Sledgehammers Halt Debate Over Downtown Landmark
by Maryann Hacgerty,
Washington Post Staff Writer

Developer Douglas Jemal, spurning the District's often contentious and lengthy rezoning process, has begun gutting the old downtown Woodward & Lothrop department store he bought this spring from the Washington. Opera for $28.5 million.

After conflicts with housing advocates, he said, he plans to proceed with a renovation that has no residential space, and follows the existing zoning rules for the building.

But his most vocal opponent isn't buying it. "As far as I'm concerned, this is all a big bluff," said Charles Docter, a lawyer who is chairman of Downtown Housing Now, a group of tenant and condo owner associations in the neighborhood.

Zoning is usually a legalistic process where multi-million-dollar questions are fought out at dull meetings. But in this case, that process has visibly affected what is happening at one of the city's most prominent buildings, a 500,000-square-foot structure that fills most of the block bounded by 10th, 11th, F and G streets, NW.

"You needed to get this project underway and going immediately. Time kills all deals. This property's not for free," Jemal said one recent afternoon as he sat in the makeshift office he has built next to the Woodie's loading dock. Inside, workers in hard hats hauled out store fixtures and gutted the spaces once filled by displays of men's accessories and women's cosmetics.

Because of its history, first as department store and then as site of a failed attempt to, build a downtown opera house, the Woodies building has unique zoning that permits only retail, entertainment, arts or arts-related uses. Its size and location have made it a focus of discussions about the future of downtown.

In May, Jemal moved to have the zoning changed to a mix of retail, office and housing that would have allowed about half the building to be used as offices. Downtown housing advocates, led by Docter, helped derail that proposal.

Jemal wanted to build four floors of housing atop the building, with offices on the middle floors and retail on the lower level. He also wanted quick approval so he could start work. Docter's group wanted more housing, and also wanted any decision delayed for months of further study. Jemal countered that without the ability to lease office space, he could not get financing for the project.

Some activists have brought about years-long delays in downtown projects, such as the renovation of the one-time Garfinckel's department store. Others have convinced developers to modify their proposals, as happened when housing units were added to a plan for a still-unbuilt multi-use complex at the Gallery Place Metro stop, next to the MCI Center.

The city's zoning commission has- delayed a decision on Woodies until at least September. That's too long for Jemal, who likes to position himself as a decisive entrepreneur, a hands-on guy in blue jeans instead of an MBA in a suit.

"You lost more than two months; you lost the entire summer," he said, "and that's not saying that in September you're getting what you want. That's uncertainty I can't go with."

He said, "I have no choice at this point but to go forward with the project with what I have." A few months ago he was rhapsodizing about the little urban residential oasis he wanted to build atop Woodies. Now, he says, "I'm not doing residential."

Instead, he hopes to lease out the ground, first and second floors for retail. Above that, he will construct office space for arts-related tenants. That conforms with current zoning, he contends.

It's legal if it's arts-related," he said.

The conflict over the building is not strictly a case of big developer vs community activists. One long-time activist, Terry Lynch of the Downtown Cluster of Congregations, applauds what Jemal is doing. That's mostly because Lynch has agitated for more retail in the neighborhood, and three floors of the Woodies building is a lot of retail.

"It's wonderful to see that building being moved on. It's great news he's moving forward with returning it to a retail shopping destination," he said.

In Lynch's view, what's going on now at the Woodies building is not the end of the story. "My hope is that it will eventually include some housing as well as dynamic arts and entertainment. It's great to see him moving forward.... It was allowed to sit there vacant by the opera, which was a travesty."

Jemal, who has numerous smaller speculative projects underway throughout downtown, said he does not have a timetable for the Woodie's renovation. "It's driven by the tenants," he said. "I can only go a certain limit and then wait for the tenants.... My basic building's standing here."

Without tenants, Docter said, Jemal isn't serious yet.

"He's basically blowing smoke. We all know he does not have a retailer, and he isn't even talking to anybody who is an arts user who would fill that building," he said.

Of Docter, Jemal said, "I have nothing good to say, so I'm not going to say anything at all."

The developer has proven that he's willing to complete a building before he has tenants. He has finished work on much of a block of town houses on 7th Street across from the MCI Center, and is holding the space vacant until he gets an offer from a retailer willing to meet his rents, which some brokers say privately are too high.

Jemal said he has not gotten financing for the construction work he has done so far at Woodies, instead paying for it out of pocket. He estimates that renovation of the building to a shell with no interior tenant work will cost him $25 million to $38 million.

Although he has no tenants lined up, he said he has had serious discussions with the Gap and has been in contact with other chains. Signing on such a high-profile retailer would make it easier to get other big names into the building, he said.

"I want to get synergy retailers the area can expand on. It all becomes contagious ... but you've got to get that first lead guy to step up."