With real estate prices skyrocketing in prime locations throughout the District, many businesses searching for office space might feel forced to look to Maryland or Virginia. But Del. Eleanor Holmes Norton (D-D.C.) is fighting to keep federal agencies and businesses inside District limits and is encouraging those looking for space to look north — north of Massachusetts Avenue.

“This is the last remaining downtown area of Washington to be developed,” Norton said of the area now locally known as “NoMA.” “I’m always being told about how agencies can’t find space here and are being forced out of D.C. I’m trying to alert federal agencies that their best chance at finding space at rates they could afford would be to weigh in early in NoMA before NoMA becomes an off-the-charts, too-hot-to-afford neighborhood.”

But while NoMA, roughly defined as the area east of North Capitol Street and west of the Union Station railyards stretching from G to Q streets in Northeast, is now attracting more economic development, it has not yet undergone a total revitalization.

Premier Pioneer

When XM Satellite Radio CEO and President Hugh Panero made the decision to set up shop in NoMA, he was a “pioneer,” according to Norton. The company’s headquarters, located at 1500 Eckington Place NE, opened in July 2000.

However, the decision of where to relocate wasn’t made at the snap of a finger. David Butler, director of corporate affairs at XM, said the company originally looked at a number of places in the D.C. metropolitan area, including Maryland and Virginia.

“There were a number of factors at play,” Butler said. “We chose an urban area rather than a suburban area.”

The ability to drive 20 or 30 minutes from the headquarters and be “very removed from the city life” made settling in NoMA even more appealing, said Chance Patterson, vice president of corporate affairs at XM.

“D.C. made a lot of sense in terms of recruiting, quality of life and the government,” Patterson said.

As both a technology and entertainment company, Patterson said anchoring the headquarters somewhere such as Tyson’s Corner, Va., to be part of “a concrete jungle along the highway” didn’t fit the image the company hoped to attain. Rather, XM wanted to be near the city, public transportation and music venues where artists perform.

“We visualized that P. Diddy probably doesn’t want to hang out at Dulles Airport; he wants to hang out downtown,” Patterson said.

But the NoMA area has its share of problems. In a Washington Post op-ed Panero wrote on Nov. 20, he said, “there were drug traffickers on the corner and bullets on the roof” when those at XM first toured the site of its headquarters. He also said the Northeast neighborhood “was not a place you wanted to be after dark,” but that did not stop XM from moving in.

Norton said Panero “had the vision to come and the smarts to come” to NoMA, even before much development was occurring in the neighborhood.

“A businessman does not make a business decision to go to an area where drug traffickers are if he thinks they’re going to be there very long,” Norton said. “It does not mean there aren’t places in the area where you haven’t built yet where there aren’t problems, but this is an area where there are going to be not just offices, but hotels, restaurants and other amenities.”

One of the most recent additions to the area is the opening of the New York Avenue-Florida Avenue-Gallaudet University Metrorail station, which is another step closer to what Panero had envisioned for the area years ago.

“There’s been a renaissance of sorts, people have moved into the neighborhood, including some of our own employees, and people are spending money renovating their homes,” Patterson said. “It’s a much more stable place. We intend to be here for a long time, and so far, so good.”

Transportation Obligation

One major selling point for agencies and businesses looking to relocate within the District is access to public transportation. The Washington Metropolitan Area Transit Authority motto “Metro opens doors” takes on a literal meaning within the NoMA area, as XM, among others, made its move to the area contingent on the promise of a Metrorail station.

“This was one of the few areas, despite its downtown location, that didn’t have the [Metro] access,” Norton said. The station “is the mecca, yes, it has a mecca-like effect certainly on federal office space and other amenities as well.”

However, access to NoMA is now abundant, as the Metrorail station, with entrances on Florida Avenue and M Street Northeast, began service on Nov. 20. The Red Line station cost approximately $103.7 million and was funded by the D.C. government, federal government and area private land owners, according to Metro’s Web site.

As the 84th station on the rail network, it is the first “in-fill” station, meaning it is the first to be constructed between two existing and operating stations (Union Station and Rhode Island Avenue-Brentwood).

Making the Move

The Bureau of Alcohol, Tobacco, Firearms and Explosives, soon to be the new kid on the NoMA block, realized almost 10 years ago that its current building was no longer sufficient for its needs.

“The ATF a few years ago was anxious to find land in D.C. for an entirely new headquarters and was literally pulling its hair out because it couldn’t find space,” Norton said, as she pointed out that a Metrorail station in the area was necessary before ATF would commit to NoMA. “Now the Metro is there with the ATF building going up as I speak.”

The need for a new headquarters arose following the 1995 bombing of the Murrah Federal Building in Oklahoma City. ATF Director Carl Truscott said after the bombing, additional security enhancements were necessary that the department’s current building at 650 Massachusetts Ave. NW could not accommodate.

Before settling on the site at New York and Florida avenues Northeast for its new headquarters, Truscott said ATF looked at nearly 100 different locations, including ones outside District lines in Maryland and Virginia.

“We did have an interest in keeping ATF in the District and close to other departmental offices,” Truscott said.

The new building, which will encompass more than 400,000 square feet, is one of the first federal, non-courthouse buildings since the bombing in Oklahoma City to incorporate all federal security standards established by the Interagency Security Committee of the General Services Administration.

In what Truscott considers a “win-win” situation for both ATF and the NoMA area, he said he likes to think that ATF’s presence “will add to the economic revitalization of the neighborhood.” One step toward the revitalization is the intentional exclusion of a cafeteria in the new building.

“We’re going to house about just over 1,000 employees and there are going to be folks who are going to be coming and going from our headquarters,” Truscott said. “Ultimately it was our agreement that our folks would get out and go to retail shops and restaurants in the community.”

On-site construction for the new ATF headquarters began in July 2004. Designed by architect Moshe Safdie, Truscott said the building should be ready for move-in by late spring or early summer of 2006.

Limited Options

Norton, in explaining what she sees as the appeal of NoMA, honed in on one of the District’s biggest problems: space.

“You cannot build high [in the District] because of federally imposed height limits to save our monuments from being overwhelmed, so our options are limited compared to other cities,” she said.

The District, Norton added, is “so hot a city that if anything, the housing market is forcing people out of the city.” Office space always has been hard to find, and it becomes even more difficult when surrounding real estate is going through the roof, she said.

In January, Norton held a briefing at XM’s headquarters to encourage development in the NoMA area.

“I simply wanted to bring the agencies together with the people who will be doing the developing so the agencies won’t say, ‘Why didn’t someone tell me [about NoMA] sooner?’” Norton said.

The neighborhood is evolving in a positive way, and it is all happening very quickly, Patterson said.

“There is a reluctance to go where other agencies have not yet pioneered,” Norton said. “If you wait, you won’t be able to afford to get there.”