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Advocates Say That Streetcars Move People — And Spur Development

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Businesses on H Street are showing their excitement for the streetcar.
WAMU/Martin Austermuhle
Businesses on H Street are showing their excitement for the streetcar.

Over the past decade, H Street Northeast has become a D.C. destination.

There are new bars and restaurants, a full-service grocery store, music venues and a theater, and new housing. In late 2012, President Obama dined at Smith Commons; Forbes magazine has listed H Street at the country's sixth-best hipster neighborhood.

Anwar Saleem has witnessed the dramatic changes both as a lifelong resident and as the executive director of H Street Main Street, an organization that has promoted businesses along the strip.

"It went from a drug- and crime-ridden corridor, a dark corridor with no lights, [the] streetscape messed up, old façades, about 45 percent vacancy, and under-performing stores," he says.

"So you look at that in about 2002 and 2003 and you look at where we are now, it’s a tremendous difference. Now you have vibrant stores, you have façade improvements, new façades, you have new streetscapes, you have new lighting. It’s a total transformation from where we were back in 2002 versus now, 2014," he marvels.

The changes have occurred as residents and business owners await the arrival of a streetcar along H Street and Benning Road, the first in the city in over 50 years and the starting point of what city officials hope is 37 miles of streetcar routes crisscrossing the city over the next 30 years.

Longtime H Street residents say that the corridor's revival predated any hint that streetcars would ever run down the corridor again, but advocates — Saleem included — argue that even the prospect of trolley has pushed development into overdrive. To them, the streetcars aren't only about moving people, but also about spurring economic development.

Revitalizing H Street

New buildings line the northern side of H Street at Third Street. (Photo by Martin Austermuhle)

Plans for revitalizing H Street — which was a vibrant retail corridor prior to the 1968 riots — long predate the streetcar tracks that now line the 2.5-mile route extending down to Benning Road and Oklahoma Avenue NE. In 2002, the D.C. Office of Planning started laying the groundwork for the corridor's rebirth, making changes to zoning regulations and talking up the street to anyone who would listen.

One developer who did listen was Jim Abdo, who purchased a large property at H and Third Streets, close to Union Station. In 2008, he opened Senate Square, a 200-unit development stocked with luxury condos and apartments.

"It’s probably been about seven years ago that I went there and purchased an entire city block, Third and H Street. The total investment of that project was $325 million, and it was the first project of scale to take place on the H Street corridor," he says.

Abdo remembers that there wasn't much on H Street at the time, but the potential was clear to him: A history as a commercial destination, proximity to Capitol Hill and a stock of historic townhouses and retail storefronts laid a strong foundation for growth.

"There were a lot of visionaries that were willing to take a chance on the corridor well before the announcement of streetcar," he says.

Transit for Development

Public transit isn't only about moving people — it's also about spurring development. And in the grand scheme of all the options of transit available for H Street, D.C. officials opted for streetcars not because they move people quickly, but because they say that they're proven generators of economic activity.

"One of the attractions of streetcar as a transportation mode is that it’s cheaper than rail, and while it’s more expensive than bus, what the experience has been nationwide is that the clear visible permanence of rail tracks creates a level of confidence about commitment to development of a particular corridor, so it’s more apt to produce investment on the private sector side," says Ellen McCarthy, who headed the D.C. Office of Planning from 2004 and 2007 and recently took over the agency again.

Abdo, who is known for investing in up-and-coming neighborhoods early, largely agrees that the streetcar has changed the development dynamic on H Street.

"It will be truly the icing on the cake for an amazing corridor. And I think what we’ll see there is an acceleration of the success that you’re already seeing there today. Streetcar is truly a game-changer for retail corridors, no question about it," he says.

The numbers bear that out. In Portland, Oregon, city officials say streetcars spurred $3.5 billion in downtown development. In D.C., according to the CoStar Group, which researches real estate trends, there were 558,000 square feet of commercial space built or being built on H Street in 2013 alone. In the 20 years before that, only 18,000 square feet were built— total Last year, a new Giant supermarket opened. In 2016, a Whole Foods is set to arrive.

