Tuesday, October 30, 2018

David Peete

David Peete is president of BM Smith, a real estate investment and management company established along Columbia Pike in 1908 by his grandfather. It is Arlington County’s oldest continually-operating business, and has built and managed many residences and office buildings along the Pike, including most recently the multi-use Penrose Square complex. He has been recognized by the National Associate of Home Builders with its “ICON of the Industry Award.”  Mr. Peete is Vice Chair of the Washington Forrest Foundation, part of a long-standing commitment by the Smith family of engaging in significant local community service. He also serves on the Board of Directors for CPRO, the Columbia Pike Revitalization Organization.  Earning his undergraduate degree from Tufts University and holding a Masters in Public Health degree from Yale University, Mr. Peete is married with three children.

"I think there are three things that will have a significant impact on the future of Columbia Pike. They are transportation, destination, and what I call anchors.
    I believe in creating a form of transportation that has a nod to speed along the Pike, because people want to be able to get places faster. But at the same time, I think it's important that we don't forget transportation also is a means to neighborhood development. We also need transportation that doesn't just speed by all the neighborhoods, because you need people from those neighborhoods to be able to get on at one place on the transportation system and easily go to another part of the Pike. The Pike is several miles long, so we should have transportation that acknowledges that there's several neighborhoods along the Pike and facilitates relationship and community between those neighborhoods. I think this is important.
    By destination, I really mean activities. There should be enough activities on a consistent basis that create draws not only for people on the Pike, but for those outside the Pike, too. I think you need a certain number of people that continue to bring energy to Columbia Pike. I'll give you a couple of successful examples. The annual Blues Festival is definitely a destination event. I believe that during the summer, weekly movie nights on both the west end of the Pike and the east end of the Pike are terrific. I believe that working on the farmer’s markets, both on the west end of the Pike and the east end of the Pike, is helpful. These are great examples of initiatives that have emerged over the last number of years. We should expand upon these and create more of them. And it takes a little bit of trial and error to see what connects and can bring people.
    Thirdly, from a retail standpoint or a commercial standpoint, I believe creating anywhere from three to five anchors along the Pike, which might be retail centers that are a little bigger than on the rest of the Pike.  They might include in those retail centers at least one regional or national brand that sends a message not only to those living on the Pike but to future small business owners that this is a place that you can come and really do business. I believe that you can create those anchors without sacrificing the overall community of the startup, without sacrificing the mom and pop stores. I believe that controlled, if deliberately and well-managed, three or four anchors will actually enhance and bring others to have confidence in creating other mom and pop stores along the Pike.
A good example would be the one that I'm most familiar with, the property that we manage at Penrose Square. With Starbucks coming on, we were able to rapidly recruit three mom and pop stores to come in. One is a Pilates studio, one is a family Italian restaurant that's designated to be affordable for families along the Pike, and the third is a person who's going to run his first business ever, a personal trainer who does gymnastics-type work. All of them will be here, right at Penrose Square, and one of the reasons is they want to be near the Starbucks. A Starbucks here sends a message to them that, "Wow, Starbucks thinks this is a good place to do business. Maybe this is a place I can successfully start my own small business."
     BM Smith manages a number of properties along the Pike of various ages. Basically, the average life of a building in real estate is about fifty years. After that it generally goes into decay and you either need to put millions into renovating it or you tear it down and start over. Now, after you put millions into stabilizing it, the downside is, potentially you have to increase rents to pay for the millions you put in. I believe along the Pike, we will have some of both things occur. The other piece that I think would be important in helping support the Pike's overall growth and viability is the reemergence of Crystal City, filling the office buildings down there. That would result in an overflow of people who go to offices there and want to live or work on the Pike. Once those offices are full, there would be an overflow of small office businesses that will be looking for space on the Pike. While Crystal City is so open, there is not an overflow. Our office building is about 60% occupied now, and I believe another office building I know of on the Pike is only about 60% occupied as well. The ideal is about 90%. We had been about 90% over the last twenty years until the sequester hit.
Getting back to transit. There could be a “both/and” solution to transportation. There's one form of transportation, especially in mornings and later in the day that's built on some form of speed along the Pike. My concern is I don't want that to be the only form of transportation, because in my opinion, it turns Columbia Pike into basically a turnpike, which ignores the neighborhoods and doesn't build community. There could be, just an idea, the potential for maybe a smaller form of transportation that stops at the different neighborhoods, especially during the daylight hours and on weekends, that helps to build community, so that maybe someone's who's shopping at a grocery store in one of the neighborhoods, they can come and go easily from their neighborhood.
We are the oldest continuously-running business in Arlington. We were founded in 1908 and we've been running ever since. We owned 300 acres in the Ballston area during post Revolutionary War era. Lieutenant Colonel Samuel Shreve came, based on a tip from George Washington. The properties that we own today are not from that area. We first moved to the Pike in about 1896. We had a family farm with thirty acres. Today, that is an apartment building. Another one of our old family homes is the Rite Aid up there at Columbia Pike and Walter Reed. But most of our properties were purchased in the 1920s and 1930s. It was a rural area back then. In fact, it was considered country. My uncle, who was born in 1930, remembers being around eight or nine years old and hearing his father talk about people who had a place in Washington DC having a little summer house along Columbia Pike to cool off from being in the city.
