Industry Insight: Ali Honarkar

Ali Honarkar, an architect and condominium developer, has been a forceful voice for modern architecture in Washington DC. Ali sat down with DCMud to speak about his projects, the state of architecture, design and, of course, shoe design.

DCMud: Tell us about Division 1

AH: Division 1 was something that me and my partner, Mustafa, started, at UMD, back when we were undergrads, it started as a side job, turned into what it is now. At the time we wanted to have something cutting edge. We were at a very conservative university, kind of the same thing we are doing now professionally, we came together we figured it was better to stick together. We started in '94, doing a lot of interior spaces and restaurants, which is the best way to get your work out there. We always wanted to get more into the residential market. It took us 6, 7 years to do that, but after doing a bunch of restaurants we were able to establish ourselves to get some of the larger, better projects.

DCMud: And you did Lima…

AH: Yeah, We’re not doing too many restaurants now. We did some of the more upscale Charlie Chiang's, which is now called Charlie Chiang’s Ping, one is in Shirlington, opened about a year ago, we do about one restaurant a year – by choice. We also did 18th St lounge, Dragonfly, Local 16.

DCMud: Who or what was your inspiration to become an architect?

AH: My family has been in construction for hundreds of years so…

DCMud: Hundreds?

AH: Yeah, back in Iran, where I’m originally from, about 300 years, so its in my blood. The rest of my family went into medicine, I stuck with it. Some of my influence, still, is Thom Mayne, who was an architect from the west coast, with Morphosis. An Austrian firm called coop-Himmelblau, some of the influences in the late 80’s, 90's, when I was in school. What they did - it was at the same time as grunge, it was part of a whole movement, everything was related: art, music, architecture.

DCMud: Why choose DC?

AH: My family moved here, after the revolution. You know, why not DC? I was just having a discussion with another architect, locally, who wasn’t really fond of what we do, in DC.
We’ve always been known have to fight for our clients, for our principals, you know, whether its historic preservation, ANC, etc. We don’t pick a fight, we just feel like there should more be diversity. People always want to label things, ‘this is historic,’ but across the street it's not historic. I think its because we’re such a young nation, we only have a couple hundred years of history. I come from somewhere where there’s thousands of years of history. So the question was asked, ‘why do you have to change DC? Why don’t you go somewhere else?” My answer was, we wanted change. We elected Obama for change, we didn’t ask him to go to another country; change needs to happen here. And we’re not alone, I think DC has great potential. There were a lot of things done, not in a good way, that people label as ‘modern.’ I think people, when they don’t understand, and they see glass, they think, modern architecture, and all architects have to take the blame for that. I like putting our own spin on the city.

DCMud: How do you label yourself?

AH: True modernist. I don’t pull into a colonial house - I live in the house I designed. It’s a whole lifestyle. Modern is being always on the cutting edge of what’s going on. In DC we are more traditionalist. I have no problem with preservation – its great – but you take a lot, and put something that belonged 200 years ago, that’s what I have an issue with. The thing with traditionalists, they always forget, everything was modern at one time, and it takes time for that to mature, like good wine. When the Victorian era came up, it was a departure, and now it’s protected. You’re starting to see things, not even as far back as Frank Lloyd Wright, 50s, 60s, getting historic.

DCMud: Any favorite buildings in DC?

AH: My favorite is the original German embassy, built in, I think 1964, that’s my favorite in DC

DCMud: With the exterior skeleton?

AH: Exactly. Imagine, that was 1964, that’s by far my favorite in DC.

DCMud: Tell us about some of your projects – you're working on the Lacey Condominiums right now.

AH: Yeah, the Lacey was a great opportunity for us, the client found us from our house around the corner, the W Street residence we did. It’s the largest ground-up building we’ve done. We’ve done a full city block in Silver Spring, with a lot of renovation, but this was the first ground-up. The design, inspiration comes from the client. The history that place has, being right next to the Florida Avenue Grill – the parking lot for the Grill. That started in 1944, just the idea of an African American business in 1944, it was so progressive thinking, we wanted a tribute to Lacey Wilson Sr., and Junior, who bought the place from his dad. It doesn’t mimic anything around it, its not contextual, but we found the best way to pay tribute in the same spirit of what he did in 1944, for us to do in 2009, yeah, we wanted to do something that honored that. We need to be able to educate the developer, its okay to do a little more, it will come back to you. We feel that everyone that’s bought there, they’re paying for it because of the design. We designed in some social issues there – you want the neighbors to be able to engage each other, you don’t just walk in to a long corridor, and go into your own space, and never see anybody. This forces people to know each other – the atrium spaces, the common spaces.

DCMud: So its all about the Social Element.

AH: Yeah, absolutely, you engage with your neighbors. Its not for everybody, more of a European feel to it, where people can come right outside and be able to socialize. I think that’s what we do – outdoor spaces push that idea.

DCMud: Tell me how exterior came about.

