August 2, 2024
Real estate magnate Chuck Kuhn has the Waterside development site in Sterling under contract, with plans to revise the mixed-use vision there with little to no office.
The property comprises some 225 acres, including the Chantilly Crushed Stone quarry that would become a lake, currently entitled for more than 3 million square feet of mixed uses, including multifamily, age-restricted housing units, office, hotel, retail and civic space. Kuhn’s JK Land Holdings LLC, most known for its Midas touch in land investments for data centers, has a pending deal to buy it — not for data centers, but for some new mix with a much-reduced office component.
Kuhn, the CEO of Sterling-based JK Moving Services, declined to name the contract price. The contract seller is an affiliate of The Gudelsky Group, which owns and operates the existing aggregates mine there. Gudelsky didn’t return a request for comment.
Kuhn’s project, for which he plans to submit a concept plan to the county in the next month or two, would comprise residential, retail, stand-alone flex, light industrial and maybe some entertainment, he told me in an interview. The precise mix isn’t worked out yet. It might include “a little bit of office,” but in general the area is already experiencing an oversupply that he doesn’t feel compelled to add to, Kuhn said.
As it stands, Waterside is entitled to include nearly 2.2 million square feet of nonresidential uses. Some 521,000 square feet are earmarked specifically for office, while more than 1.6 million square feet could be flexibility apportioned across office, retail, hotel and theater.
As for data centers, the Loudoun board has made clear it has no intention of approving that use so close to the Innovation Center Metro station — Waterside is within a mile walk of the Silver Line station. Kuhn has expanded his umbrella in recent years from real estate investing to development, largely of data centers and commercial. This would his largest mixed-use project, he said.
Kuhn said he does not have a development partner for Waterside at this time.
His plan looks unlikely to include a new stadium for the Washington Commanders, who offered to buy Waterside in 2022 but whom Gudelsky turned down, sources told us at the time. Asked whether his vision could still include the Commanders, Kuhn told me he’s “hopeful” the team ends up back in the District, where it’s eyeing a return to the RFK Stadium campus.
KLNB is brokering the deal and Urban Ltd. is the development project’s engineer, Kuhn said.
Kuhn’s unease of including office at Waterside generally tracks with what other developers are doing. So far in 2024, Loudoun County has issued building permits for only 920 square feet of office space, compared to about 2.7 million square feet of flex space, all of it for data centers. That’s according to a July 25 economic report delivered to the Board of Supervisors’ finance committee.
Asked whether this dearth of office demand calls into question the often office-heavy premise of mixed-use placemaking, Buddy Rizer, who heads the county’s economic development department, said no. Rizer noted that, while Loudoun has never been a huge office market, except to the extent flex buildings might include some office space, the county nevertheless has “some opportunities” to capture “flight-to-placemaking” and flight-to-quality demand from commercial tenants, especially around Silver Line Metro stations.
Supervisor Koran Saines, D-Sterling, whose district includes Waterside, told me in an emailed statement he believes Waterside is “ideal” for residential, retail, office and entertainment and sports uses. But he cautioned against pulling back too much on office.
“Office use will come back, and I encourage developers to be forward thinking, as this urban environment is prime with access to Metro and potential for pedestrian connectivity throughout, making it a high destination environment that I encourage in Sterling,” Saines said.
Waterside sits immediately north of Rivana, another huge mixed-use development site next to the Innovation Center Metro station. County lawmakers approved a rezoning there in 2023, paving the way for about 6.4 million square feet of new development — including 2.4 million square feet of office — on what’s currently vacant land.
Source: bizjournals.com