There are skeptics, though. Randal O'Toole, a scholar at the libertarian Cato Institute, has argued that streetcars are merely a fad, and that most of the development in cities that have them has come from government incentives to businesses and developers. D.C. has put $25 million into the corridor, the majority for small-business grants — though $5 million went to a development at H and Third Street that now houses the Giant supermarket.

Still, Saleem argues that most of the growth on the strip has come organically, and that the prospect of the streetcar has had a very real impact on accelerating the efforts that were already underway.

"I think that [it has] been tremendous, a tremendous catalyst in attracting businesses to H Street. If it wasn’t for the trolley, I don’t think we would have grown as fast as we have. The trolley was a tremendous catalyst in staking the promise of the corridor," he says.

Business owners have noticed. Scott Magnuson owns The Argonaut, a bar and restaurant that stands on the eastern-most end of H Street, where the streetcar transitions to Benning Road. He's worked there for nine years, and says that the growth has become much more evident since the streetcar tracks were laid as part of a streetscape improvement that wrapped up in 2011.

"In the last three or four years, it has changed dramatically. My wife and I own a house a couple blocks away, so we’ve been in the neighborhood for a long time, and there’s been a lot of turnover with all the new businesses. The sheer volume... I can’t even picture the change that has happened down here, it’s unbelievable to me even as someone who bought into this grand idea early on," he says.

Like many other owners up and down H Street, Magnuson has a "Friend of D.C. Streetcar" sticker on his restaurant's front door.

Can Benning Road Follow H Street?

Can the streetcar help Benning Road the way it did H Street? (Photo by Martin Austermuhle)

The grand idea of revival is clear on H Street, but less so on Benning Road. Part of that, says McCarthy, is how the street developed over time. "It's somewhat of a different in that the land uses along there weren't as pedestrian friendly as the uses on H Street, so there's less to build on in terms of bones," she says.

Part of Benning Road's development potential will come from a planned streetcar connection to Minnesota Avenue, as well as possible uses of the RFK Stadium parking lots that abut the corridor and a Pepco plant that is no longer used to generate electricity.

Saleem says that he wants H Street to help, because he sees the strip and its main offshoots — including Benning and Bladensburg Roads — as part of the same family.

"You have to look at the trolley running from H Street, which is a vibrant area, into a desert, which is Benning Road. I think that as a brother and sister, as a family, that’s why I look at this whole area as a family, we have to take some of those moneys and convert some of those moneys over to Benning Road and Bladensburg Road so that we can help them with their vibrancy as a family," he says, referring to some $20 million that H Street businesses have in the form of improvements grants.

The streetcar is expected to help, though. According to a 2012 report from the D.C. Office of Planning, the planned 37-miles of streetcar routes is expected to generate up to $8 billion of new development within a decade of completion. That will mean new jobs, new businesses and new housing on the corridors that have streetcars or those close to a streetcar line.

With More People Come More Dollars

At The Argonaut, Magnuson already does steady business. But with the streetcar set to roll later this year, he sees the connectivity promoted by the trolley translating into additional customers.

"It’s exciting. With this first line, it’s hard to know what to expect. From a business perspective, with our location, what I think it’s going to be huge for is bringing the people that have moved in to NoMa and the condos by Union Station on the other end of H Street to this side of H Street. I think that’s going to be a huge transportation mechanism for them to get back and forth," he says.

Until then, longtime watchers of the corridor still marvel at how it has changed over the years.

"I have to say, it was shocking to see how quickly H Street developed," says Tommy Wells, who represents Ward 6 on the D.C. Council. "During the deepest recession in history, H street added about 100 new business, almost 1,000 new jobs. It has created more economic vitality for our city."

Coming Tomorrow: With all the changes taking place on the H Street corridor, can people who lived through the bad times afford to stay through the good?

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