Rockville weighs Duball project

By Tom Ramstack
February 15, 2007

Developer Duball LLCis scheduled to find out this month whether Rockville city planners will give final approval to its plans for a $240 million residential complex downtown.
The two towers for residences and retail space would renew a project that developer Akridge Cos. and its financial partners sold to the Reston company in April 2006 for $34.5 million.
The development plan evolved with the Rockville City Council's ideas for revitalizing downtown.
At one point before selling out, Akridge was compelled to lower the height of the planned buildings in the face of opposition from city officials who said the buildings would tower over downtown.
The revised plans called for the height of the towers to fall from about 220 feet to 173 feet on one tower and 143 feet on the other.
The project gained notoriety among developers for the clashes it created with the City Council.
The site one block west of the Rockville Metro station was originally intended by a joint venture to be used for a 22-story office building in the 1990s. The developers later decided to build a residential complex on the site but still make the buildings 22 stories high.
But as Rockville's plans for a downtown revitalization moved closer to reality, city officials intervened by lowering the height limit they would allow. They also said they no longer wanted an office building.
"The mayor and City Council are very concerned that whatever is built there meshes with our Rockville Town Square revitalization," said city spokesman Neil Greenberger.
The revitalization included stores, open spaces, county offices, a new public library and entertainment outlets. The grand opening is scheduled for May 15.
Duball's Rockville Town Center project would be built in a parking lot adjacent to the Town Square along the intersection of East Montgomery and Maryland avenues. The parking lot will be replaced by underground tiered parking spaces.
"They really want to do this right and part of doing it right is getting all the parcels that are getting built there to fit in," Mr. Greenberger said.
Previous developers said that each time there was a change of personnel on the City Council, they had to go back and rejustify their development plan.
Mr. Greenberger said the City Council changed its mind about using the site for an office building because "then your business district falls asleep at 5 p.m. You need a mix so there's always people and its always lively."
The city is looking more favorably on Duball's proposal.
"The fact that it does have residences over retail does fit with our downtown plan," Mr. Greenberger said.
If the city's planning commission approves Duball's proposal, the joint venture said it would apply for construction permits, break ground in early 2008 and complete the work in 2012. The mayor and City Council already have approved the plan.
The Duball project would include 485 residential units, more than 45,000 square feet of retail and 1,250 parking spaces.
"We are very intrigued by the new Town Square," said company President Marc Dubick. "We think it has potential to be one of the real solid mixed-used destinations in the Washington metro area."

• Property Lines runs on Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail tramstack@washingtontimes.com.

You know what...I really dislike Rockville's mayor.

You know what...I really dislike Rockville's mayor.

I think I hate everyone associated with governing that town.

I think I hate everyone associated with governing that town.

Yeah! We have Condos that can't sell so now we're turning them into apartments, LETS PUT EVEN MORE! 30 years from now (20 if we're lucky) when the project is a dried up old prun, we'll have a smashing ghetto apartment complex just like the other side of the tracks, THEN WE CAN TEAR IT DOWN JUST LIKE WE DID THE OLD SHOPPING CENTER AND ROCKVILLE MALL. WON'T IT BE FUN TO DO IT FOR THE THIRD TIME? WE'RE SO SMART IN ROCKVILLE, MIXED USE, HEIGHT AND OFFICE BUILDINGS EQUAL BAD (even though our residents need jobs more than housing and we have several 200'ft+ buildings right next to the site)! YIPPY SKIPPY!:banana:



Town Square units switched to rentals
More than one-third of condos taken off the sales market
by Warren Parish | Staff Writer
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Days before the first residents move into Rockville’s Town Square development, the project developer has taken more than a third of the development’s housing units off of the slumping condominium market, shifting them to rental apartments.

Having endured a year-long market slowdown, RD Rockville LLC, the company invested in the residential side of the mixed-use development, has sold just 214 out of 644 units in Town Square, company officials confirmed last week.

‘‘When the condominium market was hot, everyone was saying this would sell out quickly,” Benjamin Harris Stonestreet, vice president of construction for RD Rockville, said about Town Square. ‘‘But there’s 644 condo units on this project. That’s a monumental undertaking.”

