Two new Silver Spring office towers proposed

City Place Mall, Georgia near Thayer would be sites

Wednesday, Sept. 13, 2006

Citing downtown Silver Spring’s tight office vacancy rate, separate developers are seeking approval to build two eight-story towers at marquee locations — one along Georgia Avenue and the other atop the City Place Mall.

Together, they would add about 320,000 square feet of Class A space, which fits into Montgomery County’s goal of adding mixed-use development under the master plan for the downtown area.

‘‘Vacancy rates in Silver Spring are at historical lows,” said Jeffrey Dierman, a principal with Dierman Realty Group who developed City Place Mall and has proposed adding the tower.

The Silver Spring vacancy rate has fallen sharply in recent years, from 18 percent in 1997 to 9.8 percent in 2005 to 4.2 percent in the second quarter of this year, according to a report by CB Richard Ellis, a commercial real estate services company headquartered in El Segundo, Calif.

Dierman estimated that the City Place tower would cost about $220 per square foot to build, or $35 million. The City Place office tower revives a project that was first approved in 1989 as a complement to the retail mall but was scrapped when the real estate market collapsed.

The Studio Plaza project, rising behind the storefronts of Georgia Avenue near Thayer Avenue, would serve as a gateway for the planned renewal of Fenton Village.

Studio Plaza developer Robert Hillerson has proposed a complex that also would include ground floor retail space in the office building and in a nine-story condominium. Pedestrians would have access to the project from Georgia Avenue through Mayor Lane, named for the late Norman Lane, a homeless man who was considered Silver Spring’s unofficial mayor and is memorialized in a bust and plaque.

Hillerson has even more ambitious plans for the site, which includes parcels of Georgia, Thayer and Silver Spring avenues.

‘‘There’s a bigger story here,” he said. His company, Michael LLC of Silver Spring, has proposed building more housing units on a county-owned parking lot, which sits like a doughnut hole within the Studio Plaza plans that were submitted to county planners in July.

The county sought requests for proposals for the 77,420-square-foot lot in December but then canceled the solicitation when state planning officials developed a list of alternative alignment plans for a possible Metro Purple Line, one of which would run through the property.

‘‘Our plan is to move forward with the one plan [as submitted] and see how fast the county development review office moves on it versus the state and county making a decision on the alignment,” said Robert Metz, Hillerson’s attorney. ‘‘It will be a much better project if we can use the parking lot.”

The county had sought proposals that would include 30 percent of housing units reserved for affordable or workplace housing. The Studio Plaza plan as submitted would set aside 15 percent for that purpose.

Dierman has tapped Morris & Ritchie of Towson, the original architect of City Place, to update his office tower plans. The proposal calls for 159,058 square feet of Class A office space. Like the mall, the office project mimics the Art Deco design elements of the original Hecht’s department store on the site. The proposal also would allow for office conversion of 42,000 square feet of space previously occupied by the now-empty mall’s movie theater.

The City Place office plan comes as welcome news to residents, who have been pushing for the mall to attract more upscale stores.

‘‘I think anything that would add to the appeal of City Place will win support,” said Alan Bowser, a member of the Silver Spring Citizens Advisory Board’s development committee.