Several changes made to requirements on development proposals in recent months have changed the proposals that could be presented to the Town of Herndon early next month as part of a joint downtown development project, according to town officials and developers.
In advance of the Dec. 5 deadline for development proposals from two competing firms vying for a partnership with the town for the right to commercial and public facility development, officials and administrators have pointed out that "the rules have changed" when it comes to downtown development. The result might be in a shift in how Herndon’s downtown district would look for decades following a proposed development project under a state public-private development partnership designed to allow for certain exclusive commercial development rights in exchange for the construction of public facilities.
"Not all of what the town had wanted to assemble was able to be assembled … and it has changed the way that we have had to look at the development process," said Herndon Town Manager Steve Owen.
Developers have had to adapt to a different set of circumstances surrounding any potential development plans due to a changing real estate market, a "new vision" for downtown development presented by Herndon’s new Town Council and, most notably, the loss of a property over the summer that was originally to have been purchased by the town for use in the project, Owen said.
If two local developers are still interested in the project, they will present proposals for how they would assume a comprehensive development partnership by Dec. 5.
THE LOSS of the "Ashwell Property" last summer, which currently houses a Subaru dealership at the corner of Elden and Grace streets in downtown Herndon, caused the largest alterations to the project.
The town had initially been set to purchase the land from its owner before negotiations fell through over the summer. While Owen described the final arrangement as "mutual," it has nevertheless changed the way the two developers have approached the project.
"I would say that [proposal development] is certainly more challenging now that the land that the town was going to purchase did not work out," said Michael Scott, managing member of Herndon Station, LLC, one of the firms that had proposed plans for downtown development.
When the Town Council made requests that would limit the density of certain developments, in essence lowering the profitability of proposed commercial developments, paired with a slow-down in the real estate market, the parameters of the project quickly changed, according to town officials and developers.
"When you take half of the project and remove it from the equation and take the other half and cut the density significantly, it affects the economics of a development project," said Brad Conver, development manager for Bethesda-based Clark Ventures who had made proposals for a downtown development partnership.
As the development proposal is a public-private partnership, town officials would grant land and zoning entitlements to developers in exchange for the development of public facilities, in this case, a parking garage and a community arts center.
AS DOWNTOWN DEVELOPMENT will now be on a smaller scale as the town has less property to offer, a lesser amount of infrastructural improvements will be included in any partnership with developers, according to Town council member Dave Kirby. One of the reductions in public facility expectations could be in a smaller arts center, he added.
But a toned-down nature of a downtown development project is more in line with what the council is looking for, Kirby said.
"It won’t be as grandiose for everything, whether that be in an arts center or in commercial property," he said. "I think right now what we need to do is to look at the current economics … and see what developers are willing to pay for," in terms of public facilities.
"We didn’t want to build a big wall [of condominiums] behind those houses on Grace Street, so I think we reduced the density to just that area to make sure that they still get the sunlight coming through there."
One of the compromises that might be made would be in a reduction of a proposed 30,000-square-foot arts center to a possible 12,000-square-foot community theater, Kirby added.
While the changes have affected some of the expectations of what the town will receive from the partnership, Kirby said that he is committed towards seeing the creation of a subtle, yet utilizable parking garage.
"Parking is my favorite pet peeve as far as downtown, not only for the new stuff that may be developed but for the existing businesses that are developed today," he said. "I think that if we were able to improve on the parking that it will be an attractive piece so that other customers and other businesses will come to town."
THE QUESTION HAS now become how developers would still make a profit commercially so that they would be inclined to invest in Herndon’s public infrastructure.
"Certainly if the economics pencil out and it looks like it would be beneficial for our developers to get involved [a public-private partnership with the Town of Herndon] will be something we would consider," said Scott.
Finding a balance between profitability and community development projects will ultimately determine how any future downtown development project will turn out, Convers said.
"I’ve always remained very interested in Herndon, I grew up near there so I will really want to do something that will enhance the downtown area," he added. "Nevertheless, the town realizes now that when you take a lot of the development away, it can significantly put a project in jeopardy."
Both Kirby and Owen said that the town remains committed to seeing the development of Herndon’s downtown.
"We have a small downtown for our population and because of that, the town wants to see it enhanced," Owen said. "In this location in Herndon next to Dulles Airport in the Dulles Corridor, I find it hard to believe that there is no interest in downtown development.
"It’s just in hammering out the new requirements and working those out with a developer in a project that is beneficial both for them and to the community."