AH: It looks like a simple building but there’s a lot more to it. A lot of people use zoning and height restrictions as a way of limiting themselves. We went the other way. We looked at all the guidelines, what could or couldn’t be done, we maxed out everything. I hear that a lot, ‘we had to max out the area, so we couldn’t do much with it.’ We made a lot of double story spaces; that was the idea behind having indoor-outdoor spaces coexisting. The exteriors stairs, we made that into part of the design element; you need the two forms of egress, but it became for us the design showcase, it becomes this whole volume of its own and brings a different dimension to the building.

DCMud: Lacey has gotten attention inside DC, but also outside DC. What do you attribute that to?

AH: Yeah, I don’t know! (laughs). We designed it to get attention, that’s what you do. We’re not going to write a hit song and apologize, you want it to be played. Actually we’re getting more national than local attention. I’m a little disappointed with the local media, and I think it may be driven by sponsors, this very conservative southern town. You would think the Washington Post, as local media, should know what’s going on around here. We’ve seen the Lacey in New York blogs, LA blogs, and architecture blogs, and I’m always amazed how they find us. But they don’t have to find you here, we’re here, they should know what’s in their back yard. I‘m a little disappointed, not with smaller magazines, but the Washington Post spends so much time covering other things, they should cover more locally.

DCMud: Thinking about next projects, do you have anything new coming up?

AH: We have some commercial projects, one of the projects I’m very excited about is that we’re doing a single-family in Dupont, a great client that really wanted to do green, but for all the right reasons, not cashbacks, but to do the right thing. They’re not even going to live there, it will be a rental initially. We were very excited by that, it’s a small project, but its already been approved by historic preservation. We’ve gotten to learn so much more about alternative heating, cooling, really incorporates everything into 2000 square feet of space. And we have an office building that’s ready for completion in about 4 or 5 months, very exciting, in Silver Spring, its been about 7 years in the works. Its a complicated design, there were a lot of major modifications, to the point that the county didn’t understand it anymore, they just said, ‘alright, just do it.’ We have an existing shell that we’re keeping, and putting a whole new modern building in it. We also have the Drost, a 4 unit condo building, we’re hoping to start in the spring, we’ll see.

DCMud: If you had an ideal client right now, who would that be, what would they be building?

AH: I’m probably more interested in designing a shoe right now (laughs), that would be the ideal thing, to do something different, we consider ourselves designers not just architects.

DCMud: A shoe?

AH: A different design challenge.

DCMud: I didn’t expect that answer.

AH: I’m being honest, I’d love to do something along that line.

DCMud: So green is not cheap, design is not cheap, how do you combine those two goods, and still make it affordable?

AH: Its hard, there are metropolitan cities, like NY would be the first, Chicago, San Francisco, LA, they have that. You put up a building anywhere in New York, they will still line up if its good. I think the DC culture, within the last 10 years has really changed, you see a lot more emphasis, not just on housing, but the restaurants, you see a lot more design, restaurants, bars, we’re getting there slowly but surely. We’re not very good at that, we just do it. There were so many ways to make the Lacy cheaper. But at the end of the day, the architect, the developer, have to be able to look back and be okay with it. The average life of a building is 25-30 years, we’d like to see the building there in a 100 years. Real estate is a long-term thing; we don’t do things for marketing purposes. With the whole green movement, nobody ever uses bad materials on purpose. Another way the AIA is using – you know when the record companies stopped using vinyl because it was no good – the same with the AIA, we achieved it in the Lacey, we’re doing it in a small residential project, you put a good project out there, people will follow.

DCMud: Any other architect out there in DC you really like?

AH: There are two guys are doing some great things, I guess they’re not really local. Sure, there are a lot of good architects here, many great single family residential architects. But I look to somebody like Jonathan Segal, Sebastian Mariscal, both San Diego architects, they inspire me. About 10 years ago he started, these guys also develop, so they practice what they preach. Its easy to design a $4m house, there’s not much risk. When you play with your own money, there's so much more risk. Developers are risk takers, when somebody has the guts to do that, its not just a business. If you put your name on it and try to sell it, that’s a whole new level.

DCMud: There aren’t a lot of architect-developers in DC.

AH: The way we look at ourselves, its not just the business, there are a lot of people that practice the business of architecture, but its different when you own it.

DCMud: No one local that you like?

AH: [Bill] Bonstra does some good work, but, some I don’t like. Take the Lincoln Condominiums in my neighborhood. Its brutal; it’s a big, stucco building, it represents nothing. I would rather stand for something. As an architect, you’re not sworn in, but you’ve got to give back to the community. I think Eric Colbert designed that, I wouldn’t have. Just don’t take the project. If you do and that's what you deliver, then you have to admit you’re in the business of architecture. You could be making shirts at that point. We get clients that come in and want to do certain things, and sometimes you just say ‘no thank you’, that’s not what we do. You can’t take every project. Especially at that scale – 10, 12 story buildings. You’re taking a big chunk of the block. It’s a crime to not care what you do, when it has such an effect on the city.

DCMud: What do you see as the future of architecture in DC?

AH: I’m always hopeful. When I was going to school there was not a lot of things you could walk up to and see; if you liked modern, you had to go to another city. But with the good, comes the bad, but I’d still take that, the diversity. Its art, you put it out there, its art, you just put it out there and let people decide.

