20 October 2000. Thanks to D.
http://washingtonpost.com/wp-dyn/articles/A41553-2000Oct19.html
By Jackie Spinner
Washington Post Staff Writer
Friday, October 20, 2000; Page E01
The D.C. Zoning Commission, prompted by concerns that fortress-like buildings could overwhelm some areas of the city, adopted emergency measures this week that restrict development of a type of structure known as a "tech hotel," a move that outraged business leaders who say the city is throwing away its chance at a role in the technology economy.
District officials said they have been deluged by plans for the tech hotels, a term typically used to describe data centers or telecommunications switching stations. These centers are often warehouse buildings filled with fiber optics and other telecommunications equipment.
The centers, which are multiplying all over the region and country, usually have just a handful of employees to tend the machinery.
The new D.C. regulations, which were proposed by Planning Director Andrew Altman with the blessing of Mayor Anthony A. Williams (D), require that future data centers be built underground or go through a special review process to determine their effect on the surrounding neighborhood.
The regulations infuriated business boosters who have been trying to promote the city's emerging technology corridor in the area north of Massachusetts Avenue NW, called NoMa. Data centers, they say, can serve as magnets for other technology companies.
"This is a disguised 100 percent moratorium," said Marc Weiss, a former consultant to the city's economic development office who has been active in promoting the New York Avenue business corridor. "This is going to be killing the goose that laid the golden egg. We will have lost the opportunity to have a technology district."
Tech hotels can be the critical first component in creating a vibrant technology community because they provide the connectivity that Internet and other high-tech companies need.
But Altman said they also create "dead zones," because they are not big employment hubs and are often surrounded by high security, making them look and feel like compounds.
He estimated that at least 1.5 million square feet of new commercial space in the city is being proposed for data centers. Many of those proposals are tied to land speculation that Altman said could lock up key development tracts around the planned Metro station on New York Avenue.
"We're not saying cyber hotels are out and out negative," he said. "We're saying they need to be in an appropriate location. It's a balancing act."
The emergency restrictions were enacted on Monday and will remain in effect for three months while planning officials invite public opinions on permanent regulations.
Although business leaders complained that the restrictions caught them off guard, Altman said it was necessary to move quickly because there is no review process for data centers. That means they pretty much can locate anywhere in a commercial zone.
"You don't want to tie up prime sites where the Kmarts could come in," Altman said yesterday in an interview. "We had to get this in place. As we're sitting here talking, projects could be getting approved and by the time we're finished talking there's nothing left to do."
The real estate community had a rapid-fire response to the restrictions after learning about them after the fact. A flurry of faxes, e-mails and phone calls went out over the last couple of days as brokers with deals in the works and developers in the midst of land transactions tried to figure out what the emergency measures meant for them.
Mark Mallus, an executive at real estate brokerage CB Richard Ellis, said he was concerned that the city had taken an "alarmist" position.
"Somebody has this fantasy that all of a sudden these blocks are going to be filled with giant computers," he said. "It just doesn't make sense. These companies are providing the impetus of what is happening and now all of a sudden they are radioactive."
Cathy Sattem, spokeswoman for Level 3 Communications, a Denver-based telecommunications company that is planning to build a four-story switching center at First and K streets NE, said the building may not employ many people, but it will create energy in the neighborhood.
The state-of-the-art building would take the place of a surface parking lot across the street from two grungy D.C. government buildings.
"Most of the time cities are really excited," Sattem said. "We run our broadband network to the businesses and the Internet economy. Level 3 sees itself as an enabler."
Some of those companies that it could enable are not opposed to the new restrictions.
Elliott Frutkin, president and chief executive officer of D.C.-based Doceus Inc., an Internet consulting firm, said companies such as his are having a hard time finding office space because data centers consume so much of what is available.
He said the city has been too focused on technology infrastructure, which takes care of itself.
"The city in general needs to have a clear policy of people over wires," he said. "It's what makes the city the city."
Matthew Pittinsky, chairman and chief executive officer of Blackboard Inc., a D.C.-based Internet software developer, said access to technology infrastructure is important, but it is not the reason his company chose to locate in the District.
"It's about quality of life," he said, noting the his offices are close to Metro, dining and shopping. "Given the choice, I would vote for quality of life any time."
Altman said that's what his office is concerned about. He said a glut of data centers near a new Metro station on New York Avenue or on the waterfront in Southeast Washington would occupy valuable space that could be used for stores and other conveniences.
"The tech firms like the city because it's the city, not because it's a suburb," he said. "They don't want another sterile park. We've got to guard against it."
Developer Douglas Jemal said the proposed regulations could have some merits. But he, like others in the business community, said the city should have consulted business before taking what some see as a drastic measure.
"It could have been handled a little differently," he said.
© 2000 The Washington Post Company