Management & Labor

The Politics of a Hole in the Ground

At the intersection of Wilson and Highland streets, a few blocks from where I live in Arlington, Virginia, there is a big, gaping hole in the ground. It isn't much to look at, as you might expect. But it's a hole in the ground with a rich history. If you will indulge me in a few paragraphs of local nostalgia, I think I can use it to draw some lessons about the ways of growth, planning and survival these days in metropolitan America.
by | September 2001

At the intersection of Wilson and Highland streets, a few blocks from where I live in Arlington, Virginia, there is a big, gaping hole in the ground. It isn't much to look at, as you might expect. But it's a hole in the ground with a rich history. If you will indulge me in a few paragraphs of local nostalgia, I think I can use it to draw some lessons about the ways of growth, planning and survival these days in metropolitan America.

The big hole takes up a space that everybody in the community refers to simply as the Hartford site. It stands at one of the juiciest development locations in the entire Washington, D.C., metropolitan area, across from a busy Metro station and smack in the middle of a close-in suburban corridor that has been sprouting condos and office buildings up and down its length for much of the past decade. And yet for all of those years, the Hartford site has just sat there, undeveloped and unwanted. During part of that time, it has been used as a parking lot. At other times, it has just grown to weeds.

Residents of the neighborhood, especially older ones, have walked by the Hartford site for years and wondered what the problem was. Some of them remember the 1940s and '50s, when a dense concentration of stores, restaurants and movie theaters made the area around this site Arlington's commercial nerve center and meeting place. Those days are over, of course. But the neighborhood made a comeback in the 1990s, thanks largely to Metro. People began coming to local stores and restaurants. Street life returned. The Hartford site, perfectly placed in the center of the action, just slumbered on. What was it, people sometimes asked: some kind of tricky real estate ploy? Or a screw-up by the county government?

If you talk to developers and county planners, however, they will assure you there was no trick and no screw-up. The empty Hartford site merely reflected the vagaries of the local real estate market. Throughout the 1980s and '90s, big chunks of developable land were available at the far ends of Arlington's Metro corridor, in Ballston and Rosslyn. That was where the attention went. The Hartford site, attractive as it might seem to the naked eye, just didn't generate the demand.

This is hard to argue with. Developers build buildings to make money. If they don't see the payout, they will leave the property vacant until they can make the numbers work out. But if you look closely at the history of this piece of land, you can see something else at work as well: You can see the subtle effect of a whole series of government decisions--local, state and federal--that combined to shape the result.

It was government action, and the threat of government action, that turned the once-thriving Hartford site into a vacant lot in the first place. As late as the 1960s, the site was a viable crossroads for retail trade, with a Lerner department store, a Hahn shoe store, a Mexican restaurant and a dance studio all holding their own against the suburban onslaught.

Then Metro construction began, the streets and sidewalks surrounding the Hartford site turned into a dusty, boarded-up mess, and by the time subway service actually reached the area in 1979, all the major commercial tenants had departed. Metro was not a creation of the free market--it was a multibillion-dollar public works project designed and funded by three different levels of government. Had the policy makers chosen to run the transit line somewhere else rather than down Wilson Boulevard, the wholesale abandonment of the site wouldn't have happened--at least not in the way it did.

But the site continued functioning as a business center for several years. Vietnamese immigrants arrived in the area in the late 1970s and began making use of the storefronts that the old tenants had vacated. The Lerner store became a Vietnamese department store and cafe. The Hahn shoe store became a Vietnamese fabric shop.

Then, one day in 1984, without much warning or neighborhood discussion, the wreckers showed up. Every building on the Hartford site was demolished, and the ground was reduced to rubble.

This, too, was a decision generated, in a subtle kind of way, by government. In the early 1980s, the Arlington County Board had created a Task Force on Open Space and Historic Preservation. The consortium of real estate investors that had acquired the site began to fear, with good reason, that it would be declared historic and illegal to tear down. The investors felt sure there was more money to be made in a brand-new development than in a restoration. The market in office buildings was hot in suburban Washington in the early 1980s. So as one county economic development official puts it, "they launched a preemptive strike."