DCMud: How do you compare DC regionally?

Well if you compare us to Wilmington, Delaware, we’re good. New York, well, there’s only one New York. But I’m hopeful. There are a lot of restrictions in DC. What upsets me is that we lose a lot of our talent, because there’s so many restrictions in DC. Some good talent starts here, then move to the west coast, or New York, so we’re pushing a lot of our talent out.

DCMud: Height restrictions and historic preservation?

AH: It’s partly that, but, no offense to attorneys, you do any work in DC, forget the ANC and historic preservation, but every other neighbor is an attorney. Its great to have pride in where you live, but people feel like they get to claim it, we see that all the time, we always feel like we don’t want to deal with it any more, but then we get a good client, who wants to do something different, and we say, okay, lets do this again. Its not historic preservation, I think its more the people in the neighborhoods that want to stop the process.

DCMud: Do you think the height limits are a good thing?

AH: I like them; I think you are most creative when you are challenged. DC is my favorite city, and you have New York for that. London, Paris, the scale is completely different, most European cities are like that. I like the height restriction where it is, we should just be a little more creative. We have suburbs to balance stuff out.

DCMud: Speaking of the process in DC, how would you change it if you could?

AH: If you go through third party review, it still has to go through DCRA at some point, it’s a little frustrating. I don’t see what the point is. Zoning, public space, transportation, should go through DCRA. But as far as electrical, mechanical and plumbing, I don’t see why it has to go back through the city. Third party review should be quicker, the process is very time consuming.

Empty Southeast DC Project Hangs on Longer

The Merion Group, the new owners of 1705-1729 East Capitol St., SE, have asked for a permit to raze the building, the first sign of movement on the eyesores across from Eastern Senior High School near RFK Stadium. The raze permit, filed under the name PYD I LLC, comes after a March 2009 approval by the DC Zoning Commission, which had approved development plans filed Comstock East Capitol LLC in December of 2007. The 2009 approval allowed for modifications by the new owner. Kennedy Place, as the new condos will be called, now has an extension until 2011, when the revised PUD expires.

The site is currently a vacant, 80-unit apartment building (pictured) on East Capitol Street, SE, between 17th and 18th Streets. The 42,629-s.f. plot is just blocks from the Stadium-Amory Metro. The Merion website describes the project as "a redevelopment effort which will create new condominiums in a gentrifying area of Capitol Hill." The ANC must be pleased to hear about their neighborhood finally gentrifying.

In December 2007 Comstock received approval for a consolidated PUD and zoning change from R-4 to R-5B, allowing construction of a 133-unit building. In that same month, Merion acquired the property for $6.2 million from Comstock, which paid $9 million in 2006. Merion Chairman Bill Bensten was formerly a senior executive at Comstock.

In September of 2008, PGN Architects, the project architects throughout the toss up, filed on behalf of the owners for a minor modification to the original PUD, changing the total units from 133 to 141. In January 2009 the counsel for Merion requested a one-year extension to December 2010 in addition to the earlier modification request.

Though the original plan had been to immediately begin construction, as financing realities were pouring cold water on new construction, developers added more one and two bedroom units to the mix, requiring interior changes to the architecture, further slowing the project. The change was intended to increase marketability.

The approved zoning changes and plan modifications give the developers until December of 2010 to file a building permit, and December of 2011 to begin construction. Beyond that, developers would need to start anew.

GSA Selects St. Elizabeths Team, Groundbreaking to Start

After years of planning and community outreach, the General Services Administration (GSA) has selected a development team and is mere weeks away from breaking ground at St. Elizabeths. In one of the largest construction contracts given in DC, GSA awarded the $435 million contract to Clark Construction, WDG Architecture and HOK to build the Coast Guard headquarters.

The three won out over a field of competitors including Hensel Phelps Construction with Shalom Baranes Associates, and Turner Construction with SOM. The GSA is using funding from the FY 2009 Appropriations and the American Recovery and Reinvestment Act ("Recovery Act") of 2009 to fund the project.

The Coast Guard campus will be the first of 3 phases at the historic hospital. Phase 2 is the center building which will house the Department of Homeland Security Secretary's office as well as other senior administrative staff. Phase 3 will be largely new construction for storage and other similar warehouse facilities. According to Mike McGill, spokesman for the National Capital Region at GSA, groundbreaking and site preparation for the CG facility will begin in September. Actual construction will likely begin in the new year, pending final approval from the National Capital Planning Commission (NCPC). In January 2009 the NCPC approved the final master plan with a few "notes" or contingencies.

First, the GSA has to gain approval to build a west access road connecting Firth Sterling Avenue, SE to the modified Malcom X Ave/SE I-295 interchange through the Shepherd Parkway, which belongs to the National Park Service. The U.S. Department of Transportation (DOT) determined that the planned access road is the only feasible option, so GSA is working with the National Park Service to minimize negative impacts on Shepherd Highway.

