National Harbor is The Peterson Cos.’ most ambitious projectDecember 01, 2007 8:37 PM
by Paula C. Squires
for Virginia Business
From his spot along the Potomac, it’s easy for William Polak to watch the progress of National Harbor. As the $2 billion waterfront development rises from the Maryland side of the river, Polak sees nothing but potential. “Hold your breath and hang on,” he tells visitors to his Potomac Riverboat Co. in Old Town Alexandria. “As it grows, it’s going to be like your own city. A private estate right on the Potomac.”
That’s exactly what a Virginia developer, The Peterson Cos., had in mind. The Fairfax-based real estate company wants to capitalize on the Potomac as the defining characteristic of a massive project that will reshape the Washington landscape. “We see ourselves as being a catalyst,” says Rocell Viniard, director of marketing for National Harbor. “The river for so many years has been a divider, dividing Maryland, Virginia and D.C. We want the river to be utilized to connect us all, so we’re developing this project that hopefully will draw the region together.”
Bringing people to the river isn’t a new idea. But building a 7.3-million-square-foot project replete with luxury condominiums, hotels, high-end retail, restaurants, offices, entertainment venues, two public marinas and 10,000 parking spaces is awfully ambitious, especially as the first phase unfolds during one of the worst slumps ever for residential housing.
Even so, construction on the first round of buildings is on schedule. National Harbor’s signature anchor, the sleek, 20-story Gaylord National Resort and Convention Center, is nearly complete. In fact, the 2,000-room hotel has already booked more than 1 million room nights over the next decade. “We are on schedule and on time with the opening,” says Amie Gorrell, Gaylord National’s public relations manager. “We have commitments to these convention groups that we will have a fully operational resort up and running when they arrive here.”
The Gaylord’s grand opening is set for April 25. A Westin hotel, a Hampton Inn and Suites and some restaurants, stores, two office buildings and the marinas will also open in the spring, says Viniard. With several inaugural events such as a yacht show and wine festival set for May, Alexandria officials are preparing for what they hope will be a surge in tourists.
Polak’s company already provides water taxi service between Alexandria and Georgetown, but he’s beefing up his fleet with two new 99-seat passenger boats. They will make runs every half hour, 14 hours a day, from National Harbor — just over the Woodrow Wilson Bridge — to Old Town. A round-trip ticket will cost $12. As Polak likes to point out, the 20-minute, one-way ride beats fighting traffic on the bridge during rush hour. “We think a lot of people will want to come and see the rich history that Alexandria has to offer or go to Mount Vernon or Georgetown,” he says.
Meanwhile, Alexandria officials are spending $750,000 to spruce up the city’s downtown and marina. The city also plans to purchase trolleys that will pick up passengers from the water taxi and ferry them around Old Town’s 17 city blocks.
The challenge for Alexandria, says Stephanie Brown, president and CEO of the city’s Convention and Visitor’s Association, is for Old Town to serve as a companion destination to National Harbor. “The balance we’re focusing on is the opportunity of having a new destination drawing visitors to the region and having a new destination that competes for the regional visitors that already come to Alexandria,” says Brown.
About 2 million people visit Alexandria annually. The city expects to get overflow bookings from the Gaylord National. With more than 470,000 square feet of convention, meeting and exhibit space, the new hotel — the fourth resort in the privately owned Gaylord chain — will be the largest non-gaming convention venue on the Eastern seaboard. In response, new hotels including a 319-room Westin have opened in Alexandria and upgrades are under way at existing properties
If National Harbor is fully built out over the next decade, it will offer five additional hotels (besides the Gaylord) for a total of more than 4,000 hotel rooms and as many as 2,500 residential units. It’s the largest project ever undertaken by The Peterson Cos., headed by Milton Peterson. He’s been involved in developing suburban shopping centers, subdivisions and office parks in the Washington area since the early 1970s.
National Harbor’s first residential building, a 242-unit condominium, One National Harbor, will deliver in August, and a smaller, 21-unit condo building should be ready by the fall, according to Stuart Prince, residential development director for National Harbor. By March 2009, the 163-unit Fleet Street Condominiums should be ready. “All three buildings are under construction, all have financing and are moving forward on schedule,” says Prince.
What makes National Harbor distinctive is a waterfront location, proximity to the nation’s capital (8 miles away) and access via the water and ramps off Interstates 95/495 on the Woodrow Wilson Bridge. Those factors have helped boost residential sales in a down market, says Prince. Sales at One National Harbor began in July, and the units sold out in about two months. Prices started in the low $300,000s for a one-bedroom unit and went to more than $1 million for larger condos with the best water views. Sales at Fleet Street started in October. Prince declined to provide sales information about these units, which are similarly priced.
“Right now there’s a far greater supply of condos in the Washington area than the market can absorb, but we’re selling waterfront property with direct access to the Beltway, which makes it a little different,” says Prince.
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