Thursday, June 18, 2009

Shovel-Ready for 2010: CityCenter?


With the economy slowing real estate development (just a touch), developers are finding themselves on the defensive about projects in the planning stage. A skeptical public might think it a case of protesting too much, but promoters seem compelled to assuage public doubt while struggling to convince once-bitten investors. Case in point, the rumor mill was rife recently with reports that Archstone and Hines Interests’ redevelopment of the old Convention Center - the important and hugely visible CityCenter – was being taken off the table. Not so, says Ken Miller, a Senior Vice President at Archstone. In fact, despite issues with financing and retail partnering, according to Miller, DC might just be seeing the project sooner than cynics expect.

"We are within a year of breaking ground," said Miller. "We are continuously meeting and speaking with retailers that expressed interest."

And yet the project has missed several projected groundbreakings since the developers' first estimate of a groundbreaking by last January, and despite numerous assurances that the delay isn't affecting retail interest in CityCenter, no major retailers have been announced. The multi-phase, mixed-use development will commandeer 10-acres of vacant downtown property to eventually realize 400,000 square feet of retail space, more than a million square feet of office space, 670 residential units and a 400-room “high-end” hotel with its own 100,000 square foot retail plaza, under a 99 year lease from the city. It may sound a little on the ambitious side, but Archstone claims they have more than enough time – and resources – to see it through.

"At this point in time, we still have months to complete our construction documents and get our final permits and entitlements. We’re busy meeting with potential investors and banks that have expressed interest,” said Miller. “By year’s end, even though we’re in a challenging state with capital markets, we’ll be able to get the financing lined up and be able to break ground.”

The last time DCmud reported on the status of CityCenter last September, a Hines representative relayed that the project was “85% ready to go” and that the development team would seek a general contractor “in the next few weeks.” Though neither has yet transpired, there was recently one sign that wheels are again turning after a dour Spring; on April 28th, the development team met with potential contractors at a pre-bid "requirement conference."

The District Government swapped land in 2007 with Kingdon Gould, who gave up land on the site of the future Convention Center Marriott to get the northeast parcel of CityCenter from the District government (labeled 'District Parcel' in the rendering). Gould will be developing his land separately, but has also not committed in time or in scope, nor has the much discussed Convention Center Marriott broken ground yet.

10 comments:

SK said...

This project and the Convention Center hotel should be the city's top development priorities and should not be delayed even a single day. DC is going to continue to lose conventions and revenue to other cities or the Gaylord property across the river if we don't hurry up and get the hotel rooms, restaurants and shopping downtown that convention visitors expect. Hurry!!

Anonymous said...

Not to nitpick but Gaylord is on the same side of the river.

beyonddc on Jun 19, 2009, 1:33:00 PM said...

Anacostia River.

Anonymous said...

It would be easier to read "I Street" if you would spell it the way locals have done for years: Eye.

Anonymous said...

It would be easier if you would "shut up".

Anonymous said...

But I'm not speaking, I'm typing. And any real Washingtonian knows to spell it Eye street, just as you would spell it Que street. Not a happy camper, are ye?

Anonymous said...

This is an open forum for comments so I guess you can say whatever you like but some of the last comments are completely irrelevant and rather rude. This is a great site for development updates. I always read the comments because they sometimes provide more details. Was hoping to see more for this piece.

Rajesh on Jun 22, 2009, 2:28:00 AM said...

City Center is realy a great project.
Boise real estate

Anonymous said...

I just hope that Archstone does a better job with the architecture than they did at Wisconsin Place in Friendship Heights. If they try to shove that stuff down our throats again, the project will be doomed...

Tripster said...

The key phrase is "challenging state of capital markets." With capital investors expecting a 25% three-year IRR and banks uninterested or unable to finance a project more than 50% LTV, the numbers just don't work. Until banks can provide higher leverage for capital investors, there's no project in the city that will move forward, whether it's "high profile" or not.

 

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