Housing and Home Ownership
Who'd Want to Live There?
By Dana Hedgpeth, Washington Post
Jul 24, 2006, 08:15
Developer Jim Abdo eased his silver Range Rover down a potholed alley on the eastern edge of the District, pulling to a stop a few feet away from a junkyard dog.
The German shepherd slept on the other side of a chain-link fence, under a piece of tin. Crushed cars and stacks of tires surrounded the dog. Beyond that: auto repair shops, a strip joint and a nightclub where police last year arrested the owner in connection with a 220-pound cocaine bust.
"I've just found the greatest freaking site," Abdo said in his rapid-fire fashion. He lowered both windows. The smell of fuel and oil wafted in. He pointed to a banged-up red Ford. "That's where the center part of the private green space will be. It can feel like a sanctuary!"
This is the vista that has persuaded Abdo to sink more than $4 million into designs, plans and security deposits to turn 16 industrial acres along New York Avenue and Bladensburg Road NE -- a decrepit stretch that most people barely notice on their way to and from the city -- into 3.5 million square feet of development at a cost that Abdo estimates at $1.1 billion.
The site is east of downtown, near the Prince George's County line, and is bordered by New York and Montana avenues and Bladensburg Road NE. The project would include an estimated 3,000 condominiums, some with sweeping views of the Washington Monument, and about 140,000 square feet of retail space. Abdo envisions making it a gateway to the city, adorned with stores like Whole Foods and Crate & Barrel, topped off by condos and a health club, with bike paths to the nearby U.S. National Arboretum.
It's one of the largest privately financed condominium projects in years in the District, and it comes as the in-town condo market has cooled off. Units take longer to sell, and in some neighborhoods prices are flat.
Abdo agreed that his vision for New York Avenue sounds risky. The site is a mile from the nearest Metro stop and different from what he's done in the past decade: renovate historic buildings -- mostly in the Logan Circle and Dupont Circle areas and one on Capitol Hill -- and turn them into stylish condos and lofts.
"I know everybody's dying to ask, 'Jim, are you crazy? Who's going to want to live at New York Avenue and Bladensburg Road?' " he said to a group of builders and brokers at a recent breakfast.
Abdo and his New York partner still need to raise the money to build, and the sale of the land that has five different owners is contingent on a major zoning change this fall. If everything goes well, he hopes to start demolition of what's there by next spring.
Abdo has two other big projects: a $40 million renovation of a historic convent into luxury lofts northeast of Union Station and a $66 million project across the river in Arlington. He is also negotiating to build as many as 600 condominiums above parking garages near the new baseball stadium in Southeast.
Abdo's competitors in an increasingly skittish industry, city planners and Mayor Anthony A. Williams -- a close friend -- are paying more attention than ever to the 46-year-old developer, who arrived in Washington from South Carolina 14 years ago.
"When you're on the StairMaster, you're looking out at a three-acre park," Abdo said, walking past the junkyards one day, talking about his plans. "We toyed with the idea of tennis courts. . . . Too much land area. What am I doing? I'm taking the country-club developers' environment and taking it to the urban location.
"It works all day long," he said. "Who's ever thought of that? No one. Why? Because who has the critical mass? It's not a golf course. It's better than a golf course. Buy a condo and you're in."
Abdo got the idea after he met three brothers -- Jerry, Andrew and Dave Schaeffer -- who run a taxicab company their father started more than 50 years ago and have acquired land throughout the city.
The brothers tried to sell Abdo some land on Capitol Hill, but Abdo wasn't interested. Abdo recalled asking: "What else do you guys have?"
They had quite a bit: 11 contiguous acres near New York and Bladensburg, one of the busiest intersections in the city, where tenants include auto-repair garages, a used-tire salesman, a towing company, a gas station and the Skylark strip club, which operates in a former Roy Rogers restaurant.
There was only one problem. The brothers were already talking to a group that wanted to build a place for slot machines. Abdo, figuring that slots would never be approved in the District, told the brothers that he would be back the day after the tentative deal expired.
And he was.
"I want to make a big statement . . . something that's going to be remembered for a long time," Andrew Schaeffer, 58, remembered Abdo telling him.
Within two weeks, Abdo essentially met the brothers' price, according to Abdo and the Schaeffers. Neither side will say how much Abdo is paying because the deal has not closed. Some brokers and developers estimate the 11 acres to be worth as much as $60 million.
