News and notes from Reston (tm).

Wednesday, January 25, 2012

Future Shock? As Metro Approaches, Demand for Commercial Space Slows

lego-block.jpgMuch of the master planning for the post-Metro Reston has been focused around mixed-use projects with lots and lots of commercial space -- giant parallelograms of office-space goodness, where government contracting firms can happily strap bombs to dolphins provide valuable taxpayer services.

But what happens when pie-in-the-sky planning meets the mauve harsh light of reality? We're already starting to see hints as officials warn that the spigot of sweet sweet gubmint dollars may slow in coming years.

Northern Virginia is projected to lead the metropolitan Washington, D.C., area in job production in 2012, but overall it will be an “anxious” economic year, according to the Center for Regional Analysis at George Mason University.

Stephen Fuller, the center’s director, and others provided an economic forecast at its 20th annual Greater Washington Economic Conference in Tysons Corner on Jan. 12.

Fuller said during the next few of years the D.C. area’s economy is expected to continue to outpace the national economy, but cutbacks in federal spending eventually will hit the area hard.

“We have always outperformed the national economy in the D.C. area because of federal spending, but what we will have to work off of will be thinner,” he said. “Like other economies dependent on one sector — Detroit and car manufacturing, or Las Vegas and entertainment, for example —when the sector does well those economies do well; but when they don’t those economies suffer.”
Our BFFs at Reston2020 point out that commercial vacancy rates are already rising, with Reston's 2011 vacancy rate of 17.1 percent worse than both the overall county rate (14.5 percent) and Northern Virginia's (13.7 percent).

So what happens next? It's when developers pony up money to actually get the ball rolling on projects that we can see what they think the market really can bear. (Although sometimes they bet wrong.) Two big mixed-use projects with considerable commercial space -- the Macaroni Grill-killing Spectrum redevelopment and the Reston Heights project on the other side of the Toll Road -- are both now in indefinite holding patterns. Reston Station will likely be only a parking garage when the first Silver Line train rolls into the Wiehle Avenue station in 2013. The next big construction project we'll see is Boston Properties' 359-unit "luxury rental" tower, soon to rise from the last undeveloped lot in Reston Town Center. And almost all of the projects that have been approved of late -- or are desperately trying to win approval -- are residential in nature. (The one exception? The Reston Parkway mauvescraper, which goes back before the county planning commission in March.)

Critics of the fancy Reston Master Plan have long argued that a larger proportion of residential properties in future development will strike a better balance, helping mitigate traffic problems and other negative effects of development. While the Master Plan is still being revised, the market may wind up making some of those decisions for it. Right, Mr. Fuller?
Virginia recently surpassed California as the top state in the country for federal procurement dollars, he said.

“About 903,000 jobs in Virginia were dependent on federal spending in 2008, and Northern Virginia accounted for about 75 percent of that figure.”

It is because of this that Fuller says Virginians — Northern Virginians in particular — will feel the greatest effects of government cutbacks.

“Most of us haven’t ever experienced a time when federal spending did not aid the local economy,” he said. “You have to go back to the Vietnam War era to find a time that the D.C. area had flat federal spending.”
Funny, but that's also the era when Reston was built. It'll be interesting to see if its next great wave of post-Metro construction is shaped by similar circumstances.

1 comment:

  1. If it helps keep our already outrageously over-populated -grad to a measly 60K, I say let the government roll back its spending.

    An added side effect of that might be that the area of the USA called Not-Washington might stop hating on us, or at least not as much.


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