Walnut Street Development Sells Mt. Vernon Site

Walnut Street Development (WSD) will be selling its Eye Street Lofts project; the sale is apparently imminent. WSD had been planning approximately 160 residential units and 4,000 s.f. of retail space for their land at 443-459 Eye Street, NW, since it purchased the land in 2004. The Mt. Vernon Triangle project had been planned originally as a condominium, to break ground in 2007, but market changes forced a shift to a planned rental building, construction had not yet begun. The purchaser is not presently being identified.

The site, a large project in its own right, is enhanced because of the adjacent District-owned property, the hotly pursued District 5th and I site for which four developers are vying. According to Jared Jablonka at WSD, the developer submitted a proposal for the 5th and I site, but withdrew when another developer made an offer on the Eye Street Lofts' parcel. Speculation points to JBG as the purchaser, though WSD would not comment on the terms of sale or identity of the purchaser.

"We had a pretty good plan, but then we got an offer from another developer to buy the land. We wanted to develop it ourselves because it would have been an exciting project, but we received an attractive offer," Jablonka said.

He added that WSD had delayed groundbreaking because they hoped to win the 5th and I site. "We had held off because the announcement of a developer for the adjacent piece of land (5th the and I) was delayed. We wanted to incorporate that site into our project, that was the idea, but then we got the offer to sell the site and it was hard to turn down. We are now under contract."

WSD's original $55 million multi-use project would have been a renovation of two 1880's row houses and other industrial buildings into an approximately 12-story structure with over 15,000 s.f. of community-serving retail space.

WSD's plans have been in the works since 2005 and have since faced several obstacles because of the historic nature of the buildings on site that include the Central Auto Works garage, a historically-designated structure. Architects HOK Group decided to incorporate the entire garage into the new edifice by piercing columns through the building and creating footings beneath the garage to support the new construction. The development would have also included the two existing row houses as well as a historic blacksmith shop.

According to the Deputy Mayor's Office, the four remaining developers - JBG, Buccini/Pollin, Potomac Investment Properties, and a group comprised of Holland Development, Donohoe Development, Spectrum Management, and Harris Development had all submitted satisfactory bids, but had subsequently been asked to submit a further "best and final" offer by this Friday to remain in consideration.