This is an expanded version of the article that appears on page 48 of the Fall issue of Development magazine.
When retail developer Edens first began looking into the possibility of redeveloping 27 acres of land in an area known as Merrifield, VA, the property was not a pretty sight. Occupied by an aging multiplex cinema surrounded by a sea of deteriorating asphalt, as well as an equipment rental business and communications towers, the property did not seem to be a likely setting for a new urban neighborhood. Yet a county comprehensive revitalization plan for the area already was in place, and Edens recognized that all the fundamentals needed to make that plan a success were there.
Those fundamentals included the site’s location just outside the Capitol Beltway, proximity to the Dunn Loring Metro station and Inova Fairfax Hospital, 10 million square feet of existing office space within one mile, and a population of 330,000 people with an average income of $173,000 within a five-mile radius. In addition, complementary new development had been planned for the surrounding area. Mosaic was a perfect fit for Edens’ goal of enriching communities.
Today, the Mosaic District is a $500 million, 32-acre mixed-use project that is transforming that long-underused property into a vibrant, walkable neighborhood with 520,000 square feet of retail and restaurants, a 148-room hotel, an art house movie theater, 4,000 parking spaces in two garages, 138 townhomes, 782 apartments, a one-acre park and, ultimately, more than 170,000 square feet of Class A office space — all set within a walkable grid of streets. The project has attracted strong interest from office tenants despite a challenging office market. Mosaic’s amenities and unique retail and restaurant community attracted CustomInk, Mosaic’s first major office tenant, which recently signed a lease for 58,000 square feet.
The property, which sits amid a variety of light industrial uses and strip shopping centers, as well as a regional post office, Home Depot, self-storage facilities, and garden center, had long been ripe for redevelopment. But it took more than three decades of planning studies and visioning exercises, as well as scores of meetings with local homeowners associations and other area stakeholders, to create the plan that set the stage for that redevelopment.
A task force formed by the Fairfax County Board of Supervisors in 1998 first articulated the beginnings of a comprehensive plan designed to reshape the area known as Merrifield into a place that would become more urban in character. Ultimately, the task force defined a barbell-shaped revitalization area (one of seven in the county) with two core areas; one near the Dunn Loring/Merrifield Metrorail Station and the other less than a mile to the east. That second area was envisioned as a pedestrian-oriented town center. “The comprehensive plan set the stage for everything you see today,” said Barbara Byron, director of Fairfax County’s Office of Community Revitalization. “It was a citizen-driven plan that took multiple years to develop, but once it was in place, it provided a level of surety that the developers could rely on when they came in to build their projects.”
A 168,900-square-foot Target store sits atop three levels of parking and ground-floor shops and restaurants (at left), across from an eight-screen Angelika Film Center (at right), which features a ground-floor cafe,
second-floor theaters, and a third-floor lounge.
Among those developers is Edens, which got involved in the project in 2006, when it teamed up with National Amusements, owner of the movie theater and associated property, and Clark Realty Group, which planned to build the residential portion of the mixed-use project and wanted a partner to develop the retail and other commercial elements.
Edens and Clark worked together to get the property under contract, then began the zoning process. The “Merrifield Town Center” plan developed by Clark and Edens was one of ten “smart and sustainable growth projects” recognized by the Washington Smart Growth Alliance in 2006. But by the time the project had made it through the two-year regulatory process, the nation and region were in the midst of the Great Recession, and Clark and National Amusements had left the deal. Edens bought out both partners’ shares of the project and eventually purchased another four-acre property adjacent to the western edge of the original site, which enabled them to rework the site plan to make it function better and connect a vital east/west street. That improved access to the district as well as its visibility.
Financing and Infrastructure
In 2009, Fairfax County created its first community development authority (CDA), a public/private partnership with Edens. In June 2011, the Mosaic CDA issued and sold almost $66 million worth of bonds to finance the district’s roads, water and sewer system, and park, using both tax increment financing (TIF) and multiple backup special assessments to cover any potential shortfalls. Edens will repay the debt with future property taxes.