But before the site could attract a developer, the real estate market collapsed. Here, too, government was the culprit--in this case, the federal government. Through the early 1980s, federal tax law made it advantageous to build office buildings on speculation, wait for tenants to show up, and write off the losses that occurred while the property was vacant. The 1986 tax reform act changed that. All of a sudden, there was not only a glut of unused office space but a powerful incentive not to build anything new. Cleared of its historic buildings, the Hartford site just languished.

By the early 1990s, the whole episode had become something of a local embarrassment. The county's master plan did not call for big vacant lots next to Metro stations. So the local government had an idea. The county Department of Human Services needed a new headquarters. Why not build it on the Hartford site? Nobody else was doing anything with the property.

That plan was approved by the county Planning Commission, but it soon fell apart. Developing the site as a government building meant giving up forever the substantial property taxes it was supposed to generate. The county board voted against it. The Hartford site was paved and used as a parking lot. But the '90s rolled by, and nothing was built.

During this time, ownership of the Hartford land had changed hands several times. Each set of owners envisioned an office building with ground-floor retail, and one of them actually had a building designed and obtained site-plan approval from the county. But no prospective tenants showed up, and without tenants, it was impossible to secure financing. The days of speculative office projects were over.

The owners did have one weapon at their disposal. Anytime they chose, without even having to ask permission, they could put up a residential building. Zoning ordinances clearly permitted that. Nobody really wanted it--not the residents of the neighborhood or the nearby businesses or the county itself--everyone envisioned the Hartford site as a commercial property, and a centerpiece of community revival. "That was our worst nightmare," says county Development Director Wayne Rhodes. "Residential isn't what we wanted here. You know from Planning 101 that this is a commercial site."

Nevertheless, under Virginia's property-friendly legal system, there was very little the county could do. And in all likelihood, the condominium scenario would have played out had the area real estate boom not lasted into the new decade, longer than any of the experts really expected. By 2000, office space in Arlington was very difficult to find. The John Akridge Companies, the latest in a long string of Hartford property owners, finally decided that a nine-story, 200,000- square-foot office building was a good investment after all, even without tenants lined up to lease the space. Another company, the Holladay Corp., agreed to build a 70-unit condominium right behind it.

This time, the financing came through. The lender on the project was the Multi-Employer Property Trust, a $3 billion fund that draws its resources mostly from trade-union pension plans. In the end, it's the savings of plumbers, carpenters and electricians that largely made the project possible.

The climax of the story is that on a Thursday morning a few weeks ago, the developer and much of the county leadership gathered to celebrate what might have seemed at first glance a minor event: a Hartford groundbreaking after nearly 20 years of stagnation. "This has been a long time coming," said county board Chairman Jay Fisette, standing in the middle of the parking lot. Even the promotional brochures seemed to acknowledge the site's troubled history. "The Hartford," they proclaimed, "a project whose time has come." The president of Akridge touted the development in seductive New Urbanist language. At the Hartford, he said, young professionals would be able to "work, live and play in one central location."

No doubt this is more detail about one street corner in Arlington than you ever wanted to read. But it seems to me to suggest a point. Government still isn't very effective as an engine of deliberate urban renewal. It's easy for public officials to proclaim that an aging part of their community is going to be an entertainment district, or a cultural center or a loft neighborhood. Making it come true is frequently beyond the capabilities of even the best-trained public planners.

On the other hand, the market decisions that shape the future of a community often turn out to be consequences of steps that government has taken over decades, often with other purposes in mind. Government builds a transportation system, passes a tax-reform law, considers a preservation ordinance, does countless other small things, and a set of historic buildings turn into a vacant lot. And then 20 years later, back into a construction site.

Sure, the market is what matters. But it's not the only thing that matters. The government is at the center of the renewal business, whether it seems to be or not. That's useful to know.

Alan Ehrenhalt
Alan Ehrenhalt  |  Contributing Editor
aehrenhalt@governing.com  | 

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