     My grandfather, who founded the company in 1908, primarily built hundreds of houses. He built a lot of houses along the Pike. He also built a lot of the houses in Nauck, and he also built a lot of the houses around Arlington Hospital. And he gave a lot of personal loans to people. To my knowledge, he never foreclosed on one of his houses. If someone had trouble paying, he would give them a break for a few months ‘til they paid. It was truly a small time personal business back then. And he felt a real strong sense of compassion for everyone.
     That is something that got passed on in the family, that sense of giving back. He was one of the first board members of both the Arlington County Board and an early school supervisor. But in the 60s, he had some land just outside of Arlington, where Walter Reed crosses over Route Seven. One of those pieces of land that he sold to the state became Northern Virginia Community College. The money from that sale was used to fund the Washington Forest Foundation, which today is about a $20 million foundation that our family runs exclusively. We give about $800,000 a year to 60 different Arlington and primarily South Arlington nonprofits. We have four or five priorities for the foundation. They range from education to services for the homeless, to housing, to arts, to affordable healthcare, and to food assistance. APAH, AFAC, A-SPAN, the Arlington Free Clinic, and many others. You know, basically survival services, we give a lot in that arena. Another aspect is community. So that would be CPRO. Another is housing, affordable workforce housing. And then education, especially for children and to promote multicultural elements of the community.
I spent the first basically 20 years of my career in senior housing, and then came to this firm in my early 50’s, after my mother's passing. It has been a transition, but one that I've been passionate about and cared about, working with my family members in the last couple decades of my work life. One thing that is important to me, that's important to others in our family, is that all the apartments we manage are along the Pike. We have four apartment buildings that house altogether probably about 1,500 people. We have an office building, and then we have lots of retail throughout Columbia Pike and also down Four Mile Run, as well as in Crystal City. We have basically four or five owners that show up almost every day of the week, who are engaged in those apartments. So if you live in one of our apartments, or you rent from us as a business in Arlington, you are able to interact with us directly. That's one reason we've helped different businesses succeed as well, that the typical landlord might not. We're sort of the management equivalent of a “home grown, organic, authentic, locally-sourced landlord.”
     We've been in what eventually became Arlington since 1789. We moved to the Pike in about 1895 when my great grandfather immigrated from Canada to be with his bride, who was from the Shreve family that'd been here since 1789. And, like an immigrant, he built a little business right on the Pike that would pick people up on Columbia Pike and then take them to Washington DC to tour the city. I think a lot of immigrants today, still think, "Well, if we're near the Capital, there'll be little businesses we can create." And he certainly did that with his horse and buggy. His first purchase was about six dollars for six horses.
     Regarding the Pike thriving, I think thriving means to thread that needle and find the best approach that really addresses transportation, destination, and some anchors so that you can truly have a diverse community. To an extent, diverse means something different to someone else. But if we can have both some regional/national anchors, homegrown businesses, have a culturally diverse street with immigrants and people starting their careers, as well as a place for those that are more established, together, they can build something that's thriving. Unfortunately, those groups don't always connect with each other or they are fearful of each other that one of the other will drive the other out. But finding a way to make that happen, I think as a modern community and one that can thrive in the long run, is possible.
    There is a zoning overlay here. There are a lot of wonderful things about the Pike’s form-based code, but there are some things that in the future probably will be advantageous to tweak. I think with form based code, the potential to have greater diversity of buildings along the Pike exists. Right now, it has a lot of mixed use development specified, which is wonderful. And at the same time, you need to make sure there's enough population density to support that mixed use, because mixed use implies there's retail throughout the ground floor, which needs a large enough customer base to succeed.
For instance, right now, there's an apartment that we have. With form based code, I think the maximum height is six stories. But you have to generate enough money to build off just six stories. If you're building, about twelve stories, the pricing is more advantageous; it's the same piece of land, the cost is the same, so the pricing can be more moderate for everybody if you have a greater number of units on that same piece of land.
     So we're trying to find that balance, because you want to protect the integrity of the neighborhoods. No one living in a residential neighborhood wants to feel overrun, but yet you want to maintain a certain affordability with new property. You can always create affordability with older property that's not up to date or maintained completely, but eventually that property fails and you have to invest. It's just a matter of time. Obviously groups like APAH (the Arlington Partnership for Affordable Housing) are trying to address that, but if you want a larger number of developers involved in that, then you need to create maybe a little more opportunity to increase the density on some of those units. Which, by the way, would also help the retail and commercial businesses beneath.
     One piece of diversity that I still appreciate is Penrose Square, the park that the county built next to our development. It really is a stunning place in the summer because you have a lot of ways to define diversity. You have age diversity, cultural diversity, gender diversity, and I would say economic diversity, all within that space. And part of it is the water fountain that draws people to it.

I would love to see other places like that along the Pike, and I'm hoping that other developers also work with Arlington County to build new places. That's generally how those things are funded and that the opportunity exists to create other unique centers along the Pike for the community to gather, feel safe, and joyful at the same time."

Interview and photography by Lloyd Wolf.

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