The District of Columbia announced today an agreement with Roadside Development to help finance the O Street Market, a mixed-use development that will likely be the showpiece for a revitalized Shaw. The deal will provide a $35 million tax increment financing (TIF) package to help developers bridge a financial gap and achieve the $260 million needed for the project. The current market, built in 1881 and now a crumbling memento of the neighborhood's failure to attract the investment, has sat vacant for years, but will now be transformed into a mixed-use anchor that will include 630 residential units, 80-100 of which will be affordable, senior housing units, a 200-room hotel, a 560-space parking garage and 87,000 s.f. of retail that maintains the historic facade. Giant will replace its 28-year-old Giant grocery store with CityMarket, a 71,000 s.f. store that will be the largest supermarket in DC and the largest Giant store in the chain.
Under the new financing agreement, the District's contribution will support bond issuance to cover a portion of initial construction costs and the developer will repay the bonds with part of the new tax revenue generated by the project. If the DC council passes the pending financing package at their July 15th meeting, construction will begin in a year. "This is what we need, it is what we deserve, it is long overdue, but now on its way," Mayor Adrian Fenty told a cheering crowd of Shaw residents at this afternoon's press conference.
"This is a big day for us, I would like to see the O Street Market get the same kind of attention and expediency that we saw at Eastern Market, so it's exciting. It is a project that has something for everyone, community benefits - affordable housing, senior housing, parking - it really has the support of the entire community. It was just frustrating to see it go through so many hurdles to get to where it is now," Cary Silverman, DC Council, Ward 2 Candidate told DCMud.
Roadside originally slated the market for renovations to accommodate new retail space, but heavy snow brought the roof down both on their plans and the building itself in February of 2003. Since then Roadside formulated a $250 million revised plan to not only bring the historic market back to its original splendor but to fill four acres of land between 9th, 7th, P and O Streets, NW with residential and commercial space.
In August 2007, the Historic Preservation Review Board approved revitalization of the site and the Mayor's agent for historic preservation ok'd partial demolition because of the development's special merit, leaving the Zoning Commission as the only entity standing between Shaw residents and their commerce. But a lack of agreement between Zoning and the developers led to three months of hearings; an October 15th meeting ended with Zoning's complaints about the 110-ft. building height and they sent the project back to the design phase again on November 19th. The Zoning Commission approved the project for "set down" at the December 10th meeting, and gave it final approval on May 12th.
Developers eliminated the residential space planned for the top two floors and deleted 100 parking spaces and 20 affordable units from the scheme to reduce construction costs and compensate for the loss of potential income.
In addition to a brand new grocery store, other project benefits include $255,000 worth of charitable contributions to Shaw organizations, a shuttle to operating Giant stores during construction, 400 construction jobs, 400 permanent jobs, and the reconnection of 8th street to increase pedestrian activity in the area.