Pike District Discussed in National Magazine

Pike District Discussed in National Magazine

The Commercial Real Estate Development Association published an article “Retail Streetscape Redevelopment” that featured the Pike District in their spring magazine. (You can read the part about the White Flint area below.)

Landowners Come Together in Maryland

rendering of street view

Property owners in the White Flint sector of Montgomery County, Maryland’s Rockville Pike corridor have proposed turning part of “the Pike” — now a typical suburban commercial strip highway — into a walkable boulevard, and have created a special revenue district to help fund the transformation.
White Flint Sector Plan, Montgomery County Planning Department

Two hundred miles to the south, Montgomery County, Maryland’s Rockville Pike is well-known in the National Capital Region for its miles of shopping centers and traffic congestion. The White Flint sector of “the Pike” is a 430-acre area along both sides of the corridor.

The owners of major retail outlets in the White Flint neighborhood started making plans for redevelopment more than a decade ago. What made this effort different from others was that several large, independent owners decided to work together and with the county to transform the streetscape. They proposed turning a key part of the Pike into a walkable boulevard and eliminating over 80 percent of their surface parking spaces. The Rockville Pike makeover is a jumbo-sized example of a retail streetscape renovation.

The renovated Pike — as envisaged by these property owners, the community and the county — will have a landscaped center median wide enough for two lanes of bus rapid transit (BRT). The renovation will put utilities underground and add hundreds of new trees. A majority of the owners, led by Federal Realty Investment Trust, The JBG Companies and Lerner Enterprises, voted to raise about $100 million for streetscape improvements in the public right-of-way using a special revenue district. The district framework will allocate increased property tax receipts to pay for the streetscape renovation. The developers will invest well over $1 billion more in public space and streetscape improvements on their own land, in mall renovations and in new commercial and residential construction.

Montgomery County’s plans for the sector provide for the separation of local traffic from regional traffic on the new Pike and for the expansion of the adjacent street network. All streets will be “complete streets” designed to be used safely by cyclists, pedestrians and transit riders as well as motorists. The plans envision a mixed-use neighborhood with public spaces.

While the plans also call for BRT, the county acknowledges that the funds for it are not yet in hand or even identified. The county says that while BRT on the Pike may be an early part of the project, the entire BRT project will take 20 to 30 years and will cost much more than the streetscape renovation.

Federal Realty Investment Trust has completed the first phase of its mall reconstruction, a walkable mixed-use development known as Pike & Rose, and is starting the next phase. JBG has multiple projects open or under construction. The county has received and approved many proposals for additional development in the sector plan area.

Part of the sector plan met a bump in the road when Lerner Enterprises, owner of White Flint Mall, lost a suit brought by a tenant over the closing of the mall for redevelopment. As of press time the case remains under appeal.

Evan Goldman, a vice president at Federal Realty, was the public face of the effort to win support for the special revenue district and streetscape renovation, which included a social media campaign. Most of the nearby neighborhood associations have become supportive of the project. Goldman’s advice to other owners and developers is “Don’t underestimate neighbors’ desires for really great communities.”

Streetscape renovations can turn a corridor into a “place” by improving land values, connecting sidewalks to storefronts and improving the value proposition for retailers. Retail streetscape redevelopment is also good for local governments. The new business activity creates revenues for the municipality from higher property tax, sales tax and income tax receipts, without new taxes or a general rate increase. Goldman estimates that Montgomery County will collect at least $6 billion in additional tax revenues in the next 35 years as a result of the Pike makeover.

Owners and developers elsewhere could use a similar approach to finance streetscape renovations in their own communities. Goldman notes that “If a few owners control much of the property in a neighborhood, and if they have a record of working together, the chances are better that they could pull off a project on the scale of the Rockville Pike makeover.” It helped that the Rockville Pike developers were well-capitalized, had some major leases expiring in properties that were showing their age and had a commitment to the region, but these factors are not all required. A clear lesson from the Hackensack and Rockville Pike stories is that the streetscape redevelopment model, combined with innovative financing, offers commercial property owners and developers an excellent opportunity for leadership — and for increasing the value of their own properties.

Amy Ginsburg

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