Edens has capital from three pension fund investors — New York State Teachers’ Retirement System (NYSTRS), the State of Michigan Retirement System, and a J.P. Morgan fund — and a large credit revolver with a consortium of banks, so it was able to fund the Mosaic development internally, a major plus as the project began to come out of the ground during the recession.
A location just outside the Capitol Beltway and near a Metrorail station, a growing regional hospital, and an affluent population made the Mosaic site a natural for redevelopment.
As the Mosaic District was being constructed, the Virginia Department of Transportation (VDOT) was in the midst of making major improvements to adjacent roads, including the $120 million rebuilding of the adjacent Gallows Road/Lee Highway intersection, through which more than 80,000 cars travel daily. Those improvements also involved raising Eskridge Road more than 20 feet to connect across Lee Highway, the primary east/west thoroughfare, which created a new through road parallel to Gallows Road and connected the Metro station, Mosaic, and Inova Fairfax Hospital. In addition, VDOT was completing its Capital Beltway high-occupancy toll lanes (HOT lanes, now known as the 495 Express Lanes) project; the opening of an entrance to those Express Lanes from Lee Highway offers southbound Beltway travelers easy access to and from Mosaic.
Design Leads the Way
Throughout the design and development process, the Edens team stuck with its land use and design plan. “We are sticklers within Mosaic from a design standpoint, from the way the streetscape looks to the park, from the storefronts to the signs,” noted Tom Kiler, Edens vice president of development on Mosaic. “We feel that design leads the charge in making a great place and great retail.”
“We also wanted Mosaic to feel very organic,” added Kiler. “While we had a design team within Edens to oversee all of the design, we wanted each building to stand out on its own, so we selected a different architect for each building.” The developer intentionally chose architects from outside northern Virginia so that they would not have any preconceived notions about what the project should look like.
Edens also brought in firms to design wayfinding, environmental graphics, and placemaking elements, as well as storefront design criteria for retailers. In addition, the developer hired landscape architects to design pedestrian and vehicular connections, parking layouts, 20,000 square feet of green roof, planting design, and paving. (All of the firms were recognized by the National Capital Region chapter of the American Planning Association in 2012 for creating “a plan developed for a subarea of a community that advances the art and science of planning.”)
Overall, Mosaic’s architecture is much more contemporary than is typically found in northern Virginia, with more flat roofs, glass, and steel. The LEED for Neighborhood Development (LEED-ND) pilot project is LEED-Silver certified; three individual buildings currently are seeking LEED certification; and all of the townhomes are being built to LEED for Homes standards. Several of the District’s buildings also have green roofs, including what is most likely the first green roof in the country on top of a movie theater on Mosaic’s Angelika Film Center.
The district’s two parking garages were designed to be easy to enter and exit, with access/egress from multiple roads within the district. Electronic parking counters in both structures let drivers know how many spaces are available at each level; the interiors are white and bright, few columns obstruct driving and parking spaces; and both garages feature electric car charging stations on their ground levels. Drivers headed directly to the most convenient parking for the Target store are able to proceed straight up a ramp to the third floor rather than circling their way up multiple levels, as in a traditional parking structure. (From the fourth-floor Target, shoppers can take their carts on a special “carts only” escalator to the third-floor parking.) About 70 parking spaces along the district’s streets give them a more urban feel and help activate the streetscape.
Calibrating Retail and Entertainment
Focusing on food-oriented retail was a no-brainer for Edens, said Kiler: “Food has been a piece of Edens’ DNA since the company began as a grocery store and then expanded into grocery-anchored suburban shopping centers. Now, as we move into more urban projects, food remains a critical element.” While Mosaic’s retail is divided into four districts (dubbed Fashion & Design, Glass Alley, Film & Dining, and The Village) and all contain some food offerings, most — including the organic grocery, a butcher shop, a fish market, and a wine store — are clustered in the Glass Alley Market. As of late July, more than 90 percent of the existing 350,000 square feet of retail space was leased and 87 percent (about 30 stores and restaurants) was open. (Several stores and restaurants are still being built out.) Another 170,000 square feet of ground-floor retail remains to be built, as part of the primarily residential and office structures that will go up in future phases.
