Here’s when work will start, for real, at Walter Reed

Washington Business Journal by Rebecca Cooper

It’s finally getting real at the former Walter Reed Army Medical Center site in Northwest D.C., as the development team of Hines Interests LP, Urban Atlantic and Triden Development Group executed their ground lease with the District earlier this month.

Work on the infrastructure and the demolition of some of the buildings at the site is expected to begin in 2017. The lease was signed Nov. 10, according to a statement from Hines.

When complete, the District’s portion of Walter Reed will have 3.1 million square feet of retail, residential and commercial development on 66 acres. That includes 2,100 units of residential, including 432 affordable units; 230,000 to 250,000 square feet of retail, including a large grocery tenant; a 200-room Hyatt hotel and conference center; 185,000 square feet of office space; 30,000 square feet of arts and cultural uses and a 116,000 square-foot ambulatory care unit from Howard University Hospital.

The project will also keep 20 acres of open space at the property, which used to be home to the Walter Reed Army Medical Center until it moved to Bethesda in 2011. The District has been working on the redevelopment plans since then, reviewing proposals from several development teams and ultimately choosing the Hines-led team in 2013.

There were still several hurdles to clear, however, including the transfer of the 66 acres from the U.S. Army to the District, which occurred Oct. 26. The city agreed to pay $22.5 million for the site, $10 million at closing and $12.5 million one year later.

The ground lease was the next step and the one that allowed work to begin on The Parks at Walter Reed, as the project has been dubbed. The development team will pay the city $25 million in eight payments over seven years, with $10 million of that coming in the first two years.

One entity that will be located on the property, the Columbia International School, had already been granted access in order to begin work on the repositioning of Delano Hall into a school ready in time for the 2017 school year.

On another portion of the 110-acre Walter Reed campus, Children’s National Health System will build a new medical research facility at the site. The facility will utilize Building 54, a 348,000-square-foot laboratory that was formerly part of the medical center.

While some of the Parks at Walter Reed project will utilize existing buildings, a 2.6 million-square-foot hospital at the site will be demolished. The redevelopment will be spread out over 10 to 15 years.

Last we heard, Hines and its retail partner on the project, Weingarten Realty Trust (NYSE: WRI), are still seeking a grocery tenant to anchor the retail there, after discussions with Wegmans stalled through earlier this year.

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