As the temperature dipped Thursday, Kathy Chien, bundled from the cold, stood in her aging warehouse at the Capital City Market surrounded by Washington souvenirs and FBI T-shirts, wishing she had a better heating system.

Under a bill that received preliminary approval by the D.C. Council Tuesday, she could soon have that and more.

The bill, introduced by outgoing Ward 5 Council Member Vincent Orange, calls for a $1.2 billion redevelopment of the market, which is between New York Avenue and Gallaudet University on Sixth Street in Northeast. It would add more than 1,500 residential units, a YMCA and possibly a movie theater, bowling alley and skating rink, Orange said, and existing merchants would be offered the chance to invest in the project.

Shortly after noon Thursday, the market was a hotbed of activity, with trucks pulling in and out. It was created when the federal government moved the market from its original location outside the U.S. Capitol to create the National Mall.

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The redevelopment plan has caused conflict among some merchants.

Paul Pascal, a lawyer who represents about 70 merchants in the market, said condensing them into a new development is not possible and could eventually lead to their displacement.

“That site cannot be replicated anywhere in the region,” Pascal said Thursday. “If the market wasn’t there, [the developer would] be going in many directions to be able to get what they need. They’d be going as far out as Jessup or even Baltimore.”

Outgoing Ward 6 Council Member Sharon Ambrose attempted to hold up the bill, and incoming Ward 6 Council Member Tommy Wells said enough time has not been allowed to fully study the bill’s repercussions.

Sang Oh Choi, who bought a warehouse in the area in 2002 and is one of the area’s largest landowners, has been pushing for the Council’s support of the project, as have his sons, Nae and Jae. Choi and his family contributed $8,000 to Orange’s failed campaign for mayor. He also contributed $500 to the campaign for incoming Council Member Harry “Tommy” Thomas Jr.

Orange and Thomas said the contributions are not related to their support for the project, adding that they have received support from people who oppose the deal. Orange and Thomas argue that the market, which would become known as “New Town” after redevelopment, is blighted and needs an overhaul.

“A lot of people don’t realize that this is a lifeline of tourism right here,” Thomas said. “It’s an international community here. We have no connection to it as a city.”

The Council plans a second reading of the bill during its Dec. 19 meeting.

cmabeus@dcexaminer.com