An organic grocery store and butcher shop anchor the Glass Alley district at Mosaic.
Retailers include an eclectic mix of national, regional, and local tenants. Among the national retailers are big box anchor Target, Neiman Marcus’ Last Call Studio, Anthropologie, and Paper Source; local tenants include Dawn Price Baby, Ah love Oil & Vinegar, Bellacarra, Timothy Paul Home, Amethyst, and the tiny (650-square-foot) Artisan Confections chocolate shop. All were attracted by the Merrifield area’s upscale demographics, the unique storefronts, and the walkable streetscape, which encourages visitors to park once and walk from store to store, restaurant to cinema, and so forth.
Edens didn’t take the easy path — for example, by putting in a traditional Target store surrounded by surface parking — but rather partnered with Target to locate its 168,900-square-foot, single-level urban-style store on the fourth floor, atop three levels of parking and ground-floor space occupied by smaller retailers. Likewise, the eight-screen Angelika Film Center (only the fourth in the nation, and the first outside of New York City and Texas) is not a typical standalone movie theater, but is set within a three-story structure with several restaurants (as well as a café operated by the theater) on the ground floor. Additional anchors at Mosaic include Mom’s Organic Market and a seven-story Hyatt House hotel.
Phasing and Additional Uses Are Key
In the early 2000s, a lot of town centers were being started, but financing problems during the recession often resulted in stalled and incomplete projects. To keep that from happening at Mosaic, Edens delivered all of the Phase I buildings together and phased the project from Lee Highway to the south. That meant putting additional uses (office and hotel) above the ground-floor retail space in order to create the desired urban atmosphere, a new task for the developer. Edens built the office space in one of the buildings on its own, but chose to work with LodgeWorks to build a hotel atop another. During the construction process, LodgeWorks sold its entire portfolio to Hyatt, which is why Mosaic now features a Hyatt House hotel with an exterior that looks like no other Hyatt in the world.
“All of the buildings were constructed and opened on time; execution-wise, our team performed perfectly,” noted Kiler, adding that HITT Contracting built the hotel building while L.F. Jennings constructed the others.
Residential and Office Fill in the Mix
The first residential component at Mosaic — 112 townhomes being built by EYA, a local firm known for building walkable neighborhoods throughout the region — began selling quickly even before construction started in January 2012, with 30 units sold within the first 30 days. Model units opened that July; a year later, 97 units have been sold (at an average price, including options, of $815,000) and more than 75 are occupied.
“Demand is off the chart,” said Jack Lester, EYA senior vice president of land acquisition and development. “Our typical buyers at Mosaic are two 37-year-old professionals with a combined annual income of $240,000. These are pioneers, people who see that this is part of a larger redevelopment and want to get in on the ground floor.”
AvalonBay Communities began building Mosaic’s second residential component — 531 rental apartments in two buildings — in spring 2012; the first building is scheduled to deliver in October 2013. Leasing of the studio, one-, and two- bedroom apartments began this summer. Mill Creek Residential will add 251 more rental apartments in two additional structures on land that was cleared in spring 2013; construction will begin soon and the structures are scheduled to deliver in fall 2014.
The three floors of office space designed by Nelsen Partners (set in a single glass-and-steel structure, above ground-floor retail) were completed in October 2012 and feature nine-foot, six-inch finished ceiling heights and virtually column-free floorplates; each floor could be configured for a single tenant or multiple tenants. Walkways on the second and fourth floors connect the office space to one of the parking garages.
Office users tend to be a bit more conservative than retail tenants; they typically want to see the building, to understand what’s going to be around them. But once the project was substantially complete, office prospects were excited by the tremendous mix of retail and residential uses, which most did not expect to see outside closer-in Arlington County. Early interest came, as expected, from office tenants interested in relocating from Arlington’s Rosslyn/Ballston corridor, as well as some high-end users looking to move from Tysons Corner to a more mixed-use, urban village environment. From a pricing perspective, Mosaic’s office space is competing very well with the Rosslyn/Ballston corridor because it offers free parking, as well as the mix of uses that tenants are used to seeing in Arlington.