Second, the GSA is working with the D.C. State Historic Preservation Officer (SHPO), the Advisory Council on Historic Preservation (ACHP), the National Trust for Historic Preservation, the Commission of Fine Arts and other "consulting parties, to determine whether the historic cemetery should fall inside or outside the security perimeter

According to Lisa MacSpadden, Director of Public Affairs at the NCPC, "any development with regards to the Coast Guard facility would be contingent on the items outlined in the commission action" from January 2009. The Coast Guard facility will be erected mostly on the federally-owned West Campus, and partly on the DC-owned East Campus- a compromise resulting from the 1987 land transfer that ceded teh East Campus to the District. At present, the Office of Planning is proceeding independently with their plan for 2 million square feet of private sector, mixed-use development south of the Coast Guard site. St. Elizabeths was the first national mental health care facility in the country.

Images provided courtesy of the National Capital Planning Commission as submitted by GSA for the project’s concept review.

Tenleytown Gets Retail Improvements

Tenleytown is getting upgraded, a bit. Two new projects near the Metro will breathe some freshness into the retail scene in the neighborhood that has seen little new development and lost its library.

The first is a small lot, but above the Metro, and anything that adds retail to the under-served Tenleytown neighborhood gets noticed. The formerly vacant site above the Tenleytown metro entrance, hitherto a loitering spot of choice for American University and Wilson High students, has been fenced off in preparation for construction of a one-story, 3600 s.f. building, with a "decorative cupola" that will serve retail. Keystone Development, representatives of the property owner Circle Management, have begun work on the site but have not yet scored a retail client. Circle Management owned Tenley's Outer Circle theater, before it was demolished. Keystone has hired K3 Construction Group to build the structure. According to K3 representative Kathy McCormick, the site will be "very challenging" work for its proximity to the metro entrance and tunnel, a process that requires WMATA to sign off.

Down the street, Safeway, Inc. is finalizing plans to renovate the Tenleytown Safeway at the corner of Davenport Street and Wisconsin Avenue.   The building, with its back to busy Wisconsin Avenue is often overlooked by passersby and is long overdue for a facelift. According, to Craig Muckle, a spokesperson for Safeway, the company is working with the community to get input and make sure interested parties have a say in the design process. The plans should be finalized by mid-September.

Renovation of the Safeway will not start until the Georgetown Safeway, which started renovation work several months ago, is completed, to avoid closing two nearby stores simultaneously. The Georgetown store is on schedule for completion in March of 2010. Muckle was unwilling to share other details of the project, saying that it would be "unfair" to spoil the surprise. Renovation and design will be overseen by Torti Gallas. The new designs will incorporate Safeway's "lifestyle" branding - the grocer's move to incorporate urban design principles into their stores by improving pedestrian friendliness and adding more diverse retail into the shopping experience.

Washington DC retail development news

Streetcars on H Street

If you were in the H St NE area today, you might have run into a bit of a snag. District Department of Transportation (DDOT) announced in a traffic advisory that construction and installation of street car rails continues along H St NE. The construction is part of an ongoing street improvement through the Benning Road/H Street Great Streets Project. DDOT spokesman John Lisle indicated they are proactively laying the tracks in concrete during the road improvement so that DDOT does not have to dig up the road again once the issues surrounding the street car are resolved. Forethought, how refreshing. So, street cars next week?

Not so much. The street car element of the $65 million Great Streets project still has some unresolved conflicts, and the cars still gather dust in the Czech Republic. According to Lisle, there is still no final plan on where the cars will turn around to continue their loop. Also, the city's ban on overhead wires in the downtown area means DDOT will either have to find a way to power the street cars without overhead wires or have the law changed to allow them. Lisle said the Benning Road project is set to continue for two more years and anticipates the street car line will be running from 3rd and H St NE to Benning Rd and Oklahoma Avenue, NE, by 2011. Others are less optimistic about the timeline.

Today's street closures, with more Friday, will allow workers to lay tracks at the intersections. In addition, the eastbound curb lane on H Street, NE between 3rd and 5th Streets will be closed to traffic for the next day. On Friday, the intersection of 7th and H Streets, NE will be closed from 9 am to 5 pm, as well as the eastbound curb lane on H Street between 6th and 8th Streets. Have patience, its in the name of progress.

New Pentagon Auxiliary Underway Will be Biggest, Greenest

Construction is underway on an auxiliary to the Pentagon, a behemoth that will be one of Northern Virginia's largest buildings. Despite the size of the Pentagon, which holds 29,000 workers, many Department of Defense (DoD) employees have had to serve at a series of temporary locations over the years. With the structural steel frame now going up, the mini-Pentagon, the future home of 6,400 DoD personnel, is on track for completion in September 2011. The 1.7 million s.f. building will sit on 16 acres of land in Alexandria and will include two office towers, 15 and 17 stories, two parking garages, one below, one adjacent, and a public transportation center for employees and the surrounding community, all a mere 7 miles down I-395 at Mark Center. To round it out, Duke Realty, the developer and seller of the land, is hoping to exceed expectations and go for LEED Gold certification, which would make it the first LEED Gold government facility anywhere. The 2005 Base Realignment and Closure (BRAC) recommendation for the U.S. Army's Fort Belvoir provided the impetus for the move and construction of a new facility. The BRAC called for the DoD to move 6,400 personnel from their leased space in Northern VA. After an extensive search the Army bought the property at Mark Center from Duke and will incorporate it into Fort Belvoir. 

