The Washington Post reports that the redevelopment of the Giant grocery store at Wisconsin Ave and Idaho Ave will finally be getting underway. Through the sick humors of the real estate gods, I live pretty close the this grocery store and can attest that it is an eyesore in bad need of a renovation:
It is one of the most belabored Washington development projects in recent memory, but on April 12 the Giant grocery store at 3336 Wisconsin Ave. NW will finally close, making way for construction of a $125 million housing-and-retail project that will feature a much bigger new store.
Giant began discussing plans to replace the out-of-date, 18,500-square-foot Giant almost a decade ago, but questions about what the company ought to build in its place grew to monstrous proportions in the Cleveland Park neighborhood. Eventually, the debate reached the point that some neighbors on opposing sides of the issue ceased speaking to one another.
Last week I attended one of the Urban Land Institute’s Real Estate 101 courses about this project and learned about this project from the land use attorney’s perspective. Phil Feola with Goulston & Storrs shared the story of the entitlement process for this project, going back to the first ANC meeting in 2005.
Part of the property that Giant wanted to develop as retail is zoned residential, so rather than attempting to amend the code, they sought approval of a Planned Unit Development. Typically a PUD is easier to achieve than blanket upzoning for a parcel because with a PUD both city planning and the project’s neighbors know what they will be getting with the redevelopment. The neighbors initially requested 32 changes to the PUD, and after making some adjustments, Giant’s proposal received near-unanimous support from both the Zoning Commission and the National Capital Development Commission.
When it looked as if Giant would receive permission to redevelop, neighbors who opposed the project sought to get the building landmarked. Mercifully, the Historic Preservation Office denied this request. When this failed, the neighbors returned with a lawsuit saying that the redevelopment would be in violation of what DC’s Comprehensive Plan calls for at this site — low-density housing and commercial uses. As Lydia DePillis reported in December:
Not that there was really any question that those proposing to turn the one-story, mid-century Giant Foods on Wisconsin at Idaho Avenue NW into a mixed-use development called Cathedral Commons were right on the merits, when the Zoning Commission unanimously voted to approve the project back in 2009. The question, rather, was whether Giant would persevere through the delays to actually build the thing—it wouldn’t be the only project to die after prolonged neighborhood intransigence.
This case is far from the typical PUD process and represents the worst-case scenario under zoning. However, I think it’s appalling that it took 10 years and untold legal costs for a property owner to earn permission to better serve its customers, not to mention the opportunity cost of having a terrible little grocery store for 10 years when a refurbished one could have been serving the neighborhood for much of this time. Feola said that he estimates the typical PUD approval process costs property owners around $500,000 and takes 3-4 years.
Imagine that this property wasn’t a grocery store owned by a multinational corporation, but rather an independent retailer or restaurant. A small business could simply never afford the transaction costs of this type of redevelopment. This case illustrates how the entitlement process contributes to the banality of our cities by setting redevelopment costs so high that small businesses often can’t compete. Increasing as-of-right permissions to build and redevelop would make the DC land market more dynamic and better allow entrepreneurs to meet consumers’ demands.
When an audience member asked Feola what he learned from this project, he quipped that he learned not to build on Wisconsin Avenue. While it’s true that the neighborhood is home to some passionate and well-resourced NIMBYs, it’s equally true that the DC entitlement process could be streamlined to shift the balance of power toward property owners, giving NIMBYs a little less control.