Asking rents range from $39.00 to $41.50/square foot, full service. Avison Young chose to price the office building so that the highest-priced space is on the second floor, rather than the top floor, because prospective tenants were interested in seeing the streetscape and feeling the excitement there. Now that the restaurants have started to open and the news has spread about the limited availability of office space in Mosaic, the firm has signed a lease with CustomInk for 58,000 square feet and expects to lease the remaining 15,000 square feet quickly.
What are the five most important lessons Edens learned from this project?
1) Technology is tough. Incorporating new technology — parking counters, a large LED screen, wifi, and so forth — was a challenge and required a bit of a learning curve, yet those elements “were extremely important to us, and a huge focus of our design,” said Kiler. “But once you install that stuff, it has to work,” he noted; “there’s no forgiveness if it doesn’t work. The more — and the more innovative — technological elements you add, the bigger the chance of it not working. It takes a lot of love and care to keep up the high level of service and quality.”
2) Coordination is essential. Coordinating the work of multiple architects, contractors, and developers on an urban-scale site at which multiple mixed-use buildings all are going up at the same time was a major challenge. Using a single civil engineer (VIKA) as well as a landscape architect and environmental designer helped tie the project’s multiple elements together and keep the construction process on track. So did a confidential vision statement and core values that Edens created for Mosaic and shared among team members, which helped keep everyone focused on the same goals.
3) Unique storefronts are expensive. While Edens wanted each of the storefronts at Mosaic to have a one-of-a-kind look, designing every storefront individually became an expensive and time-consuming job that also caused construction issues. “The challenge is how to achieve that look, that authentic feel, more efficiently and effectively,” said Kiler. “That’s one of the things that we’re really focused on now.”
4) Community counts. One of the elements Edens is continuing to improve on at Mosaic is community outreach. “It takes time for people to absorb changes in traffic patterns and new places,” noted Kiler. “So we’re continuing to stay close to the community as new retailers and restaurants open.”
5) Great partners make it work. Ultimately, the biggest lesson Edens has learned from this — and many of its other projects — is to select great partners. It looks for partners that have the same vision and appreciation of design and quality. “Because you can never figure everything out upfront,” commented Kiler, “you need to have partners who you can work with. We’ve been very fortunate in picking great partners at Mosaic, and that’s helped us a lot.” Building the office space at Mosaic on its own was a measured risk for Edens that ultimately worked out. “For future mixed-use projects that include office space,” noted Kiler, “we would like to bring in great office partners, just like we brought in great residential and hotel partners at Mosaic.”
“When we started Mosaic,” said Steve Boyle, managing director for development in Edens’ mid-Atlantic office in Bethesda, MD, “we were fortunate, in that the comprehensive plan connected the nodes of the Metrorail station, the mixed-use center that has become Mosaic, and Inova Fairfax Hospital, which is south of Mosaic. That was really important to us. Our team included Bill Caldwell at RTKL, who laid out the land use plan for Mosaic — and later joined Edens as managing director of the company’s design and construction groups. One important piece of that plan involved keeping all of the roads private so that we could build them out to a pedestrian scale.” (In Virginia, the state department of transportation controls all public roads, and has traditionally built them to be more comfortable for drivers than for pedestrians, although that is beginning to change with the success of places like Mosaic.)
An Open Space Anchor
To help make the Mosaic District a gathering place for surrounding communities as well as the development’s residents, Edens partnered with Fairfax County to build a one-acre park at its center. A 22- by 38-foot LED screen named “Lucy” mounted on the front of the theater building overlooks the park; Friday evening movie showings of family films, Saturday morning “cartoons and coffee” features, and Saturday evening concert showings all have enticed a wide range of visitors to the district, as have weekday “stroller strides” and Sunday morning “yoga in the park” sessions. Interactive fountains, plantings, and benches also help activate the park — making it yet another anchor for Mosaic.