Peter Sholz, Senior VP of DC Operations for Duke Realty, said Duke secured the project at Mark Center because the location met the stringent requirements needed to house the DoD, and that they offered an appealing "pricing and economics." The Mark Center location provides enough land to allow for a security perimeter (the space was previously an empty lot) and offers proximity to an amenity base, I-395 and, of course, the Pentagon. The design process included input from the developers, project architects HKS and WBA, the Army Corps of Engineers and the City of Alexandria; Clark Construction is the general contractor. Mike Nicolaus, Managing Director of the DC office of HKS, said the City of Alexandria wanted a landmark building for the high-visibility location and the Army Corp of Engineers wanted a structure that was both a high performance work place and somewhere workers could "be proud of." The new DoD home will be fenced with secured access points, meeting setback requirements. The two towers, which will connect on their first 10 floors, will have exteriors of precast concrete and glass, materials that meet federally mandated security standards including blast-resistant glass and preventative measures against "progressive collapse." Asked about design challenges, Nicolaus said "making architecture out of that is a challenge," but added that the building will still have a "higher level of architectural design" than most government buildings. Over 24 different user groups will occupy the space. Currently the floor plans are entirely open, but through the space planning process groups will determine head counts and special needs. The interior of the building will likely use a modular SmartWall system like that of the Pentagon, which allows for flexibility in arranging personnel. Sholz indicated he expects that both Metro and Dash buses will adjust their routes to include a new stop, but a shuttle will run to at least one metro station, as well as to the Pentagon. While the details are still being hammered out, Sholz estimated that employee use of public transit could total $10 million per year in transit subsidies.

Alexandria Virginia commercial real estate news

DC's Newest Monument: Fair Housing?

Ahh, those unforgettable vistas that make Washington DC, Washington DC: the White House, the Lincoln Memorial, the Washington Monument...and the Fair Housing Monument? Yes, if Congresswoman Eleanor Holmes Norton realizes her entreaty to Congress to build a monument to the Fair Housing Act - "the last of the great civil rights acts." "Fair Housing and the movement to bring equal opportunity to the real estate market is intertwined with our nation's history. The federal government has been a part of the problem and an integral part of the solution" said Norton in a press release.

Sure, any DC visitor can tell you there are tributes to wars, presidents, generals and battles, but this appears to be the first memorial by the federal government to, well, itself. If Norton finds support, the battle will still be a long one, with Congress having anticipated frivolous monument building by instituting a bureaucracy as a shield, a stop-us-before-we-commemorate-again approach. The National Capitol Planning Commission, the U.S. Commission of Fine Arts, and the National Capital Memorial Advisory Commission are the three federal agencies responsible for the location and design of any new "commemorative works" on federal land.

Dues for the National Association of Realtors are funding the effort, 100% of which will be paid by the NAR and its dues paying members. H.R. 3425, sponsored by Norton, authorizes the Fair Housing Commemorative Foundation to raise funds for construction and design. If the thought of another memorial in place of a ballfield dismays you, there is no cause for immediate alarm. While staff at Norton's office says the bill will be pushed vigorously in September, and may be ready for mark up by then, it still has to make it through Congress, then through a 24 step process controlled by the various commissions. Of course, the Lobsterman Memorial and Titanic Memorial, both in Southwest, show that there are holes in that safety net.

According to Lisa McSpadden, Director of the Office of Public Affairs of NCPC, the average time for a memorial to go from bill to built is 10 years, mostly due to funding, a large majority of which must be in place before construction can proceed. McSpadden says that the applicant for the memorial typically selects a site and presents the request to the commissions, which then 'guide' the process of design and siting, at which point the memorial becomes inevitable, barring a lack of funding.

At least there may be one new make out spot, unless that's just too creepy.

Monument's Southwest Condo Reboots After Lehman Brothers

In a market lean on financing and glutted with faltering projects, Monument Realty announced Monday that their Potomac Place Tower in DC's southwest will move forward with renovation and sales, having secured the support of a new lender. Potomac Place Tower, a 396-unit condominium at 800 4^th Street in Southwest Washington, DC, has been stalled since Lehman Brothers, the primary lender, filed for bankruptcy last September. Designed by Cloethiel Woodard Smith and built in 1959, Potomac Place Tower and Monument Realty were saved from sharing the same fate as another southwest renovation and (failed) condo conversion, The View, which recently sold at foreclosure.

Monument obtained the project as the Capitol Park Apartments in 2001, the aesthetically challenged building was registered as historic landmark in 2003, and in 2005 residents elected to convert it to condominiums; sales began back in March, 2006. Monument employed architect Jane Nelson to renovate and redesign the interiors. According to Natasha Stancill, Director of Marketing at Monument Realty, the owner stopped settling units early last fall, but did continue to sign contracts through the spring with purchasers who were willing to wait out the unresolved financing problems. With the recent announcement, Monument expects to have units available for settlement in the next 30 to 45 days.

