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Planners Hope Extra Height Means Redevelopment Of Apex Building

by Aaron Kraut — December 4, 2013 at 8:25 am 728 3 Comments

Rendering of the Bethesda Metro South Entrance elevators if the Apex Building is not redeveloped, via Planning Department

Planners will propose an extra 50 feet in building height in their attempt to get the owner of Bethesda’s Apex Building to tear the building down.

For almost four months, county planners have been analyzing how to convince the American Society of Health-System Pharmacists (ASHP), which owns the building at 7272 Wisconsin Ave., to raze the building so the state can build an optimal Bethesda Purple Line station underneath.

Planners will go to the Planning Board on Thursday with their final stab at zoning changes they hope the Pharmacists group will accept in exchange for losing its profitable building, which includes ASHP offices, restaurants and a popular Regal movie theater.

The Planning Department wants to send the Minor Master Plan Amendment to the County Council by the end of the week, so it has time to debate the changes and associated costs before the end of the year. The Maryland Transit Administration says it wants an answer as to the building owner’s intentions by early 2014, as it hopes to secure federal funding for the $2.1 billion, 16-mile light rail.

Lately, the ASHP has seemed unwilling to raze or part with its building, at least not for the redevelopment package first proposed by planners.

So the revised draft plan to be presented Thursday would allow a redeveloped building on the site to reach 250 feet, up from the 200 feet proposed in September.

At the heart of the issue is how all the elements of an optimal Purple Line station (a high-speed elevator connection to Metro’s Red Line, separate tunnel for the Capital Crescent Trail, Purple Line platform and integrated ventilation shaft) would limit the redeveloped building’s potential on the ground floor.

“We believe the current plan requirements, such as the incorporation of two tunnels, integration of ventilaton, the new addition of a shell-ready Purple Line station and limitations to the ground level will significantly limit the ability to effectively utilize the additional density resulting from the modest increase in [floor-area-ratio],” ASHP Senior Vice President and COO David Witmer told the Planning Board on Nov. 7. “Without modification of the plan to better balance transit and commercial interests, and additional incentives outside the plan, we’re concerned there may not be sufficient benefit to us pursuing such a disruptive undertaking.”

The revised plan says the 250-foot building height (at densities similar to the office buildings near the Bethesda Metro station) will “allow greater flexibility in accommodating on the Apex site the numerous program elements of the improved station and trail.”

It appears allowing for a taller building with more density won’t be the only promise the county may have to make.

An economic study commissioned by the Planning Board found rezoning the property won’t cover the potential losses for the ASHP.

The report, which came out in September, said $5 million to $10 million of public money could be required to close the gap. The plan to be presented Thursday does not recommend a specific amount of money to be doled out, but does say planners have been working with the county’s Department of Economic Development.

If it agrees to demolish its building, the Pharmacists group could sustain tenant relocation and construction costs of up to $25 million, the study said. Some of that would come from having to close down the Regal 10 movie theater, which opened in 1992 and has an estimated 350,000 annual ticket sales generating $300,000 in annual amusement tax revenue for the county.

The other additional cost for the optimal Purple Line station would be the Trail tunnel, which planners recommend run under Wisconsin Avenue to the intersection of Elm Street and 47th Street. That tunnel could have a price tag of $30 million. It also might involve purchasing a small private parking lot on Elm Street that planners say would force the tunnel to have an 8 percent grade, making it too steep to achieve ADA compliance.

The county would save at least $10 million on its bank of high-speed elevators to connect Purple Line riders with the Metro Red Line platform. The savings would come in having the elevators on the Apex Building site, as opposed to on the curb of Elm Street.

The county had previously ditched the idea of including a full Capital Crescent Trail in the tunnel for the Purple Line and Purple Line station. But in April, the Planning Department received a proposal from a nearby developer (one that was later cut out of the Minor Master Plan area) that suggested the county could build a better Purple Line station for cheaper and with an underground Trail crossing.

That spurred a rapid planning process — perhaps the shortest time period the Planning Department has ever devoted to a plan of such consequence — that included public meetings and ongoing negotiations with the ASHP.

If the ASHP agrees to raze its building (or sell it to a developer that will raze the building) planners say the Bethesda Purple Line station will become the center of Bethesda:

With an improved Purple Line Station, the south entrance to the Bethesda Red Line Metro Station, and the Capital Crescent Trail literally under one roof, the Minor Master Plan Amendment Area has the potential to become the new “best address” of the Bethesda Central Business District (CBD). This Area, chiefly the block bound by Wisconsin Avenue, Elm Street, Woodmont Avenue, and Bethesda Avenue, is the eastern gateway to the popular and successful Bethesda Row – the primary center of activity in the CBD – and a key component of the Wisconsin Avenue commercial corridor. The addition of this multi-modal transit hub will enhance the level of activation, access, and amenity for residents, businesses, and visitors.

…The Plan vision for the corner of Wisconsin Avenue and Elm Street showcases a generous and welcoming plaza at the ground floor of a signature building, where commuters have easy direct access to the Purple Line station and, via high-speed elevators, to the Red Line Metro station below. The spacious Purple Line station would be welcoming and easy to navigate, with a large open platform and plenty of room for the projected ten thousand plus daily riders. Getting to the Red Line station would be efficient and streamlined. One level below the street, cyclists will be able to rapidly move through the CBD to get to work, play, or home, in an environment free of automobiles.

Rendering via Montgomery County Planning Department

  • Guest

    The Apex building is one of the ugliest and least functional in all of Bethesda. If the owners don’t take advantage of this situation and raze the crap thing then they truly lack even a modicum of foresight.

    • alex

      I hate to break it to you but “ugly” and “least functional” are not things a real estate owner considers in this situation. As in any free market, all that matters is the money. These owners have to consider the risk of kicking out tenants from a leased building and taking further risk by constructing a new building.

      There are so many new risks that the owner will need to take on if they raze the building such as: building demolition taking longer than planned, new construction taking longer than planned, purple line construction taking longer than planned, the new line potentially adding crime or panhandlers (which are unattractive to a tenant). The biggest risk of all is that their cash cow of a building that is mostly leased takes a long time to lease back up when it is new in Bethesda’s somewhat weak office leasing environment. You also have to remember that the moment they kick out their cash paying tenants they are still sitting on what is likely a many $10,000,000s mortgage (or at least the opportunity cost) which they still have to pay at least 5% per year on. Somehow they have to cover that cash plus account for the new construction costs and how they make go even higher in a few years as the economy and construction market improve.

      This all being said, I still agree with you from the perspective of an outsider looking in. As a citizen I think that building is pretty ugly and I think putting the Purple Line there is a much preferred. At the end of the day though, decisions like this really depend on what the owner’s present financial situation is as well as their appetite for risk.

    • TGuerrant

      I actually like the look of the building and the way it functions. It’s far more interesting and accommodating than the glass box tombs everywhere else in Bethesda.


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