Thursday, December 04, 2008

DC Offers $10 Million to New Retail Development



Mayor Adrian Fenty joined Ward 8 Councilmember Marion Barry today to announce that the District of Columbia has granted a total of $10 million worth of tax increment financing (TIF) to three retail-centric real estate projects currently in the pipeline: City Interests, LLC's South Capitol Street SW residential/retail hybrid, Four Points, LLC and W Street Acquisitions' development on Martin Luther King, Jr. Avenue, and the Neighborhood Development Corporation's Heights on Georgia Avenue. According to the Mayor, it’s a calculated move designed to stop Washington DC's loss of retail revenue to suburban shopping outlets.

“Essentially, this is way to make sure that you use additional revenue to help the private sector bridge the gap to where they see great and exciting new projects, but where there may not be right now the right level of financial equity to make the projects happen,” said Fenty. “The District, as everybody knows, loses tons of money to the suburbs every year…If we don’t have economic development right here in the neighborhoods of Ward 8, people will then just take their tax dollars to Maryland. It’s a cyclical problem.”

The first project on the docket is also the largest. City Interests’ development at 4001-4035 South Capitol Street SW – currently a strip mall and the site of today’s press conference – will receive the bulk of the TIF funds announced for a grand total of $8.8 million. Once completed, the project will contain 200 units of housing, 47,000 square feet of retail and 15,000 square foot grocer or pharmacy in the forgotten portion of southwest - a small strip of land just south of Bolling Air Force Base. Construction is planned to begin in late 2009.

The Four Points project on the 2200 block of Martin Luther King, Jr. Avenue SE will receive $1.1 million from the TIF program to supplement its $5.2 million budget. The mixed-use project will bring 11,000 square feet of retail and a “soul jazz cafĂ©” to the site – numbers regarding the housing component have yet to be disclosed. Construction is also projected to begin sometime in 2009.

The last project announced – and only non-Ward 8 development named – was the Neighborhood Development Company’s The Heights on Georgia Avenue. Located at 3232 Georgia Avenue NW, the $25 million project will receive $742,000 in TIF credits. With 10,000 square feet of retail (possibly to include a hardware store and sit-down restaurant) and 70 residential units, NDC hopes to start building late next year.

These three projects are merely the first recognized projects under the District’s Neighborhood Retail TIF program. Earlier this year, Fenty announced that the District - in conjunction with the Great Streets Initiative - would offer a total of $95 million in financing to local developments with a strong retail component. The Office of the Deputy Mayor for Planning and Economic Development (ODMPED) will continue to accept applications for funds on “a rolling basis. ODMPED's Project Manager, Derrick Woody, said recipients are judged on a “long list of criteria” that includes “the composition of the development team, the level and amount of retail,” and a 5,000 square foot minimum in order for projects to be considered. Metropole

3 comments:

Anonymous said...

Very smart. It's not unlike what they're doing in other states to attract companies by offering state financing and tax abatements. He is right that it is a cycle- a modest investment now will pay itself back and then some.

Brandon on Dec 5, 2008, 12:23:00 PM said...

It is smart. DC loses out to VA and MD on tax revenue for a lot of big-ticket items

Den on Dec 11, 2008, 9:53:00 PM said...

I am curious where the Fort Totten area project stands? This area is so starved for resources that Peapod must be making a killing! As far as I'm aware, the Food Bank is the only project in the forseeable future. Though much needed for the city as a whole, it does little to provide for the surrounding neighborhood.

 

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