In a press release, Monument advertised that Potomac Place Tower has units in the $200,000 range available for occupancy in the next 30 days, including studio, one bedroom, one bedroom with den, and two bedroom units. Records show that Monument sold 132 of the units in the North Tower, with an average price of $241,000. According to Stancill, the North tower renovation is complete and 17 units will be available for settlement in the next 30 days, while the remaining 35 units of the North tower should be ready for settlement come the 1st quarter of 2010. The South tower project is not complete; half of the 200 units there should be ready for settlement in the next 30 days, with the remaining 100 ready before the end of the year.

DC's land records reveal that on January 26, 2009 Lehman assigned Potomac Place to SwedBank AB's New York branch. In a statement, Michael J. Darby, founding Principal of Monument Realty, said that Monument worked with the lender (SwedBank) to resolve a "very complicated situation" and was "pleased to be in a position to pay contractors and vendors and to bring the project back to market." You can bet the vendors and contractors are very pleased too.

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Ashton at Judiciary Square

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New Condos Complete in Arlington

The first 14 of 89 new condos in Arlington's Courthouse section have finished construction, with the remaining units expected by the end of 2009. With neighbors like the Iwo Jima Memorial and views of the National Mall, Reston-based Waterford Development's Rhodes Hill Square condos may retail for up to $1 million.

Designed by Heffner Architects PC, the units are all large, ranging in size from 1,100 s.f. to over 2,000 s.f. The three wood-framed, 4-story buildings stand over concrete underground parking garages. Most units, 73 of the 89 total, are two stories. All first-level condos private terraces while the upper units provide private rooftop terraces, with standardized finishes like oak floors and granite counters.

The condos cover the area surrounded by N. Rhodes St., 14th St N., N. Rolfe St., and 16th St. North, about three blocks from the Courthouse Metro. WCS Construction managed the project. Construction began in June of 2008, replacing what was largely a vacant field. Waterford has also developed several condominiums in Fairfax, VA.

MoCo's Largest Residential Building is Capped

Montgomery County's tallest residential tower is now in North Bethesda, a 24-story highrise across from the White Flint Mall that earned the distinction just yesterday. The JBG Companies capped the residential portion of the North Bethesda Market on Thursday with the pouring of concrete on the top floor. In addition to the 187-unit tower just off Rockville Pike, North Bethesda Market will feature a new 6-story, 210-unit apartment building and 200,000 square feet of on-site retail space, including Whole Foods (expected to open next summer / fall) and L.A. Fitness, the only retailers to sign up, to date. All the buildings will face an interior courtyard raised above street level. All of the 397 units, about 15% of which will be affordable, are intended to be rental apartments, according to JBG. Despite yesterday's milestone, future residents will have to wait another year to enjoy its "upgraded amenities," if the developer's construction assumptions are correct. JBG says amenities for the new building include a swimming pool, fitness center, billiards lounge, Wii, theater room, and an "exquisitely manicured rooftop courtyard with stunning panoramic views." Completion of the project will also extend Executive Avenue to Rockville Pike. 

HKS Architects was responsible for the design of the overall project. Mike Nicolaus, Managing Director of the DC office of HKS, said the project has been in the works since 2004, highlighting the complexity of zoning approval on the busy corridor. Nicolaus said height was important because the county was looking for a 'gateway' to North Bethesda from the south. "That was part of the rationale for approving something of this height; an important part of the approval process." Regarding the future of the area, Nicolaus thinks Rockville Pike will be much like the Rosslyn-Ballston corridor in density and texture. "Someday soon that that entire neighborhood is going to be very dense." HKS has designed numerous large scale projects in the area, including Waterview in Rosslyn and Gallery Place in DC's Chinatown. Torti Gallas performed initial site designs, Clark Construction is the project's general contractor. The project, then in the planning stage, was recognized in 2005 by the Washington Smart Growth Alliance. JBG is one of the largest real estate developers in the DC area.

North Bethesda commercial real estate news

Southwest IM Pei Apartment Sold at Foreclosure

The View from SW waterfront is slightly less auspicious now for Fairfield Residential. A source familiar with the project has confirmed that The View, designed by IM Pei in the '60's and purchased by Fairfield in 2003, has been sold at foreclosure to Titex Marina View, LLC, an Atlanta, GA based LLC and subsidiary of Titex Real Estate Advisors of Delaware. According to SWDCBlog, in a late night, covert lit drop (notes slipped under residents' doors), Fairfield notified current residents of the ownership change and assured tenants they could continue to rent, for now.

Fairfield purchased The View, located at 1100 6th Street SW, and the adjacent parking lots neighboring the Southwest Waterfront project, and hired Esocoff and Associates to redesign the aged building as a mixture of new construction and interior renovations on the two landmarked forty-six year-old I.M. Pei towers. Another residential tower (see rendering below) was to have replaced the surface parking, but that never quite got off the ground and the parking lots are still going strong.

