The giant Gaylord National Resort and Convention Center, at right, is the… (Courtesy of Peter Fellows/ )
On the day the Peterson Cos. began building National Harbor, the real estate market was booming and the future seemed bright. In a ceremony featuring a who’s who of Maryland leaders, then-Prince George’s County Executive Jack Johnson predicted a “paradigm shift in how the business community will view us.”
When the seven-year anniversary of that groundbreaking arrived last week, the economy had changed. And so had the project.
The developer, based in Fairfax, has put many of the project’s 423 condominiums and 46 town homes under contract twice: once before the housing collapse, only to see the deals fall apart, and again after. Retailers including Starbucks canceled plans to open there, but there are still more than two dozen places to eat. In May, the Peterson Cos. signed a joint agreement with Tanger Outlets to open about 80 discount stores, but last month learned that Disney had scrapped plans to open a 500-room resort hotel.
Walt Petrie, chairman of Petrie Ross, developer of Woodmore Towne Centre, said Peterson Cos. Chairman Milton V. Peterson has done everything he could to see the project through the rocky economy.
“He’s forging ahead as best he can, like everyone else out here if you’re trying to develop any kind of real estate,” Petrie said.
But for a project that was ambitious even in the boom years of the real estate market, there have been countless concessions and adjustments, and there will have to be more. Wayne K. Curry, who as county executive negotiated the terms of National Harbor’s original blueprint, said he agreed to the deal to “capture the tens of millions of visitors to Washington” and credited Peterson with sticking to that vision. Prince George’s County dedicated $160 million toward the project.
“National Harbor could still be an extraordinary commercial location, with its entertainment and hotels,” said Curry, now with the Michael Cos. “I think it still has that promise, but it’s changed quite a bit.”
Drawing crowds, and occasional traffic jams
National Harbor is a mini-city on the banks of the Potomac River, whose cornerstone is the giant Gaylord National Resort and Convention Center, the largest of six hotels.
Events such as a bass-fishing tournament and the current ICE! children’s attraction consistently draw tens of thousands of visitors, said J. Matthew Neitzey, executive director of the county conference and visitors bureau. ICE!, featuring characters from the DreamWorks movie “Madagascar,” is expected to draw 250,000 guests during its six-week run.
“To me it’s still accelerating, things are still happening. We don’t have Disney, but we have DreamWorks,” Neitzey said.
But despite the fact that the state spent $200 million building roads to the waterfront development, there are still concerns about access for major attractions. The Hot Chocolate 5K/15K run that National Harbor hosted Dec. 3 attracted 20,000 participants, but caused such large traffic jams that many runners could not reach the starting line in time, and start times had to be delayed. More than 1,100 people “liked” a Facebook page calling the event an “epic fail,” and race organizers e-mailed an apology to runners saying the parking company hired by National Harbor “was not even close to sufficient to handle the job, adding to the traffic issues as cars backed up on the highway waiting for access.”
On a WAMU-FM radio program last week, Rocell Viniard, director of marketing for the Peterson Cos., said, “This particular event, you know, did not meet our brand standards.”
Lack of other transit options likely has scared away some potential tenants. The Peterson Cos., for instance, has competed for federal leases against other sites with easy access to Metrorail,, but failed to land any deals. The Peterson Cos. also vied unsuccessfully to develop the headquarters for Northrop Grumman at National Harbor, something the company says “really put us on the radar for other large headquarter facilities.”
Housing and retail recover
When the first phase of National Harbor was completed, in 2008, it was in the midst of the country’s catastrophic housing collapse. Dozens of contracts the Peterson Cos. had with home buyers fell through. Today, 402 of 468 National Harbor’s residential units, or 80 percent, are sold. With the Washington apartment market booming, the Peterson Cos. inked a deal with the Bozzuto Group to build a 371-unit apartment building, the Esplanade, beginning next spring.
Retail leasing also experienced some bumps when Starbucks and some restaurants withdrew plans to expand into National Harbor. Last year, chef Timothy Dean, a contestant from the show “Top Chef: D.C.,” shelved plans to open a white-tablecloth restaurant and jazz lounge called Timothy Dean Bistro, which would have been the first black-owned restaurant at National Harbor. He sued the Peterson Cos. for undercutting his deal; the matter was settled out of court.