Gonzaga College High School || 19 Eye Street NW Washington, D.C., 20001
Friday April 18th 2014

Wal-Mart in the City: Development at the Corner of New Jersey Avenue and H Street

Plans call for a Wal-Mart adjoined to a structure that will host smaller street-level restaurants and retailers below a 4-story apartment complex.

By Michael Ledecky ’12, Editor-in-chief

Large glass windows.  Underground parking spaces.  300-plus apartments.  Wal-Mart? 

Wal-Mart is ready to set up shop in Washington, D.C.  The world’s largest retailer plans to establish four stores in the District by 2013.

Perhaps the most interesting of these four projects will occur directly adjacent to Gonzaga.  Beginning in January 2012, local real estate developers JBG Rosenfeld Retail and the Bennett Group plan to transform the vacant gravel lot at the corner of New Jersey Avenue and H Street into a multi-purpose complex. 

The structure will contrast sharply with the sprawling, concrete monoliths associated with suburban Wal-Marts.  Rafael Muñiz, JBG Rosenfeld’s development manager for the project, says that his firm will focus on “maintaining an exterior design that complements and fits in the context of the surrounding buildings,” such as Gonzaga’s buildings.

The complex will include a 4-story Wal-Mart encased in large glass windows.  The store will consume about 80,000 square feet, about half the size of an average Wal-Mart.  Anchored to the Wal-Mart will be an adobe-colored mixed-use building that will host smaller businesses at street level.  Above these businesses will be 4 stories comprising 303 apartments.  The project, which JBG Rosenfeld Retail intends to complete by December 2013, represents Wal-Mart’s first foray into mixed-use development.

The project will also open up First Street NW.  Currently, the street dead-ends into the parking lot on which the complex will be constructed.  Since 1993, the Bennett Group has subleased the New Jersey Avenue and H Street lot to the U.S. Government Printing Office.  Gonzaga has had access to the lot for overflow parking during football games, open houses and events after 5 pm.

While the complex will consume the parking spaces between First Street and the tennis courts, the portion of the lot between First Street and New Jersey Avenue will remain untouched.  However, Fr. Planning anticipates that the second half of the lot will be developed in the near future.  “We are currently in the preliminary stages of looking for parking alternatives for five years down the road,” said Fr. Planning.

The new First and H Street corner promises to be a hub of activity.  A new streetcar line between Georgetown and the H Street Northeast Corridor will bring riders directly to the complex.  Currently under construction, the line is set to open in the summer of 2013.

The half of the Government Printing Office parking lot closest to Gonzaga will host the mixed-use development.

Despite his “mixed feelings” about Wal-Mart, McKenna Center director Tom Howarth welcomes Wal-Mart’s potential to create new jobs in D.C.  “Particularly for those in Washington right now, to get a job, it’s very difficult unless you have a college education in some technical skill,” said Mr. Howarth, noting that the D.C. unemployment rate for people without a college education is 5 percentage points higher than the unemployment rate for Washingtonians with a college education. 

Nevertheless, Mr. Howarth remains wary of Wal-Mart’s anti-union practices and reputation for substandard compensation.  One demand of D.C. anti-Wal-Mart protestors is a $12.50 hourly wage, which the D.C. Council has defined as the “living wage” for the District.  But Gonzaga religion teacher and Wal-Mart opponent Ms. Katherine Murphy does not think this demand is enough.  “A $12.50 per hour wage is not good enough for an adult,” said Ms. Murphy.  ”If you add that up for yourself, that’s barely above the poverty line. I think that we need to do better than that.”  Although Wal-Mart maintains that its wages remain competitive with other retailers, the chain has drawn criticism for its limited benefits packages.  Wal-Mart recently announced plans to cut some employee health care benefits.

As Wal-Mart attempts to establish itself in the District, city officials have attempted to evaluate Wal-Mart’s effect on other businesses.  Mr. Howarth recalled the predicament of small businesses in Norway, ME, a town of 4,600 near the New Hampshire border.  “In the middle of the town, there’s a strip of buildings–restaurants, hardware stores,” said Mr. Howarth.  “And when Wal-Mart came in, a lot of those stores found it hard to compete because Wal-Mart, given its size and volume, could undercut their prices.” Researchers have observed similar patterns in other small towns across the United States. 

But it is more difficult to track Wal-Mart’s impact on large cities.  Representatives from Wal-Mart have argued that densely-populated urban areas minimize Wal-Mart’s “impact radius” on competitors.  A number of economists believe that a process of “creative destruction” tends to attract new businesses to neighborhoods that host Wal-Marts. 

Since Wal-Mart announced plans in late 2010 to enter the D.C. market, the retailer has made a concerted philanthropic effort to raise its profile in the District.  In the past month, the Wal-Mart Foundation contributed $5 million toward the Smithsonian’s future African American History Museum and provided a $1 million grant to the Congressional Black Caucus Foundation.  After contributing $230,000 to the Capital Area Food Bank in December 2010, the Wal-Mart Foundation hosted an event at the McKenna Center and made a smaller donation to the Center.  Wal-Mart has already agreed to some specific demands and restrictions from the D.C. Council, and the retailer has promised to emphasize groceries over other items in its new stores to address a dearth of fresh produce in the District.

According to Mr. Muñiz, 277 of the 303 apartment units that will be installed on the First and H Street property will sell at a market rent between $1,500 and $3,000.  The rental rate of the final 26 will be capped between $1,300 and $1,700 to target 80 percent of area median income.

Mr. Howarth believes that this increase in high-rent housing may have a more profound effect on Gonzaga’s neighborhood than the addition of a Wal-Mart.  He sees the situation as a Tale of Two Wards: “There are some places in Ward 6 that are some of the wealthiest zip codes in the city. There are also places here that are some of the poorest zip codes in the city, all in one ward.”  The increasing gentrification of Gonzaga’s ward has not alleviated poverty in the area, says Mr. Howarth.  Rather, it has simply exported D.C. poverty to the surrounding suburbs as increasing property values and costs of living have forced tenants out. 

Despite the many questions surrounding the new development, one thing remains clear.

“This community is changing,” said Mr. Howarth.  ”It’s changing as we speak.”

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