Fairfield modified its PUD in late 2008 because the south tower of the project had initially been planned as a condo, but market forces required financing as rental apartments. At the time, Graham Brock of Fairfield discussed the limitations of the financial system and how they had affected the project. Brock said the "existing residents in the Pei towers wanted the option of home ownership, but then we struggled to find ways to finance that building and get those residents to qualify for loans. The market changed and the deal we had come up with wasn't as strong anymore." It would appear even the rental option was not strong enough to sustain Fairfield's hold on Pei's work. In retrospect, maybe condos, now scarcer, would have been the better option.

Beginning in mid-April 2008, Marina View Trustee LLC and Marina View Towers LLC (co-grantors of the property with Fairfield) refinanced their $14.5 million loan with Wachovia Mutlifamily Capital, Inc. The next day, Wachovia signed over its Deed of Trust with Marina View Towers for the sum of $10 to Fannie Mae, and with it the first lien of the Deed of Trust. On July 14th of this year, Fannie Mae signed over the Deed of Trust to Tritex Marina View. On July 28, Tritex designated substitute trustees from the law firm Lerch, Early & Brewer, Chtd. Tritex has been involved in a series of large real estate transactions over the past few years, taking advantage of a commercial market that is weak, and getting weaker.

DC v. Federal Tax Credits

A follow up on our recent post about the $8,000 tax credit that will soon expire, and its possible termination, extension, or even expansion: Washington DC real estate shoppers already have a tax credit available to them, a $5,000 credit, also courtesy of the federal government. While the DC-only credit is smaller, there are some advantages to the smaller credit that a buyer should consider.

While the $8,000 credit is available only to purchasers who did not own a principal residence in the three years prior, the DC credit excludes only those buyers that owned a principal residence during the prior year, and only in DC. And the DC credit requires no repayment, even if the residence is sold within three years of purchase, unlike the $8,000 credit. For a full breakdown, see the chart below

$8,000 Credit	$5,000 DC Credit	$15,000 credit (proposed)
Anywhere in U.S.	Only in D.C.	Anywhere in U.S.
Purchased principal residence by 11/30/09	Purchased principal residence in 2009 (subject to annual renewal)	Purchased within 1 year of bill’s passage.
Did not own a principal residence during preceding 3 years	Did not own a DC principal residence in D.C. during preceding year	Other: Divisible into 2 years
Ineligible if modified AGI is $95,000 or greater ($170,000 if MFJ). Phase out begins at $75,000 ($150,000 MFJ)	Ineligible if modified AGI $90,000 or greater ($130,000 MFJ). Phase out begins at $70,000 ($110,000 MFJ)
Cannot claim if claimed D.C. First-Time Homebuyer Credit in any prior year	Cannot claim if eligible for First-Time Homebuyer Credit or if previously claimed the D.C. First-Time Homebuyer Credit	Cannot claim with any other homebuyer credit
Repayment required if the residence is sold within 36 months	No repayment	Repayment if residence is sold within 24 months

Columbia Pike Construction Commences

With big changes ever promised for Columbia Pike, evidence of actual progress is worthy of comment, especially when that progress is on schedule. Such is the case of Penrose Square. The only remnant of the former tenants at 2405 and 2501 Columbia Pike is the sad Giant Food sign surrounded by trailers, fences and barbed wire, but the project is on track for its scheduled delivery of late 2011.

Back in March, Foulger-Pratt Contracting won the $79 million construction contract for the building, and construction is now underway; Heffner Architects of Alexandria, Virginia have designed the project. There is little else new on the nearby strip, but Arlington continues to see the slow transformation of Columbia Pike with future plans for a street car with a stop at Penrose.

Carbon Thompson and B.M. Smith Associates will complete Penrose Square as a mixed-use development to include 325 rental apartments, 97,000 s.f. of retail space, and three levels of below-grade parking. Included in the retail space is a rebuilt, 57,000 s.f. Giant supermarket, with the residential units built above. The developers have also donated a parcel of land in front of the development for a new town square for pikers, also called Penrose Square, though right now it's all just one big hole.

The property is bordered by Columbia Pike to the south, Adams Street to the east, 9th Street to the North. Despite the new density, the height will remain low; 6 to 7 stories along Columbia Pike tapering to 3 1/2 stories along 9th Street.

DC Opens Ballpark Pier to Water Taxi

The District of Columbia announced today that it is ready to open water taxi service to the ballpark. The small Anacostia River pier, part of Diamond Teague Park, is adjacent to the Nationals ballpark, and will accommodate water taxi service to Maryland and Virginia, though not to other points within DC. At least not for now.


According to the District, six charter companies will operate up to a dozen different vessels, ranging in capacity up to 149 passengers, that will operate between the new pier, National Harbor, and Old Town, Alexandria. Service will be made available for all Nationals home games and "special events." But don't go queuing up for taxi service just yet, because its not available. While the pier is "open," that applies only to charter services that choose to operate. While the District-owned pier is technically available for taxi service, potentially to Georgetown and Southwest, operators that choose to establish service have not yet begun regular service, though individuals associated with the project expect that will happen for next year's games.

