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Rappaport has potential tenants to replace Wal-Mart at Skyland

Monday, June 6, 2016

Washington Business Journal by Michael Neibauer


Gary Rappaport returned from the International Council of Shopping Centersconference in Las Vegas with possibilities, and in the wake of Wal-Mart backing of the Skyland Town Center project, that’s a good start.

“I’m coming back from Las Vegas with reconfirmation that we’re going to get this done,” the CEO of the Rappaport Cos. said.

Rappaport is developing Skyland with WC Smith, among other partners. The phased project — located at the confluence of Good Hope Road, Naylor Road and Alabama Avenue SE — is approved for 468 apartments, 325,000 square feet of retail, and a town square. But it was dealt a serious blow in January when Wal-Mart pulled out as the anchor retailer.

Previously, and on numerous occasions, Rappaport said the project could not happen without Wal-Mart in tow. But times have changed, he said, and he expects Skyland might even be better without the world's largest retailer.

Rappaport said the team has “different potential tenants that will be able to backfill” the Wal-Mart space, though he declined to release any names. Deputy Mayor for Planning and Economic Development Brian Kenner said he, too, left Las Vegas “encouraged on Skyland,” as the city is “very actively trying to encourage people to come to the site,” and finding interest.

Replacing Wal-Mart will take time. Once Rappaport finds new tenants, Skyland’s Block 1, formerly the Wal-Mart building, will have to be entirely redesigned to fit them. Letters of intent must be signed. Leases must be negotiated. And the Zoning Commission will have to reconsider the planned-unit development application.

Rappaport has worked on the Skyland project for 15 years, though it was seriously delayed as the District fought through eminent domain-related court action. Not until November 2015 did the development team close on the 18.5-acre site, for which it paid D.C. $700,000. The District, a major financial partner in Skyland, has committed $7 million to ready the site for vertical construction, and approved $40 million in tax-increment financing.

Skyland will advance, possibly sooner than later. As first reported by Bisnow, the development team expects to restart horizontal development of the three remaining blocks as soon as the fall, with vertical construction of one building — 267 units over 80,000 square feet of retail — kicking off next spring. The retail anchor there will be CVS, which relocated in March from Skyland to nearby trailers despite the uncertainty surrounding the project.

“We are going to get this built,” Rappaport said. “We are going to get this restarted.”

http://www.bizjournals.com/washington/breaking_ground/2016/06/rappaport-has-potential-tenants-to-replace-wal.html