Once Abdo had persuaded some other landowners around the Schaeffers to sell, he approached Broadway Management, a New York firm that for two decades has developed condos in Manhattan and has three projects in progress in the District.
"It didn't take us long to decide this was something we wanted to be involved with, based on Jim's capabilities and the opportunity to redevelop part of the city that's in need of it," said David Weldler, a Broadway Management principal. "He understands the D.C. market quite well. He's a visionary." Neither Weldler nor Abdo will say how much money they are putting into the project.
Abdo said he knew the project would work when he saw the bumper-to-bumper traffic. City officials say more than 60,000 cars pass through the New York Avenue and Bladensburg Road intersection each day.
"They're like minnows swimming upstream," he said, showing slides of his planned development. "This is my net. This is my big old net."
Still, there are plenty of skeptics who point out that there is little in the area to attract buyers.
"I'm sure he believes in what he's doing and I'm rooting for him," said Washington developer Monty Hoffman, chief executive of P.N. Hoffman. "There's not a market there. He'll have to create one."
If Abdo has any doubts about the housing slowdown, they are not evident as he tours the high-end Arlington lofts that will be finished later this year. It's the first time Abdo has built outside the city and one of the few times he's built from scratch.
Abdo -- with closely-cut brown hair flecked with gray -- put on a hard hat, climbed several flights of temporary stairs and looked down on the city around him.
"Look at these ceiling heights," he said, jumping up and down on the concrete floors of a unit with 18-foot ceilings. "I wanted to bring true honest-to-goodness lofts to a place where everyone else is doing vanilla."
To that end, he ordered new bricks made to look old with black iron spots. And he is also using old bricks, taken from a 130-year-old District building.
Will anyone pay $700,000 to $2 million?
"There's 87 units here. I only need 87 people to say, 'Jim you're crazy, but we love it.' '' Abdo said with a wry smile. "Right now I'm sleeping okay at night."
Back in the city, at Second and H streets NE, Abdo pulled up to the former convent, sections of which date to 1870. He plans to sell 44 luxury lofts by next spring. The chapel penthouse is expected to fetch more than $2 million.
"This is my baby," he said.
Abdo climbed several stories of stairs, walked through an open window and stood on metal scaffolding to show off the old brick structure. He paused, noticing something in the wall.
"Who the hell is driving a nail into the brick like that?" he radioed to one of his construction managers. "Tell them to do it in the mortar joints. They've chipped the brick. . . . Find out who's doing it and whack them on their hard hat."
Abdo has expanded his closely held private company from three people with $887,000 a year in sales to one that employs 55 and expects more than $200 million in sales by next year. He made millions of dollars around Logan Circle, seeing coffee shops in the place of crack houses two or three years before most anyone else did. That caught the mayor's attention.
Today, Abdo and Williams smoke cigars together on Abdo's patio. Abdo tried to get the mayor into fly-fishing, taking him shopping at Orvis with the mayor's security detail in tow. The mayor, who, Abdo says, has a thing for kitchen gadgets, once persuaded Abdo to buy a set of glass bowls at Williams Sonoma. Williams goes to Abdo's weekend farm at the foot of the Blue Ridge Mountains in Virginia where he rides an air-conditioned tractor, cutting grass.
Abdo and his wife, Mai, 3-year-old daughter Sophie and 21-month-old son Griffin live in a three-story brick house off Massachusetts Avenue NW that was once the home of the former ambassador from Ghana. It is assessed at $4.2 million. Vernon Jordan lives across the street. Torched bluestone lines the pool out back. A 1939 Steinway sits in the living room. The kitchen has a Viking stove, two Viking dishwashers and a double Viking refrigerator. Inside, Abdo lines up plastic containers of crab meat the way other people might stack yogurt.
"We're minimalists," Abdo said jokingly as he served grilled steaks, vegetables and peach pie with vanilla ice cream on a recent evening in his perfectly manicured back yard.
Jim Abdo seemingly picked a terrible time to come to Washington to develop real estate. In 1992, the District had just chalked up 443 killings, helping it maintain a reputation as the nation's murder capital. Two years earlier, Marion Barry had been caught on tape smoking crack.
But Abdo had a few things going for him, the first being a thirst for money. The third child of a Palestinian immigrant who worked as a tool designer and a mother who taught English and social studies before staying home to raise four children, Abdo grew up in Kent, Ohio. As a 7-year-old he saw the homeowners on his paper route as prospects for a variety of services. Snow "meant dollar signs to me," Abdo said.
