Downtown Crown is poised to deliver on consumer demands near Washington, D.C.
By Tammy Murphy
Downtown Crown is the emerging heart of a 182-acre, mixed-use community taking shape at a key crossroads on the outskirts of Washington, D.C. Anchored by new dining, shopping and living opportunities, this open-air retail center is arriving on the landscape of Montgomery County, Maryland — the 12th wealthiest county in the nation — at a time when consumers are fine tuning shifts in retail spending and preferences.
From the latest advancements in designing popular and effective public spaces to targeting retailers that reflect consumer lifestyle patterns, Downtown Crown is positioned to become a destination hub for socializing and shopping. It is situated at an interstate crossroads served well by public transit. Packed parking garages and long restaurant waits at an adjacent commercial center signal the unmet demand for additional options.
North Carolina-based Harris Teeter has already signed on for Downtown Crown, and will open in late 2013. A national fitness club has also committed, and restaurants of all styles and formats are angling for space. Even fashion retailers, who have suffered during the economic downturn, see the potential in Downtown Crown and are reaching out.
“We are quietly excited about the well-known names and range of interests that are inquiring about Downtown Crown,” says Krista Di Iaconi, a principal at JBG Rosenfeld, which is developing the 260,000 square feet of shops and restaurants. “We couldn’t be happier with the response, but we know the high level of interest is due to the grand plan for this community and the excellent location and demographics.”
Crown is a mixed-use development in Gaithersburg, Maryland, that caters to the growing demand for lifestyle communities — those that serve as multi-purpose environments where living, shopping, working, playing and socializing coexist.
Di Iaconi pointed to the 2,250 homes being developed at Crown, including 540 apartments lofted on four levels above the Downtown Crown retail space, as a built-in consumer base for the merchants. In addition, 256,000 existing residents live within 5 miles of the Crown development, which is situated in the nation’s third largest biotechnology cluster.
Government projections estimate another 52,500 science and technology jobs will be added in the area over the next several years; thousand of those new workers are expected to live in or near Crown.
Currently, the core shopping and dining districts in Montgomery County are in down-county areas such as Bethesda, which are highly urban environments abutting the District of Columbia. Most of the county’s large shopping venues outside those urban areas are anchored by big-box retailers and chain restaurants.
Over the last decade, data from the Urban Land Institute, International Council of Shopping Centers and others has shown that consumer lifestyle preferences have helped lead the shift away from enclosed malls anchored by department stores that sell similar merchandise to outdoor retail centers where there tends to be more choices for social experiences, local dining and specialty retail. Average shopping time in malls has been reduced, and new enclosed mall construction has virtually stopped, though redevelopment continues.
In addition, 2010 Census statistics show that consumers are increasingly spending a higher percentage of disposable income on dining and entertainment, while expenditures on retail goods have declined during the downturn.
“Financial uncertainty has shifted priorities from ‘status defining’ purchases to a focus on personal relationships and socializing,” explains Tom Moriarity, a principal with The Eisen Group, a real estate development consulting firm based in Washington, D.C. “For example, personal spending has shifted from buying ‘things’ to dining out with family and friends.”
He pointed to these statistics from the federal government on national spending between 2000 and 2010:
• Spending on apparel, accessories and related services declined by 24.7 percent.
• Spending on furniture and home décor declined by 13.6 percent.
• Discretionary spending on vacations, luxury items, etc., declined by 14.6 percent.
• Spending on dining out, alcohol and entertainment increased by 6.6 percent.
“Gen X and Gen Y consumers are more interested in spending for sociability experiences with their friends than in shopping,” says Moriarity, who specializes in retail and community center projects.
“Downtown Crown is in the perfect position to capitalize on the latest consumer trends,” he adds. “It has the potential to become a retail destination and social gathering place, not only for those who live there but for a large swath of suburban Montgomery County.”
As JBG Rosenfeld representatives work to establish the retail mix at Downtown Crown, they are taking the needs of the Crown community into consideration along with all the market research. Dining and the social experience will be an important part of the equation.
Mintel, a leading market research company, predicts the U.S. restaurant industry will be worth about $416 billion in 2012, up about $13 billion from 2010. They also predict fresh and local fare will drive industry growth, as consumers become more conscious of sustainable farming and local sourcing.Census figures released in January also show that sit-down dining increased almost 9 percent nationally over the previous year, the fastest growth rate in more than a decade.
“We expect Downtown Crown to be an active social destination,” says Di Iaconi. “About 50,000 square feet of the Downtown Crown retail space is earmarked for dining, and our merchandising plan includes a focus on local chef-driven restaurants and others that bring new offerings to the area.”
The Downtown Crown experience will enhance what is currently available in the market, she says.
One of the aspects of the bigger Crown picture that developer SunBrook Partners believes will make it appealing is the integrated land-use plan that brings a walkable, urban feel to the suburbs while at the same time maintaining a strong sense of community.
Single family homes and townhouses will spread out from the retail district, and be grouped around pocket parks and alongside hiker-biker trails. An historic barn on the property will be restored and preserved, and a full-size city park will be also become an integral part of the community. In addition, 33 acres have been reserved for a future high school.
Crown is being developed in phases and will consist of three “neighborhoods” with varying densities, including the mixed-use Downtown Crown with 260,000 square feet of retail and 540 apartments. The weaving of the residential neighborhoods with parks and open spaces create a community with green space as the central theme. In total, about 40 percent of the residential acreage and 20 percent of the commercial acreage will be maintained as green space, according to planning documents.
Crown was planned under the U.S. Green Building Council’s guidelines for the LEED for Neighborhood Development pilot program, meaning the project as a whole — not just particular buildings — was designed to national standards for sustainability and environmentally sensitivity. Some major components of that design are the community’s transit accessible location, planned transit programs such as a commuter shuttle, and the walkable design of the integrated neighborhoods.
Crown’s location in a burgeoning biotech cluster supported by universities, research and technology employers and government facilities is an added bonus, says Robert Zeiller of SunBrook Partners.
“We are taking full advantage of this great ‘meds-feds-eds’ location, the style of living and taste those employees expect, and the fact that Crown is so well-served by existing roads and transit,” he says.
Within walking distance to Crown are campuses of Johns Hopkins University and the University of Maryland, which rub shoulders with Adventist HealthCare and the National Cancer Institute. Nearby private companies include Marriott Corp., Lockheed Martin, MedImmune, Human Genome Sciences and Otsuka Pharmaceuticals. Local officials have designated the immediate area as a “science city,” naming it the Great Seneca Science Corridor served by two interstate highways and a planned transitway. Currently, about 32,000 businesses employ more than 361,000 workers in the area, which local officials agree is underserved by dining and retail establishments.
Collectively, officials have embraced the arrival of Downtown Crown and its new retail and housing opportunities at a time of growing need.
“This is a very strong customer base that will be well-served by our restaurants and shops,” Di Iaconi says. “Retailers are quick to recognize those appetites and demographics.”
— Tammy Murphy is a writer based in the greater Washington, D.C., area.