Friday, June 29, 2007

Story in the Washington Business Journal

(quotes Elise Bernard, webmaster of this very blog).

Future of Florida Avenue Market is up for grabs

Washington Business Journal - June 29, 2007

Joanne S. Lawton
Taking stock: Jenny Kim, part owner of MS Food Service, and company spokesman Michael Cha fear revitalization will put them out of business (see sidebar).
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Residents, customers and merchants of the bustling Florida Avenue Market in Northeast D.C. have long endured its gritty warehouses, barred windows and the missing letters on the sign bearing the name Union Market, its original label from the 1930s, when the city used the site for hundreds of retailers displaced by new government buildings.

The market's shabbiness has lingered undisturbed for years, stymied by the daunting task of bringing together the 24-acre market's 69 landowners, many of them immigrants, to decide on the best use of the property.

Now, two opposing factions are sparring over competing plans that will determine the future of the historic market.

New Town Development LLC of D.C., an entity of landlord-turned-developer Sang Oh Choi, won development rights to some parcels of the market from the D.C. Council and wants to create a dense residential neighborhood with more than 400 small ethnic and specialty shops, a la New York City's SoHo or TriBeCa.

But the market's existing businesses, landowners and stakeholders, galvanized by what they perceive as a threat to their livelihood, have created their own version of the market's future, with help from Mayor Adrian Fenty's Office of Planning.

They would retain the existing uses, while adding residential and office use. They also want to make the roads pedestrian friendly and spruce up the gritty, dimly lit stores to be more welcoming to shoppers.

Florida Avenue Market, also known as Capitol City Market, opened in 1929 as a produce warehouse along Fourth and Fifth streets NE and Morse Street. Gradually, it spread to Florida Avenue NE on the south side, Penn Street NE to the north, Sixth Street NE to the east and the railway tracks to the west. The property includes Union Market, D.C. Farmers Market, wholesale operations and specialty stores.

Over the decades, the area became the major produce and food distribution center for the District's restaurants and corner grocers. But with D.C. transforming its old neighborhoods and gentrifying its inner-city streets, like the redevelopment of the area north of Massachusetts Avenue to its south, the market is ripe for change.

That's where Choi, the operator of Sam Wang Produce Inc. in the market, comes in. Choi, who has some political clout with former Councilman Vincent Orange through lobbyist John Ray, got the council to endorse his master plan for the market as the model in the "New Town at Capital City Market Revitalization Development and Public/Private Partnership Emergency Act," passed last December.

The law gives Choi until Sept. 10 to purchase more than 50 percent of the land. If he hits that target, the District government will aid in acquiring the rest of the property through available options, including eminent domain, negotiations, tax relief and subsidies to nonsubscribing landowners.

The heart of the difference between the sketches of Choi and the Office of Planning is whether transit-oriented, mixed-use development should be the template the District uses for all land parcels near Metro stations.

In this case, the New York Avenue Metro station, about a block away, is one of the reasons the council has pegged the current market as "an underutilized resource" that could be rebuilt to create affordable housing, said Councilman Harry "Tommy" Thomas, D-Ward 5.

On the other hand, the Office of Planning sees the market as an exception to the rule.

Dismantling it would have too huge an impact on area grocers and restaurants, which may be forced to bring in specialty foods from other cities. Further, putting residences next to warehouses that receive delivery trucks at all hours makes little sense, said Harriet Tregoning, the District's planning director.

"The New Town development plan is what someone hopes for a large piece of property, most of which they don't own or control," Tregoning said. "A lot of developers have aspirations for many sites in the city. But having an aspiration doesn't mean that is the vision that is developed."

The conflict was not publicized last week when Thomas' office touted Choi's coup in signing New York-based Apollo Real Estate Advisors as the financial backer of the New Town project.

Thomas said New Town is working to win over merchants and owners, including Gallaudet University, which holds 3.9 acres in the market.

"We have heard the message from the stakeholders," said Jim Simmons, partner at Apollo Real Estate Advisors. "As is often the case when there is development, there sometimes is fear, misinformation and lack of communication. The process that has been put in place now will hopefully alleviate many of the concerns people have. This development is meant to be inclusive of the present owners, tenants and community."

Planning officials acknowledge their efforts may be in vain. Because the conceptual plan for the market is done, as a result of the law passed last year, the council has authority to use or ignore their work.

"We are waiting to figure where to go and who to give our conceptual plan to," said Jeff Davis, a Ward 6 neighborhood planner who is part of the study.


Fears of being driven out of 'New Town'

Jenny and Ho Kim are resigned to shutting down their wholesale and retail business in one of D.C.'s oldest markets, certain that a proposed mixed-use development threatens its existence.

The Kims, who bought half of the 20-year-old MS Food Service at 350 Morse St. NE in the Florida Avenue Market a year ago, have a busy store that generates $3 million in monthly revenue by supplying retail and restaurant clients with everything from noodles to soy sauce.

But the Kims are on a month-to-month lease, and their landlord could kick them out at any time, especially if he decides to join forces with Sang Oh Choi of Sang Oh Development LLC, who is leading a charge to redevelop 24 acres near the New York Avenue Metro station into a project Choi has dubbed New Town.

The landlord, Min Kang, wants to "make as much money as possible" in the market's development, said his property manager, Nick Deoudes of Bethesda-based Deoudes-Magafan Realty Inc. But the Kims could have more time than they may believe, Deoudes added, because zoning changes can take three to four years.

If the proposal proceeds as is -- and Choi gets half the landowners to agree to sell -- dozens of retailers and wholesalers who have operated businesses in the market for decades may have the option to move into the warehouse by buying retail condominiums. However, the real estate will most likely be much costlier than they pay now, and some fear there will not be enough space for many retailers to operate, including areas to load and unload trucks.

To make way for his plan, Choi would have to demolish the 28,000-square-foot warehouse where the Kims do business.

"If [Choi] develops the area, we have no place to go," Jenny Kim said. "There's no place like this where we can do business."

Businesses and landowners have formed the Florida Avenue Property Owners and Merchants Association to fight the evolving development.

The retailers "have been slow to fight this because they're immigrants," said Elise Bernard, an Advisory Neighborhood Commission member who spoke against the New Town plan at a D.C. Office of Planning meeting in April. "They come from places where it doesn't matter, where the government is going to do what it's going to do."

Giving them a voice is attorney Paul Pascal, who represents 70 landowners and retailers, including MS Food Service.

Although the association is against the New Town plan, if the project goes forward it should at least include improvements like cleaner buildings and more signs to gain greater visibility, Pascal said.

"Our goal is to see that the market is preserved," he said. "Everybody wants to keep the merchants intact. There is no other land in the region that can build a market like that."

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