The owners of Penn Branch Center have agreed to terms with D.C. on a lease extension that will keep a D.C. Department of Motor Vehicles office in the shopping plaza for the next 10 years and provide the revenue needed for the owners to begin a more than $5 million rehab of the property.
David Stern, principal of developer ICG Properties, said the city had agreed to a 10-year, 30,000-square-foot lease for the center’s office space. It’s fully done. It’s just out for signatures right now, Stern said.
Both Stern and city officials declined to release the cost of the lease until it was finalized.
Despite a narrow parking lot, dated signage and a broken escalator, Penn Branch sees close to 50,000 cars pass by its spot daily at the intersection of Pennsylvania Avenue and Branch Avenue SE. Stern said the lease is directly tied to a number of improvements we’re going to be making at the center. Among the planned phase 1 changes scheduled to start this summer are facade improvements, creation of a glass elevator core to replace the escalator and construction of two standalone retail pavilions along Pennsylvania Avenue.
City Administrator spokesman Neil Albert and D.C. Department of Real Estate Services Director Robin-Eve Jasper declined to discuss the lease until it was transmitted for approval to the D.C. Council, which could happen this week. Three of the Council’s 13 members live in Ward 7, where the center is located. Councilwoman Yvette Alexander, D-Ward 7, lives two blocks from the center.
Another neighbor, councilman Kwame Brown, D-At large and chair of the economic development committee, has been pushing for the lease extension so possible tenants, like restaurant operators, can began considering opening in Penn Branch. One of the new retail pavilions will be just under 1,000 square feet, which would fit a coffee shop nicely, while the other will be just under 2,000 square feet, which could fit a small restaurant. It will be the first sit-down restaurant on that side of Ward 7, Brown said.
Two of the biggest retailers on the site currently are Wachovia Corp., which signed a seven-year lease in 2007, and a CVS Caremark Corp. pharmacy. Stern said that although the demographics of the area are fantastic and the traffic counts are fantastic, bringing in a sit-down restaurant will still be difficult. ICG has hired D.C. broker Tom Papadopoulos to fill remaining spots. Yes Organic Market had been considered a possibility, but the chain’s owner, Gary Cha, said he did not plan on opening a new store there.
Unlike many developers at the moment, Stern said he won’t be seeking subsidies from the city. We want to do a project that we are in control of and that we control the timing of, he said.