Rebecca Cooper Senior Staff Reporter - Washington Business Journal
LAS VEGAS — Walter Reed’s loss will be Wisconsin Avenue’s gain: Wegmans Food Markets Inc., the ultra-popular grocery store once part of a pitch for the Walter Reed campus, will open its first D.C. store at the soon-to-be-former Fannie Mae headquarters.
The Rochester-based company and the site's new owner announced the deal Sunday night as the International Council of Shopping Centers' annual Recon meeting kicked off here.
Wegmans will open an 80,000-square-foot store at the Fannie Mae building on Wisconsin… more
The grocer will anchor a mixed-use urban village developed by the property's new owners — D.C.-based Roadside Development LLC and North America Sekisui House LLC — at the 10-acre campus at 3900 Wisconsin Ave. NW in Tenleytown. Terms were not disclosed.
Wegmans will occupy part of Fannie Mae's Colonial-style brick building, taking on much of a new lower level Roadside will build beneath the existing structure, Roadside CEO Richard Lake told me. The store will have a street-level entrance on the back of the 1958 building facing a new street the developer will cut through the site.
At 80,000 square feet, the D.C. Wegmans will be much smaller than the chain’s typical suburban footprint, which usually runs about 150,000 square feet. Unlike the suburban stores, the D.C. Wegmans will not have dedicated parking but instead share more than 800 spaces planned for the Fannie Mae site.
Wegmans will operate a standalone restaurant above the store, as it does at some of its upstate New York locations. In Rochester, for example, Wegmans operates Amore by Wegmans, a separate eatery adjacent to the grocery store.
Wegmans has not decided on the D.C. restaurant's branding or theme yet, Lake said. The eatery will be about 6,000 square feet and have views into the store below through skylights.
Work will not begin on D.C.’s first Wegmans until Fannie Mae completes its move to its new headquarters at the former Washington Post site on 15th Street NW in late 2018. Roadside, which bought the Wisconsin Avenue site with its partner last November for $85 million, estimates Wegmans could open three years after the start of construction, so the earliest would be late 2021.
Roadside has been a longtime partner of Wegmans in the region. The grocer opened at the developer's Stonebridge at Potomac Town Center development in 2008 and is installing a smaller-format store in a Roadside project at the Capital One headquarters in Tysons, set to open in 2018.
Wegmans was also a major anchor of Roadside’s pitch to develop the Walter Reed campus in upper Northwest D.C. Roadside didn’t win the that bid, and Wegmans pursued talks with winning bidder Hines Interests LP about opening a store there. Those talks never materialized.
“As they continued that conversation, we continued to talk about other parts of the city, the metro area, and we talked about this more urban concept that could fit into more and more places,” Lake told me. “So they could be accommodated in other parts of the marketplace without having to deliver their full-size store.”
When Roadside decided to make a bid for the Fannie Mae property, Lake pitched the site to Wegmans.
“They were extremely interested immediately about how to make that happen,” he recalled.
The project will be a complicated one. Roadside will have to install temporary columns to support the existing building while it excavates beneath the structure to build out the Wegmans space.
“That allows us to slide them in without disturbing the historic context that’s important to the building and the city,” Lake said. He likened the development to Roadside’s O Street Market project, which included placing a new Giant grocery store behind the historic facade of the open-air O Street Market. Roadside is about to open the final phase of that mixed-use Shaw development.
At the new Wegmans, the wide grassy area in front of the Fannie Mae headquarters will remain and be available for community events and uses. Lake envisions screening movies or hosting art fairs and other special events there.
In all, the Fannie Mae project will involve building or rehabbing seven buildings, cutting several new streets through the site and adding more cultural and arts uses.
The project will include about 100,000 square feet of retail in addition to the Wegmans. Lake said Roadside is in talks with arts groups as potential tenants for the upper floors of the existing building as well a theater operator. A health club is also a potential use. Nothing has been finalized.
Wegmans, which is widely popular for its prepared foods, large organic selection and moderate prices, last year unseeded Trader Joe’s as “America’s favorite grocery store” and this year tied for first with Publix in the Market Force Information rankings.
D.C. Mayor Muriel Bowser, who has been very vocal about wanting to land a Wegmans, heralded the announcement as a “decisive win” for the District.
“The effort to attract Wegmans to the city demonstrates the important role strong public and private partnerships play in attracting companies that benefit all of the citizens of this city,” Bowser said in a statement.
That effort, which included Deputy Mayor for Planning and Economic Development Brian Kenner and the Washington, D.C., Economic Partnership, has been a long one. Kenner remembers first meeting with Wegmans’ team at ICSC in 2010 or 2011.
“You’ve only got a few of those kinds of retailers,” Kenner said, “and any jurisdiction will tell you those are coveted, because they can be a large anchor for a redevelopment site.”
The meetings with Wegmans continued over subsequent ICSC meetings and site visits, with Kenner and others continuing to make the case for the District’s demographics, foot traffic and car counts. The city is not offering any incentives to attract the retailer.
“The importance of Wegmans is that they are a large-scale retailer, they have a unique format, and they’re one that we’ve honestly been pursuing for at least six years,” Kenner said. “Wegmans is fairly selective in how they pick individual locations, so we knew that if they picked Washington, D.C., we’d be one of the rarified places that they actually picked to open stores.”