Friday, September 10, 2010

District Releases Hurt Home to Developers At Fire Sale Price


Roughly two months ago, the DC City Council voted to release several District properties for redevelopment, but the most noticeable deal in the large release is the transaction that enables Argos Group, in partnership with Potomac Investment Properties Inc., to scoop up the historic Hurt Home mansion at 3050 R St. NW, a "contributing" building in the Georgetown Historic District, for $450,000. The deal is pending, and Jose Sousa of DMPED cautions that "[t]hese numbers are not yet final." But Sousa and Argos Principal Gilberto Cárdenas estimate that all the minor details will be chiseled out in the next couple weeks. Cárdenas has plans to redevelop the former assisted living facility for the blind, and more recently the Devereux Children’s Center for foster children, into a 15-unit luxury condominium. This isn't Argos's first effort at acquiring and transforming a vacant, District-owned, historic property into high-end condos: the development group broke ground on the renovation of the Northeast's historic Firehouse No. 10 and Police Station No. 9 earlier this summer.

Argos has again contracted familiar partners Sorg Architects for the design work, and developers are leaning towards bringing in another interior design specialist to assist with some of the remodeling work. Three poorly executed wood additions will be stripped from the back of the original brick exterior, while the interior will be almost entirely gutted and rebuilt, walls, stairs, mechanicals, and all. The facade of the building will be improved and restored to its original historic charm, accented by giant two story front windows and an entrance stoop railed with hefty white columns. When finished the condos will be a spacious 1200-1700 s.f., each with two to three bedrooms and loft space. Given that the property was put mostly to philanthropic uses over the course of its long history, developers have agreed to offer three of the units at affordable rates and reserve them for blind citizens. Designers plan to link up with the American Council for the Blind to methodically outfit the units to meet the domestic daily needs of those living without sight. The back lot will be extensively landscaped, and a 30 car parking lot will be installed. Developers say there is a strong chance several Zip Car spaces will be included.

Sorg already oversaw the G-town Post Office Renovation
After the City Council meeting in July, Councilman David Catania seemed unsure of the decision: WBJ quoted Catania wondering why they'd "sell a property for $450,000 that’s worth $6.1 million," and asking, "Why not bid that out just to make sure we have the best reimbursement for the taxpayers?” But although at least five or six developers toured the property following the District's Request for Expressions of Interest (RFEI) last summer, Mr. Cárdenas and his partners were the only ones to go forward with an offer, and negotiations went from there. Initial plans called for an addition to the building and as many as 41 units, with the building being offered for more than $1.5 million. But it quickly became clear that community organizations, Zoning Commission, and the Historic Preservation Review Board would combine forces to put a quick stop to a proposal of such proportions, and so the number of units, with some back and forth community dialogue, was slowly reduced to 15.

Cárdenas reckons that other developers were reticent to get involved with the sometimes stubborn and often vocal Georgetown community. "They're a community that knows what they want, are well organized, and have the resources to force compromise," says Cárdenas, "but we came into this project with nothing but a positive attitude, good intentions, and willingness to compromise." Jose Sousa confirmed this, saying: "The development team worked in concert with the surrounding neighbors to address many of the concerns raised regarding parking and unit counts." Although the vetting process has already started, developers don't expect the receive final Zoning and HPRB approval for approximately a year. If all goes smoothly, construction will begin shortly thereafter.

Washington D.C. Real Estate Development News

7 comments:

Anonymous said...

RE: the affordable housing discussion pertaining to another article in this issue, the story about the a Georgetown property owned by DC and being sold to a private developer for market rate housing should annoy the heck out of a lot of people in Wards 7 &8 who feel affordable housing is "dumped" there. Here the city could have put A/H in GEORGETOWN where currently there is NONE, but instead, the city chose to SELL the property and build more A/H in Northeast. People should be REALLY pissed off about this!

Anonymous said...

Why does everyone have to insist that THEIR ward gets so much affordable housing and the rest of the city gets none. It goes in everywhere, people. The IZ laws require it, the city demands more of it when a developer seeks approval for a big project, the city and feds subsidize the hell out of it in 10 different ways, non-profits build it whenever they can, and developers turn to it so they can get federal and city dollars when they can't otherwise sell enough product. Govt. subsidized housing is all around us, and wherever you are, there is some close to you, and you are paying heavily for it.

Anonymous said...

Apparently it does not go into places like G'town. and to the very first anon of this post: It's not a damn joke. If a mass amount of A/H was dumped in your ward you'd be pissed too, so your sarcastic bs comment is not needed nor necessary.

Outraged said...

Word to the City Council -- this is a bad deal. The fact that there was only one bidder, who offerred $450,000, doesn't mean that this is the true value of the property. It means that the Deputy Mayor chose to dump property that is more than an ACRE in Georgetown, a few blocks from the Social Safeway and across the street from Dumbarton Oaks, in the middle of a recession, during the depth of the summer, at the bottom of the market, and when most credible developers were already wary of dealing with the Fenty administration, given the debacles at Tenley, Poplar Point, Hill East, Park Morton and Southwest Waterfront.

This is a travesty! Catania asked the right question, but got the wrong answer. It is not that only one entity is interested and capable and therefore the city should go ahead with the sale. The answer is that the city should not go forward at this point. The market is starting to come back, esp. here. A full year has passed since this was offerred for bids. If the RFP were released again, you would probably get much more competition, now that lenders are lending again, though it would make more sense to treat this as the incredibly valuable asset it is, wait a bit more and do more homework on the preservation and zoning issues.

Also, it is not true that the Zoning Commission and the HPRB torpedoed the idea of an addition. It was the Fenty administration's choice not to do anything to raise the ire of their loyal voters, the good citizens of Ward 3.

Even on the face of it, with no addition, this deal makes no sense. Fifteen luxury condos, 1200 - 1700 sf each, in Georgetown, no cost for underground or structured parking, and the best the developer can do is $450,000? Even assuming that a 2 or 3 bedroom condo would ONLY sell for $500,000 in that incredible location, that would be a $7 million dollar profit, less the construction costs. Thank you Fenty administration for squandering DC's real estate assets, all in the name of action! (Ready, fire, aim!)

Anonymous said...

Yep, big giveaway in Georgetown. The bill (PR18-0955) was sponsored by Vince Gray, what a surprise that he would give away a property to a likely donor in an election year. If he's so busy railing about the budget why didn't he ask for market value?

Anonymous said...

Anonymous at 8:06 pm

If you review you two resolutions, the surplus declaration resolution (http://www.dccouncil.washington.dc.us/images/00001/20100617140227.pdf) and the disposition resolution (http://www.dccouncil.washington.dc.us/images/00001/20100617140357.pdf), you would see that they were both introduced by Chairman Vincent C. Gray at the request of the Mayor. That is simply the process by which the executive branch has its proposed legislation introduced in the Council.

This is an action requested by the Mayor and the Deputy Mayor for Planning and Economic Development, and not, as you described, an action sponsored by Vince Gray. Each of the records for these two resolutions clearly notes that it is “At the Request of the Mayor. This clearly falls into the mayoral giveaway column.

Anonymous said...

DC should have released that property to me but if they have $10 Million to settle years of abuses, lies and media, I will not care, I will be gone full of pockets. This is not 1010 N capitol church, it is a G-town possible settlement but I have nobody to fight for me. Warning, with them, you will never know the truth, just need a temporary place to excel and move to my next post. But who will pay for the loss in time, money, suffering, insults, undervaluation,.... Then, it was supposed to be p/t ownership with no interference to my career plan and goal (outdoor cult cause is Fenty cause, I like money & ownership)
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