This story was corrected on May 23, 2013. An explanation follows.
Hundreds more apartments might be headed to the southeast part of Gaithersburg called Washingtonian North across the street from the massive Crown Farm community now under construction.
Camden Property Trust of McLean, Va., is making a pitch to city officials, hoping to get an annexation agreement changed that would allow the company to construct up to 400 apartments on a 27-acre parcel. The parcel once was the site of Manugistics Group’s headquarters, with more than 800,000 square feet of office space.
The deal went south in 2000 and the land has been vacant since then, often used by residents as a cut-through from the Shady Grove Village community to the Washingtonian Center. It was also once a driving range.
The land is zoned for mixed-use development, which fits with the proposed project, but the annexation agreement with the city, which supersedes zoning, required solely office use on the land.
The parcel has been owned by Boston Properties since 1998. Jake Stroman, senior project manager for Boston Properties, said the company has not been able to find an office user of the size slated for the property.
“There is a change in the way office space is being used locally. The suburban office space is dying. It is not where office users want to be. They want to be in mixed use properties,” Stroman said. “If the land was valued at zero, we still can’t make an office development work. That is just a fact right now.”
Under the proposal, a 320,000-square-foot office pad would remain available for a future user. However, about six acres of the property would be sold to Camden Properties for apartments renting in the $1,600-per-month range, according to Jay Johnson, director of new development for Camden.
Across Sam Eig Highway, some of the more than 2,000 housing units are already under construction at the 180-acre Crown Farm project.
Downtown Crown is expected to have 538 apartments. The project’s Neighborhood 5, however, has been designated for more high-rise multi-family units contingent on the construction of the Corridor Cities Transitway, a transit service from the Shady Grove Metro to Clarksburg, according to Gaithersburg City Planning and Code Administration Director John Schlichting.
A CCT station is expected to be in Neighborhood 5.
“One could say the office market in Gaithersburg is a bit challenged. Therefore, to continue vitality, this is an appropriate direction. We are looking carefully at the number of multiple (residential) units in the pipeline,” Schlichting said.
He added that the city’s office vacancy rate sits at 12.3 percent — better than the county average, but slightly worse than property inside the Beltway boasting a vacancy rate of less than 10 percent.
Just across the bridge from the Boston Properties site, Washingtonian Rio area offers more apartments, including The Crossings at Washingtonian Center, a complex of 600 units, and Oakwood Apartments, a high-rise of 136 units.
In an odd configuration of city boundaries, most of the north side of Washingtonian Boulevard is in the city, while what is between Washingtonian Boulevard and Fields Road, where the apartments are, is not part of the city.
The vacancy rate for apartments in Gaithersburg is about 3.2 percent, according to the latest survey done by the city in 2012.
In addition to the Camden apartments planned for the Boston Properties site, Lifetime Fitness has proposed building a 127,000-square-foot fitness complex on 8 acres of the site, complete with indoor and outdoor pools, salon and cafe. LA Fitness is slated to be constructed within the nearby Crown Farm property.
According to the schematic development plan, entrance to the Boston Properties site would be off Washingtonian Boulevard. A two-level garage would be just inside the property, along with the future office pad; Lifetime Fitness and its adjacent parking lot is designed to abut Sam Eig Highway. The apartment complex sits on almost six acres to the rear of the property, according to the plan.
Johnson said the amendment would reduce the amount of traffic generated from the site from the original annexation agreement by 40 percent. Schlichting said that because the original owner of the property, Ackerman & Company of Atlanta, made considerable roadway improvements, including the bridge over Sam Eig Highway to the Washingtonian Center, no more roadway improvements are required.
“The change is less intensive than what is approved,” Schlichting said.
Possible infrastructure requirements might include bike and pedestrian connections from the property to the adjacent Malcolm King Park and cleanups to nearby stream systems, Schlichting said.
Johnson said a target date for construction on the apartments is mid-summer 2015.
The annexation agreement is expected to be presented to the mayor and council June 17.
Correction: The original version of this story incorrectly stated the parties involved in the annexation agreement. The developer has an annexation agreement with the city of Gaithersburg, not with Montgomery County.