redevelopment of the nearly 250,000-square-foot shopping center. It is estimated that the District will need to spend more than $40 million to redevelop Skyland. The NCRC plans to invest up to $17 million of land sale proceeds. With this arrangement, the D.C. government plans to pay $8.5 million to NCRC for investment in Wards 7 and 8.

The District is planning to apply for a $28 million Section 108 HUD-issued federal loan to help NCRC fund the project. A series of public hearings on the loan application, which requires city council approval, has begun. If the council votes to approve the application, it will be submitted to the U.S. Department of Housing and Urban Development for a funding decision.

The process takes time, but Chamberlain said residents think it’s worth the wait.

"We’ve waited for so long, having a bill introduced is more than anything that has ever happened so far. We’re just delighted," she said.

The NCRC plans to use money from the Section 108 loan to buy land, relocate current tenants and build the new Skyland. The money borrowed under Section 108 would be repaid with taxes generated by Skyland. The D.C. government is required to underwrite the loan with its future federal Community Development Block Grant funding, in case the taxes cannot cover loan repayment costs.

"The financing plan is solid and sound," Chamberlain said. "This loan is a reasonable risk that will spark private sector investments while substantially benefiting the District."

In addition to funding, two other hurdles stand in the way of the Skyland redevelopment project: eminent domain legislation and historic landmark designation.

Skyland is currently made up of 47 land parcels with 16 different owners. Under eminent domain, the government can force owners to sell their businesses for the good of the community. Eminent domain powers are seldom exercised in the District, but Chamberlain said in this case, city council members have generally expressed support. The council is expected to vote this summer on a bill proposing exercising eminent domain.

In what supporters of the redevelopment believe to be a delaying tactic, one current Skyland landowner has applied for historic landmark designation. Discount Mart is located in what used to be the Naylor Theater. The theater was built in the 1940s and the building has been renovated and remodeled since. The marquee is gone and there are no visible signs that the building housed the theater of years ago.

"The community thinks it’s laughable," Chamberlain said. "We oppose the preposterous application for historic landmark designation."

A public hearing on the historic designation application is scheduled for April 29 before the District’s Historic Preservation Review Board.