When Doug Jemal looks at the old Hecht Company distribution center, a vacant warehouse on noisy New York Avenue NE that he bought for $20 million in 2011, he sees a property that’s “gonna be worth $200 million.” When he looks at the surrounding neighborhood, economically depressed Ivy City, he sees an area that “could be the Meatpacking District” and “the coolest part of town.”

But how the prolific developer plans to convert the hulking building and its surroundings into the hip environs he imagines has just changed. Where Jemal and his company, Douglas Development, planned until recently to build offices, they’re now aiming for about 330 apartments above two stories of retail. “That is the truth, 100 percent unequivocally,” says Jemal’s head of construction, Paul Millstein, when asked about the switch to residential, first reported in a brief item in the Washington Post.

The first two floors of the historic Hecht’s building will feature retail, as will an adjacent building Douglas is constructing, for which it’s signed a lease with its first tenant, Mom’s Organic Market. Above the Mom’s building will be a parking garage that is being constructed to allow a conversion to residential units in the future should demand shift. That structure has already been built out of precast concrete and will begin to be erected on the site next week or the week after. The Hecht’s building will have a central courtyard to allow more natural light into the apartments.

Millstein says the original plan for the historic building at 1401 New York Ave. NE was for residential, but Douglas was unable to secure financing. “Our initial intentions were residential, but when we floated that out to the market about eight monts ago, we couldn’t get any traction from any potential lenders,” he says. “Now, eight months later, we’ve torn down some of the warehouse building, we’ve signed the Mom’s lease, New York Avenue is slowly but surely getting cleaned up, and the schedule’s accelerated.”

Douglas “didn’t get any traction on office,” Millstein says, but continued to see the need for residential units near central D.C. but without the sky-high rents along the central corridors. Now the company has a lender lined up to finance the residential construction. He says he’s been in communication with the local Advisory Neighborhood Commissioners and will present the project to the ANCs in December.

The site is currently zoned industrial, which means Douglas will need to get the Zoning Commission to change the zoning in order to allow residential occupancy. Millstein says Douglas will file for the necessary zoning relief this month.

Photo by Darrow Montgomery