Planners endorse Walmart, green office building at ends of Georgia Avenue corridor

By Sonny Goldreich

A pair of major real estate projects at either ends of Silver Spring’s Georgia Avenue corridor—an expansion of United Therapeutic’s downtown headquarters and a Walmart in Aspen Hill—gained momentum from Montgomery County planners this week.

Roughly the same size, they reflect dramatically different development visions. The first was conceived as a vertical high-tech temple to environmentally sensitive design, while the latter promises a horizontal low-price Mecca for lowest common denominator suburban sprawl.

Glass and steel don’t usually exude much warmth, but drug-maker UT’s new 121,724-square-foot office building would generate enough on-site renewable energy to keep it off the power grid. The site plan for the 6-story “net zero” project—which would replace a 3-story public parking garage—has been hailed for its green design that relies on solar and geothermal power for the property, which sits less than half a mile from the Silver Spring Metro station. The Planning Department has recommended approval of the site plan and a July 17 hearing is scheduled for the building, which the Planning Board approved at the project plan stage last year.

montgomeryplanningboard.org/agenda/2014/documents/AspenHill_000.pdf

But the big news comes at the northern end of Silver Spring, where the Planning Board on Thursday (July 10) approved a public hearing draft of an Aspen Hill minor master plan amendment that supports the concept of building a 118,000-square-foot Walmart superstore at a vacant office building site. The board heard Planning Department staff presentation on the amendment and scheduled a public hearing for September 11.

The amendment—pushed by property owner Lee Development Group—would allow construction of the store on the site of the vacant BAE Systems/Vitro office building at 4115 Aspen Hill Road. The 1968 relic sits empty since the military contractor relocated to Rockville in 2010.

Planners agreed with Lee that there is no demand for office space on the 10-acre site, noting that currently “there is roughly 10 million square feet of vacant office space in Montgomery County, and nearly 70 million square feet of vacant space” in the DC metro region.

The planning draft added that the 242,000-square-foot BAE building “accounts for the vast majority of office inventory in Aspen Hill. Consequently, the loss of the building’s sole tenant in 2010 and the owner’s reported inability to release the space has had an outsized impact in Aspen Hill, where the vacancy rate has hovered at around 71 percent. The Vitro vacancy has pushed the vacancy rate in its wider Kensington-Wheaton office submarket to around 25 [percent].”

The empty building, which is west of Georgia Avenue at the intersection of Connecticut Avenue and Aspen Hill Road, is at least two miles from the nearest Metro subway station in Glenmont. But the property sits within easy walking distance of a proposed rapid bus transit station at Georgia and Connecticut, which would seem to support mixed-use retail and residential development.

Despite the location, a planning department market analysis concluded that “additional retail square footage could be supported in the trade area, whereas townhouses may be supported, but their feasibility is less certain at this time.”

So that leaves retail, in this case big box retail. Really big box retail, like the Walmart kind that the County Council failed to block in 2012 after much huffing and puffing to curb so-called category killer stores.

With plans to use 45 percent of the Walmart space for a grocery section, the project has generated intense opposition from the United Food and Commercial Workers union, which represents Giant grocery employees across Aspen Hill Road. Aside from the obvious traffic issues, some opponents also question Walmart’s impact on small specialty retailers (including some in Lee-owned Northgate Plaza across Connecticut Avenue from the BAE building).

The planning draft —which reads in places like it could have been written by a Lee lawyer—helpfully addresses those concerns.

The draft says that “New big-box stores or shopping plazas do not necessarily cause nearby stores to decline. For example, they may enhance the competitiveness of existing stores that sell similar or complementary products by increasing the overall number of customers drawn to the area.”

Regarding grocery stores, the draft notes that “an Aldi supermarket and a forthcoming Wegman’s are adjacent to a Wal-Mart in Germantown.”

And planning staff report that “Big box stores commonly co-locate with other large retailers,” often forming super centers. Within a few blocks, Aspen Hill already has many retailers found in such clusters, such as Kohl’s, Home Depot, Michael’s and Kmart.

All of that suggests that Walmart could co-exist with its retail neighbors rather than cannibalizing them. But Kmart might be the exception, which could result in Aspen Hill trading one big vacant space for another.

The planning draft notes that “While a direct competitor in the discount department store category, the existing Kmart is older, less visible from main streets, and does not sell groceries. Without improvements, K-Mart may experience increased competition and could potentially face significant economic pressures. If a vacancy results, it could be challenging to find a similar tenant.”

Overall, Aspen Hill does not lack for retail services. The planning draft cites “roughly 1.26 million square feet of retail space,” including the nearby strip center cluster at the intersection of Bel Pre and Layhill roads. “Of this amount, around 74,000 square feet (5.8 percent) was vacant as of the end of 2013.” The area is mostly stable, with most of its shopping malls built before 1970 and boasting occupancy rates of between 96 percent and 100 percent.

But one store closure can have a major impact, such as in Plaza del Mercado on Layhill Road, which planners say “accounts for nearly half of Aspen Hill’s vacant retail space,” since a Giant closed in 2011 and dumped 25,000 square feet on the market. The space has been filled recently by discount furniture stores on a month-to-month basis, while nearby residents appeal for a new grocery to move in.

No such questions exist for the United Therapeutic’s project in downtown Silver Spring, which has seen its total office space actually shrink in recent years as property owners tear down old commercial buildings and replace them with new apartment complexes.

montgomeryplanningboard.org Site Plan #820140110

The firm’s new building at 1000 Spring Street would replace a 152-space garage with 111,724 square feet of office and laboratory space, 10,000 square feet of street-level retail and equal parking space. The complex would expand by more than 50 percent UT’s neighboring headquarters campus, which already occupies more than 200,000 square feet after it doubled in size with an expansion completed in 2009

Unlike most of the typical glass boxes in the DC region, the building would add some architectural drama to the southwest corner of Colesville Road and Spring Street. The design looks a bit like a docked ocean liner, featuring an elliptical shape reaching 90 feet high and a prominent prow with mesh ventilation panels.

More dramatic, the building is a rare project that relies entirely on non-carbon power to provide heating, cooling and electricity. Most green-certified properties win brownie points for buying renewable solar or wind capacity on existing power grids that are fueled mostly by environmentally questionable coal, oil, gas, nuclear and hydroelectric power.