"This is such a rare opportunity for us because it's the biggest single open available space inside the Beltway and we think it's the finest development piece on the east coast," says Daniel B. Kohlhepp, Crescent's regional vice president for the mid-Atlantic region. "When I studied real estate back in the '60s, we dreamed about building new towns and cities, and now here's a chance to do that, and do it in the capital of the free world."

The site, which includes 88 acres in Arlington and 212 acres in Alexandria, was the subject of hundreds of meetings over several years as CAP officials put together a mixed-use plan that includes retail, office and residential space that met the approval of federal, state, county and city officials as well as local groups. The plan for Alexandria, approved in September 1999, includes 1.9 million sf of office space, a 625-room hotel, a 135,000 sf town center/neighborhood retail complex and 1,900 residential units.

The Arlington plan, approved last October, includes 2.8 million sf of office space, a 625-room hotel, 800 residential units and 100,000 sf of retail space. The plan also calls for a 25-acre park north of Crystal City that will be owned by Arlington County.

"We've been aware of the Potomac Yard and the work that CAP has been doing there … CAP went to literally hundreds of meetings and ended up with a plan which is really an example of cutting-edge mixed-use urban development," explains Kohlhepp, of Crescent's interest in the property. "So when it came to the next step, we thought it provided us a great opportunity to do what needed to be done."

Some CAP officials will remain involved in the site plan approval and the actual development of the site, which until the early 1990s served as a rail switching yard for the Richmond, Fredericksburg & Potomac Railroad. A fund managed by the New York investment bank Lazard Fréres purchased the railroad and the property in 1996, and changed the company's name to Commonwealth Atlantic Properties Inc.

Kohlhepp says Crescent officials will meet with all the people involved in the development of the property. "We want to get a keen sense of the lay of the land and assure people that number one, we like the plan and number two, we're going to build it, and do it with integrity and as good citizens," he says. Next, they'll develop an action plan so that construction can begin next year. The development is expected to take 10 to 15 years to complete.

"Our primary objective at Crescent is to create long-term value and enhanced quality of life in the projects we build and manage," says Crescent Resources president Arthur W. Fields. "Our commitment to a quality development at Potomac Yard means creating a place that both enhances the quality of life for our neighbors as well as for the project's future residential and commercial tenants."

Jefferson Davis Highway/Route 1 and Crystal Drive bound Potomac Yard to the west, Four Mile Run and Alexandria to the south. The CSX railway bounds it to the east and the 27th Street viaduct to the Ronald Reagan National Airport bounds it to the north.

Duke Energy formed Crescent Resources LLC more than 30 years ago as a land management and real estate development company. Locally, the company is developing the 101-acre Commonwealth Centre at Westfields in Fairfax County, VA. Plans there call for an eight-building, 1.5 million sf corporate campus.