Until about a year ago, sales were clicking along, Stonestreet said. Throughout the summer of 2005, customers were buying condominiums at a brisk pace, basing their decisions on brochures they were picking up in a nearby sales trailer. Then winter hit and sales dropped. Company officials began banking on the post-holiday turnaround. Spring came and went and no such market shift occurred.

Now RD Rockville, like other condominium developers in the region, is offering incentives.

Company officials say they do not want to give away their business secrets, but confirmed that their sales representatives have given away free parking spaces that would have sold for $30,000 in a better market.

The condominium prices have not been lowered, company officials say.

No rental prices had been set for the 200-plus rental units as of late last week.

‘‘All the analysts and experts say we should be leasing 15 to 20 units a week,” Stonestreet said, before pausing to reflect. ‘‘I hope the experts are correct.”

Caught in a marketdownturn

The Town Square development, downtown Rockville’s most significant face-lift in decades, is not the only construction project to suffer from the slumping market.

In Montgomery County, condominium sales have declined from 2,050 in 2005 to 1,031 last year, according to William Rich, an expert in condominium markets with Delta Associates, a real estate research company in Alexandria, Va.

RD Rockville’s response to the slumping market is in step with what many in the industry have already done.

‘‘In this case, I believe the developer is going to have to take a longer-term play than anticipated,” Rich said. ‘‘He will have to possibly hold on to these units a couple years and then see if the conditions change.”

Last year, more than 13,000 condominium units throughout the Washington, D.C., metro area were taken off the market, according to Delta’s numbers.

In contrast, ‘‘the rental market is performing quite well,” Rich said.

Better in the long term?

City and company officials downplay the import of the decision to rent hundreds of Town Square units.

Markets fluctuate, they say, but the 12.5-acre, $352 million mixed-use development is too loaded with amenities to suffer the same fate of the last major redevelopment project in Town Center, the old Rockville Mall.

Referred to as the white elephant, the large federal urban-renewal project failed from the start, with its empty cornerstone buildings that stood glaringly vacant.

Mayor Larry Giammo has repeatedly said the project failed because it did not account for market demands and how people lived.

Giammo and the City Council have bet heavily that Town Square will be different, roughly doubling the city’s bonding debt to pay for their end of the project.

The Town Square project has already leased more than 40 retail and restaurant spaces, leaving just one retail space and a noticeably large site reserved for a grocery store to be filled, said Vikki Kayne, spokeswoman for Federal Realty and Investment Trust, the company leasing the retail side of the project.

‘‘The [retail] market’s very strong,” she said.

Just blocks away from the Rockville Metro station, Town Square features a plaza, the new Rockville Library and an Arts and Innovation building.

Considering those attractions, the long-term success of the project is assured, said Scott Ross, managing partner of RD Rockville.

‘‘These are some of the things that city planners dream about,” Ross said. ‘‘We’re creating a downtown, a heart of a city where there used to be a blacktop parking lot.”

Giammo downplayed RD Rockville’s shift to rental, saying it would not adversely impact the city.

‘‘I don’t see that as a setback,” he said. ‘‘Right now the ownership market is in the tank, but the retail is still strong.”

RD Rockville’s original plan called for only rental units, city officials say. At the request of the city, and encouraged by a rising market, the company eventually shifted the plan to 100 percent ownership.

Grand marketing for the grand opening

A slumping condominium market is not stopping the first few residents from moving in within the month. As city staff strategizes about how best to promote their new residents to the media, many ground-floor retail companies are busy fitting out their shops in expectation of opening before the May grand-opening celebration.

The new Rockville Library has already opened and is drawing about 300 cars to one of three city-built parking garages a day, Director of Community Planning Arthur D. Chambers said Monday.

Scaffolding that once dominated the scenery is going down and the extended Maryland Avenue from Middle Lane to Beall Avenue is open.

All of the activity is evidence of a successful project coming on line, said Giammo, who may, as a press event, lend a hand helping the first residential occupants move into their unit.

The city is hoping to get an appearance from the governor and other VIPs at the grand opening sometime in May.

‘‘You can’t go anywhere else in the Baltimore⁄Washington area and see something that looks like this going up — another city within a city,” Stonestreet said.