How a Developer’s Move on Pennsylvania Ave. SE May Mean big Things for Corridor

Jair Lynch Real Estate Partners plans to acquire the Penn Branch Shopping Center at 3200 Pennsylvania Ave. SE.
Washington Business Journal
Oct 7, 2016

Jair Lynch has set his sights on reviving the long-struggling Penn Branch Shopping Center in Southeast D.C., a site some nearby residents view as an important cog in the revitalization of the larger Pennsylvania Avenue retail corridor connecting downtown with the District’s East of the River communities.

Jair Lynch Real Estate Partners closed Friday on its $9.25 million acquisition of 3200 Pennsylvania Ave. SE, an 88,823-square-foot retail center leased to a mix of retail, service providers and government agencies. The District-based developer doesn’t have specific plans for the property but believes it could serve as a catalyst for a larger revitalization of the surrounding communities of Penn Branch, Hillcrest and Randle Highlands.

“We think it’s great real estate in a pretty exciting part of town, and we think that we can bring some wind and some energy to that,” Lynch said. “The question is, how do we energize and become a heartbeat for that set of neighborhoods.”

Lynch cast the highest bid for the nearly 3.6-acre retail center in an online auction conducted in August, where the opening bid was set at $3.5 million.The property is assessed at about $14 million.

The center takes its name from its location at the corner of Branch and Pennsylvania avenues, and Lynch noted it has prime visibility for motorists passing from Prince George’s County into the District. He plans to spend the next few months meeting with the center’s tenants, nearby residents and other interested groups to come up with a master plan for the property.

Lynch, who has taken on successful projects in other parts of the city including the H Street corridor in Northeast, isn’t the first developer to set its sights on Penn Branch. The property was last owned by ICG Properties, which lost the center to foreclosure after spending eight years trying to come up with a viable redevelopment plan. Part of ICG’s struggles were due to timing, as it paid $24 million for the property in 2005 near the height of the market, the Washington Post reported in 2013 as the property was facing foreclosure.

At the same time, development that has taken hold in so many emerging neighborhoods west of the Anacostia River has struggled to catch on to its east. Among the failed efforts was one by organic grocer Yes! Organic Market, which opened a new store along the Pennsylvania Avenue SE in the Fairlawn neighborhood not far from Penn Branch, only to close a couple of years later.

District officials have launched various efforts over the years aimed at bringing economic development to Pennsylvania Avenue east of the Anacostia, but with little success. Lynch’s efforts will be closely watched by neighbors, including Hillcrest resident Linwood Robinson, who believes the community needs to embrace development and is encouraged by Lynch’s interest in the shopping center.

Robinson is the founding member of Pennsylvania Avenue Corridor East, or PACE, a coalition launched earlier this year to promote economic development along the corridor between Minnesota to Southern avenues. The group came together out of frustration at the lack of progress and investment there, Linwood said, and he hopes to enlist developers like Lynch to help bring better retail east of the river to Hillcrest, Penn Branch, and other parts of Ward 7.

“We’re really trying to bring outside developers to the area to see if they have an interest in redeveloping or enhancing commercial properties in the corridor,” Robinson said. “We see ourselves as a mechanism, or in some cases even starting that conversation. There has to be somebody who takes these issues by the horns and has everybody sitting around the table to solve them.”

Robinson, a planner for the town of Forest Heights in Prince George’s County, said an important factor will be getting buy-in from other Ward 7 residents. Some are resistant to what they perceive as the ill effects of development or gentrification, and Robinson said PACE can help educate residents and bring developers and community members together. The group isn’t just focused on development but also on attracting quality businesses to the neighborhood, and promoting home ownership.

“The ‘g’ word scares me as a professional planner because there are a lot of negatives associated with it, but the objective is to understand what it means and how it benefits your community,” Robinson said of gentrification. “The problems occur with a lack of understanding of what that word means and what it entails. A lot of that pushback is because there is not an understanding.”

Former Mayor Vincent Gray said he believes the developers will need to engage the community to come up with a new plan for Penn Branch, potentially going in the direction of a mixed-use center with residential as well as retail. The site, which used to be anchored by a Safeway grocery store, faces numerous challenges that must be addressed to come up with not just a viable plan but one that residents will support.

“Over the long haul, if somebody’s going to really do something substantive, you need to look at a major reconfiguration,” Gray said.

Gray, who defeated incumbent Councilwoman Yvette Alexander in the Democratic primary for the Ward 7 seat, said the discussion should be broader than just Penn Branch or the Pennsylvania Avenue corridor, to encompass issues facing all residents east of the Anacostia.

Daniel J. Sernovitz
Staff Reporter
Washington Business Journal

From the Washington Business Journal:
http://www.bizjournals.com/washington/news/2016/10/07/exclusive-how-a-developers-move-on-pennsylvania.html