The surrounding park is not nearly complete, and isn't expected to be substantially complete until well after baseball season, leaving the District's announcement, following a canceled press conference, seeming in haste. The District government paid $8.5m for the new piers, the pier will be administered by the operators of the Gangplank Marina in Southwest DC.

The District government is also building a second pier at the same location, for "environmental education" and for smaller boats, which are expected to offer ecotourism up the Anacostia River.

DC Property Tax Auction: All Inventory Must Go!

Washington DC's tax sale is on. Well, almost. Registration for the District's tax sale auction for property in tax arrears begins on Monday, August 31, and ends September 4th, so don't delay - act now - to get your next house on the cheap. The auction of delinquent properties will take place starting Wednesday, September 9th, and continue until all properties delinquent as of October 1, 2008, have been sold.

Property with less than $1,000 in back taxes may be put on the block to a willing bidder. So is this the place to pick up the home you thought you couldn't afford? Not really, says David Kanstoroom, a title attorney with North American Title. Because the District provides a statutory right of redemption (an American value, you know) for auctioned properties, wayward owners may pay the back taxes, penalties and interest, and in so doing reclaim the property. "A high rate of these properties - 90 plus percent - are ultimately redeemed by the original owner" says Kanstoroom. According to Andrew Schechter of M and M Search Service, a title search abstractor and auctioneer, the point of the auction is often not to obtain title to a property, but to invest in a distressed property and collect interest from the previous homeowner.

Auction participants, who technically purchase the lien on the property, not the actual title, are entitled by DC law to earn 1.5% interest, per month, on the tax lien amount, to the homeowner that wants to redeem the property. Investors are therefore bidding on the amount of the tax lien, plus whatever surplus they determine the investment will justify.

Schechter notes that 4 months after the tax sale, investors can begin charging homeowners for actual title search costs, and 6 months after the tax sale they can begin charging "reasonable" attorneys' fees, a point at which the real money may kick in. Because the process is judicial, rather than administrative, the length of time to process the sale is determined by the court, but a case cannot be opened until 6 months after the tax sale.

Homeowners will still have to contend with penalties by the District, and any other outstanding liens, but according to Schechter, the District's intent is not to make tax sales an easy route to home purchasing. While it may be easier in Maryland, where the homeowner conducts the same type of transaction directly with the state, rather than a private investor, Schechter says the message from the DC government is simple: Don't attend the auction to pick up the home, go for the high interest accrued on the delinquent taxes. If its ownership you're looking for, you'll just have to go about it the old-fashioned way and search online.

The sale will be held at 941 North Capital Street, 4th floor.

Streamlined Bus Terminal at Union Station?

Congress is mulling big changes for Union Station including a new intercity bus terminal, improved rail passenger access and reduced congestion via two new concourses, proposed reinforcement of the H St bridge, altered and additional metro entrances and the renovation and expansion of the north station entrance. During a July Congressional hearing, lawmakers urged project officials to create a master plan so the Members could seek funding from their Congressional colleagues. The project could move forward with as soon as this fall.

The plans seek to streamline Union Station's role as a transportation hub with an intercity bus terminal. The current Greyhound Bus station is separate from Union Station, requiring passengers to walk outdoors for several minutes through a less-than-ideal area in terms of safety and accessibility; Greyhound has recently pursued moving into the train station. The bus terminal may be home to other bus lines including Bolt Bus and DC2NY among others. In addition to the connected bus terminal, two new metro entrances may be incorporated in the redesign.

Initially, the Union Station Redevelopment Corporation (USRC) would not allow buses to use the station as a hub. But after several letters from House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) and Subcommittee Chair Eleanor Holmes Norton (D-DC), the USRC and Greyhound began cooperating and testified before the Committee in 2008. This most recent hearing was meant to update Congress and expedite the process.

Chip Akridge, Chairman of Akridge Development, which purchased the air rights of Union Station's train lines in 2006, called the plan a "vast improvement for intercity bus passengers" because it offers a safer and more direct transfer. The developer plans to build the gargantuan 3 million-s.f. Burnham Place, named after Union Station's architect, which will extend north of Union station, past the Hopscotch Bridge on H Street, and house a 400-room hotel, residential towers and first-class office and retail space. Akridge requested $40 million for a new bus terminal and two new metro entrances. The metro access points would be at 1st St NE below the H St overpass, with a connecting walkway to the existing metro ticketing area, and at H St. NE, directly adjacent to the planned terminal. In a statement, David S. Ball, President of the USRC, said the group will be able to move forward with plans pending a study of the physical limitations of the existing parking deck, which has been suggested as a location for the bus terminal. The 42,000 s.f. of space, a portion of the total 140,000 s.f. current parking deck, is being evaluated for the cost of delivery of utilities as well as its structural carrying capacity. The study will help determine the cost of building the terminal, allowing the involved parties to make end user, design, construction, financing and scheduling decisions as early as this fall.

According to Ball, the engineering firm has promised delivery of their evaluation of the parking deck this week. Ball also indicated that the current plans and numbers are very fluid; the actual amount of space devoted to the bus terminal may change pending the report.