Abdo put himself through the College of Wooster, studying sociology, and graduated in 1982. He followed a girlfriend to Hilton Head, S.C., where he opened a pizza parlor with a $10,000 loan that his father co-signed. For 3 1/2 months, he said, he slept on a cot in the back supply room, but in four years he had five restaurants.
By 1992, he was tiring of the restaurants, sold some of them and moved to Washington with $350,000 to start a new chapter in his life.
"I'm Jim Abdo, the little 7-year-old capitalist who has to make money," he said.
He began slowly, buying a rowhouse in Georgetown, helping a contractor restore it, and selling it. Next, he bought a trashed house in Dupont Circle and turned it into condos.
At the time, most developers wouldn't go east of 16th Street. To Abdo, the Victorian houses and rowhouses in and around Logan Circle, a gathering spot for prostitutes and drug dealers, seemed like a gold mine.
His strategy was to gut the houses, save historic elements. and put in high-ceilinged condos, apartments and lofts. He installed Sub-Zero refrigerators and Wolf stoves, bathroom fixtures from the Georgetown store Waterworks, and honed limestone from Italy. That lured buyers, which lured retailers, which lured more buyers.
Carol Felix, a Logan Circle resident and marketing consultant, said Abdo had a gift for explaining why his units were worth their high prices. "He's always telling you a joke, even if he's telling you he's charging you $100 more a square foot," Felix said.
Abdo moved to larger apartment buildings and commercial properties. When drug dealers kept crowding around a pay phone on P Street NW, a spot Abdo was fixing up for CVS and the Logan Hardware store, he called the phone's owners several times, asking them to remove it. When they wouldn't, he had his construction workers rip it out and toss it into a Dumpster -- quarters and all, Abdo recalled, as he munched on a Think Thin energy bar.
He showed another side, too. When Theo Turner, a man living in a nearby church basement, turned up asking for work, Abdo hired him to carry supplies and sweep up debris -- and kept him on for years. Abdo also leased a basement apartment to Turner at a reduced rent in one of his renovated buildings near 15th and P streets NW. Not long ago, Abdo visited Turner in a hospital, where he was being treated for a heart attack.
In 2002, Williams presided over the marriage of Abdo and Mai at the Meridian House in Kalorama. After that, Williams became a regular at their house. The mayor is godfather to Abdo's son.
"He calls me the chief," Williams said. "My wife calls me Hey You. It balances out."
Since the beginning of 2000, Abdo or his company have contributed $11,550 to District candidates, including $3,000 to Williams and $3,500 to four candidates in this year's race for mayor.
Abdo admits he drops the mayor's name, which some people find irritating. "It's because he's a friend," Abdo said. "I'm an outward, vocal person and if I see someone over the weekend I start rattling off. If that's interpreted as name-dropping, I'm sorry."
As Abdo pursues his New York Avenue plans, he says the quality of his projects and the uniqueness of his design will create a market, regardless of broader trends.
On April 6, he presented his plans to a seven-member Advisory Neighborhood Commission. About 40 residents came out, and Abdo had the opportunity to display attributes important for a developer -- charm and salesmanship.
"I'm from a working-class family," Abdo said. "That's the idea here. We're not trying to compete with Dupont Circle or Kalorama. These will be at least $150 a foot less than what they'd cost in Northwest."
From the front row, resident Debbie Smith let loose a harrumph, shaking her head at the notion that working-class people would pay upward of $199,000 for a studio and $690,000 for a three-bedroom condominium.
Someone else asked about rising property taxes. That prompted Abdo's new vice president -- Eric W. Price -- to jump up and address the crowd. They knew him from his previous job as deputy mayor for planning and economic development, which he held for five years. He played a major role in luring a baseball team to the District and jump-starting the redevelopment of the old convention center site. Now they listened as Price, 44, calmly walked through tax-break programs that could keep older residents on tight incomes in their homes, even as their property values rose.
"New York Avenue can become a place of Whole Foods, hair salons, boutiques and coffee shops," Abdo said. "We've done this before on 14th Street and at Logan Circle and we're doing it on H Street. We'll tackle the tough areas. We're not here to give you lip service. We're here to make it happen."
It made for a compelling pitch.
"I'm tired of fighting the same garbage," Joan E. Black, a neighborhood advisory commissioner, told the crowd. "We want to improve our standard of living."
Within 30 minutes, the advisory panel endorsed the plan by a 5 to 1 to 1 vote.
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