Cordish to raze Landover arena

Firm earlier sought to preserve, renovate US Airways facility

Commercial real estate

May 26, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Cordish Co. is preparing to demolish the US Airways Arena in Landover to make way for a $150 million retail and entertainment complex, reversing plans that originally called for preserving the 25-year-old building.

Cordish and arena owner Abe Pollin made the decision to raze the 19,000-seat venue because design schemes make the existing arena more of an obstacle than an amenity to the new 400,000-square-foot project that they intend to develop.

It is expected to cost more than $2 million to demolish the former Capital Centre, which opened in December 1973 as the home of the National Basketball Association's Washington Bullets, although formal estimates to raze the structure have yet to be developed, Cordish officials said.

"We've been struggling with ways to try and keep the building in place," said Allison Parker, a vice president of the Cordish Co., which is best known locally for reinvigorating the Inner Harbor's Power Plant with restaurants and retail space.

"What we're finding is that to put restrictions in place on potential tenants would be very difficult," she added.

"It would be too costly from a development standpoint to provide essential services like water to tenants that we want to attract to the project."

The Capital Centre project would have been among the first nationwide to use a former sports arena as part of a new retail development.

Throughout the country, as pressure to construct new sports stadiums becomes more intense, local governments have struggled to decide what do to with aging arenas.

At the same time, competition among retailers to develop new markets and boost sales is pushing them into urban areas and unlikely locales.

With the anticipated demise of the arena go plans for a 5,000-seat performance theater and a recreational area for skating, soccer, basketball and baseball batting practice, virtual rock climbing and amateur sports that had been planned.

Parker said sports facilities "still may be incorporated" into the project's design.

Cordish's original plans, unveiled 13 months ago, also envisioned tearing out half of the upper-tier seats but leaving most of the structure and seating intact, and providing a fresh look to the building by installing brick and metal panels on its exterior.

The project's anchor -- and only -- tenant thus far is a 16-screen, 4,000-seat multiplex theater that will be operated by Magic Johnson Theatres, a company formed four years ago by Loews Cineplex Entertainment and Johnson Development Corp., a company led by Los Angeles Lakers' basketball legend Earvin "Magic" Johnson.

"The county and the commission are most concerned with the types of amenities that would be introduced," said Bill Miller, a consultant to the Maryland-National Capital Park and Planning Commission, which owns the 70 acres the arena sits on.

"This is a classic case of whether or not re-adaptation is feasible from both an economic and planning and design perspective," Miller added.

Meanwhile, Pollin and Cordish are working to renegotiate a land lease with the commission that expires in 2012.

Under the current agreement, Pollin pays either $50,000 per year for the arena's land or a percentage of receipts from events, whichever is greater.

A new lease is necessary because the original agreement covered only sporting events and concerts on the property.

Until 1997, the US Airways Arena had been the home of Pollin's two professional sports teams, the Wizards -- formerly the Bullets -- and the National Hockey League's Capitals.

Both teams relocated to the $200 million MCI Center in downtown Washington. By contrast, it cost $18 million to develop the Capital Centre in the early 1970s.

It could not be determined if the decision to tear down the arena will increase the size of the Cordish/Pollin project, or whether the Capital Centre development will be reconfigured.

Parker said Cordish and Pollin are finalizing negotiations now with Prince George's County and won't proceed further until an agreement is reached.

Construction of the retail shops is expected to take roughly 18 months.

Pub Date: 5/26/99

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