Wednesday, July 9, 2008

Olde Towne anchor site ready for construction

Developer says enterprise zone status jump-started process in declining market

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Construction of new office and retail space is poised to start on the former site of Chris’ Steakhouse in Olde Towne Gaithersburg, where enterprise zone status is beginning to make its mark.

The central business district received enterprise zone designation in May. City leaders hope that benefits, including relief from county impact fees, waived municipal transportation and education impact fees and other tax breaks, together with Olde Towne’s affordable housing exemption, will prove a powerful incentive package for landlords and developers.

‘‘The benefits motivated me to move forward...and I’m hopeful that it will encourage other developers to move forward as well,” said developer Chuck Blessing, the owner of Inter-Continental Real Estate of Potomac. ‘‘With all the negative news out there ... we might have held off in this economy; it’s tough to say.”

The steakhouse, an 84-year-old building located at 201 E. Diamond Ave., was demolished in February. Greg Ossont, the city’s Director of Planning and Code Enforcement, said building permits should be finalized in two weeks. Building should start as soon as permits are issued, Blessing said. City leaders hope the new construction on the Chris’ Steakhouse site and anticipated Archstone high-end housing and retail development three blocks away — new anchors to Olde Towne’s main intersection — will kick-start the area’s revitalization.

Blessing, who bought his property in 2001, said enterprise zone status should go a long way in encouraging other developers. He stands to benefit from tax breaks on site improvements, tax credits for new employees and county impact fee exemptions.

He has planned a four-story office building with elevator access, ground-floor retail and office space upstairs. Each office condominium will occupy one floor. Two non-legally binding signed letters of intent ‘‘with sizeable deposits” are in hand to buy two of the condominiums, he said. He plans to move the bilingual real estate business he owns in Potomac with wife Andrea Martinez-Conte, a native of Argentina, into a third condominium.

Blessing declined to disclose estimated construction costs for the 8,595-square-foot building.

The list price for the 2,160-square-foot office condominiums on the top three floors is $810,000, Blessing said. The 2,115-square-foot ground-floor retail space will be leased at $35 per square foot. He expects to lease the space to a franchise similar to a Starbucks Coffee, Chipotle Mexican Grill or McDonald’s restaurant. Another possibility is a bank, Blessing said.

‘‘The city wants it to be carryout restaurants,” said Blessing. ‘‘It used to be a restaurant, there’s a need in the community. ... With the uncertainty in the economy, we’re keeping all of our options open.” Sale of the building is possible, he said.

The project, one of the first Olde Towne revitalization efforts, received access to 56 parking spaces in the city-owned garage on Olde Towne Avenue.