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WASHINGTON — DC USA, a 540,000-square-foot, $150 million shopping center anchored by Target, is opening this week in the ethnically and economically diverse Columbia Heights neighborhood here.

This story first appeared in the March 6, 2008 issue of WWD.  Subscribe Today.

The area, which has struggled with deteriorating buildings and crime since the riots of the late Sixties, is emerging as a potential hot shopping destination with DC USA as the main draw.

The shopping center was developed by New York’s Grid Properties, which specializes in large-scale urban retail projects, including Harlem USA, where Target also fills the anchor role. DC USA has about 30 stores and tenants, including Lane Bryant, Bed Bath & Beyond, Best Buy, Marshalls, Staples, the Children’s Place and RadioShack.

Minneapolis-based Target unveiled a 159,000-square-foot store on two levels — its first in the District of Columbia — during a launch party Tuesday night for 2,000 guests, including government officials, community leaders and several hundred newly hired Target employees.

The retailer’s long-anticipated arrival signals more than shopping convenience for Columbia Heights. Local residents overwhelmingly supported the DC USA project, which has brought jobs and renewed activity to the neighborhood. Most of the area’s new developments, including luxury apartments, restaurants and a supermarket, have been built on long-vacant lots.

“The main benefits [of this complex] are prosperity and proximity,” said Washington council member Jim Graham, who represents the area. “It’s bringing jobs, taxes and shopping opportunities to our local neighborhoods.”

When fully opened at the end of the month, DC USA is expected to employ about 1,200 people, most of them city residents. The complex is about 80 percent leased, said Drew Greenwald, president of Grid Properties.

A final step in the development is enticing more upscale retailers, such as Banana Republic and Urban Outfitters, to join the mix of stores. The complex has about 25,000 square feet of space earmarked for such retailers, but Greenwald said some had been hesitant to sign on, given the area’s reputation and unproven status as a retail hub.

“We really do believe there is a very strong market here for those types of retailers, as well,” Greenwald said. “It is a longer process to convince them to take the chance on an area that might not have been on their radar.”

Grid Properties has hired Cushman & Wakefield to help lease space to higher-end retailers. “We were marketing this project as an empty piece of land and we were still able to demonstrate that it was a great opportunity,” Greenwald said. “Now that we have the building to show, as well as the development around it, we think the hesitant retailers will realize its potential.”

Community leaders said Target’s arrival could help make Columbia Heights a major destination for shoppers. “This is a dream that began in rubble and has become a win-win for everyone,” said Lawrence Guyot, a member of the board of the Development Corporation of Columbia Heights. “There is no substitute for stability.”

Guyot said the activity connected with the complex is helping to make the neighborhood safer.

Ayris Scales, a 30-year-old project manager in the deputy mayor’s office, left the Tuesday event with three shopping bags filled with everything from pasta to a Nintendo game. Though Scales lives in the city’s southeast, she said she expected to frequently travel northwest to Columbia Heights to shop.

“The city is still so underserved in terms of retail options that this opening is exciting for everyone, no matter where they live,” she noted. “It has a great central location that’s easily accessible. I definitely plan on coming here regularly.”

One of DC USA’s biggest assets is its close proximity to a Metro station. The shopping center also has an attached low-fee parking garage with 1,200 spaces.

As guests left the launch party with shopping bags in hand, Greenwald dismissed the notion that the downturn in the economy would cast a pall. “The strong retailers keep moving, downturn or not,” he said.