Its Fun to Dig at the Y-M-C-A

Mayor Fenty, Councilmember Jim Graham, ANC chairman Dee Hunter and numerous YMCA officials today attended the groundbreaking of a new mixed-use development at 14^th and W Streets NW, the current site of the YMCA Anthony Bowen. The 263,000 square foot project is being developed by Perseus Realty LLC in conjunction with Capmark Investments LP and the minority owned DC-based FLGA Real Estate Group. The $97 million development, entitled 14W, will include the construction of 231 rental apartments (including 18 affordable), a new 46,000 square foot YMCA and 12,200 square feet of retail space. Designs for the project by Davis Carter Scott and Hellmuth, Obata & Kassabaum Inc. (HOK) encase the ground-level retail outlets in townhouse facades and place the residential quarters above the new YMCA. Future residents can look forward to amenities such as a billiard room, a 24-hour business center and concierge, catering kitchen, bar, rooftop garden and a 1-year membership to the YMCA. HPRB green-lighted the project in May when it approved the demolition of the existing buildings on the site.

The Mayor was adamant in his support of the development. “It’s the young people that we have at the front of our focus for this project,” said Fenty. “The projects, programs and lives that have been impacted by the YMCA are too numerous to mention…You have our commitment that whatever it is– from deferments to operations to transportation to the help of any other DC government agency – we will give it.”

The new $15 million YMCA is the fruit of more 2 years of active development on the part of the YMCA of Metropolitan Washington (YMCAMW). When completed, it will include a wellness center, child care facilities, office space, rooftop terrace, community meeting rooms and – as its centerpiece – a 25-meter indoor pool. Although the current facility has been vacated for demolition, its community services have been relocated to various “borrowed” spaces throughout the city.

The YMCA Anthony Bowen has a rich and storied history in the District. The organization was named for a Prince George’s County slave who relocated to Washington after purchasing his freedom; he then went on to co-found the nation’s first African-American YMCA in 1853. The current incarnation of the YMCA that bears his name first opened in 1912 and has stood at its present location since 1978 – a time when the U Street corridor ran rampant with violence and drugs.

“Anthony Bowen had a dream and it’s the centerpiece of that dream that’s become the reality for what we have here today…an unwavering belief that the evils of our past do not dictate the possibilities of our future,” said Angie L. Reese-Hawkins, CEO of the YMCAMW. “We’ve replaced the fear and distrust with families and…people who are committed to the community. This is what the nation’s capitol is all about.”

14W is being financed by the Royal Bank of Scotland (RBS). Clark Construction has been contracted for the development and is predicting a late 2010 completion.

Washington DC retail and real estate development news

Whitman-Walker Goes High-Rise Residential

The JBG Companies are moving quickly with their proposed redevelopment of the soon-to-be former headquarters of the Whitman-Walker Clinic. Located at 1407 S St. NW, flush with the corner of 14^th, current plans call for the construction of a 7-story residential building to be complimented with ground level retail. The as-yet untitled development is aiming for a late fall 2009 groundbreaking with completion slated for two years thereafter.

The Shalom Baranes-designed building will contain between 120 and 130 residential units in its 120,000 square feet and top out at 75 feet above grade. Although floorplans and designs have yet to finalized, Andrew McIntyre of the JBG development team told DC Mud that the developer is "definitely leaning towards high design, efficient units." JBG is currently engaged in talks with the city government regarding the inclusion of affordable housing in the project.

The development should be an alluring addition for local businesses, as it will stand on a block that already houses several chic inner-city destinations such as the Café Saint-Ex, the Pulp boutique and the Black Cat nightclub - venues that are filling up the rapidly developing 14th Street retail corridor. JBG is currently vetting prospects for the site that include a grocery store, a pharmacy and a restaurant. “It will be a complement to the retail that you find up and down 14^th Street and in the whole Logan Circle neighborhood,” said McIntyre. “We’re really excited to building over in that corridor. There’s a lot of opportunity at such a vibrant location in the city.”

Since the developer acquired the parcel at 14^th and S Streets NW last June, designs for the development have been undergoing both internal reviews at JBG and before the Historic Preservation Review Board (HPRB). Having made the necessary revisions according to the HPRB’s specifications, designs will once again go before the Board in October.

JBG acquired the Whitman-Walker Clinic’s administrative headquarters last June for $8 million, though the facility will remain operational until the end of the year. McIntyre characterized the developer’s relationship with the prominent local HIV-AIDS and social services organization as a win-win situation for both parties:

“They are actually condensing their operations into their other existing building. We stepped in because Whitman-Walker was looking to fund the shortfalls from their operation through other sources. This was an opportunity for us to help them out and a very mutually satisfying opportunity from the standpoint that we really believe in their mission.”

Insider Interview: Scott Pannick of Metropolis Development

Scott Pannick, the founder and CEO of the Metropolis Development Company, is preparing to launch his fifth and largest condo project on the 14th Street corridor - the Metropole - and find out what he thinks of his latest project, how having a Harvard MBA helps give perspective on market fluctuations, and what would happen if he had to do it all over again.

How did you break into the development game?

I was a commercial broker for almost 20 years. The last 10 of which I spent acting as a representative for large institutional and corporate users in the development of corporate headquarters. Though I was a broker - I was in fact representing people in their real estate transactions and not the principle - nevertheless, I was actually acting in the role of a developer.

Was that here in the District or out of state?

I did projects here in Washington and elsewhere. I built the headquarters for the Educational Testing Service in Princeton and the headquarters for Bristol-Meyers Squibb in Princeton. I built the headquarters for Core State Bank of Delaware, close to Princeton in Lawrence. I also did the American Red Cross Headquarters here. The last project was to represent the federal government in the development of the headquarters of the Department of Transportation – although in that case I didn’t act as a developer, I acted as a representative for the government and, at the end of the day, hailed the competition to name the developer.

You started with Langston Lofts on 14^th and then built three more on the same street. Was there an initial vision to stay on that corridor from the beginning, or was it just serendipity?

The two first buildings were almost simultaneous. One was Langston Lofts on the corner of 14^th and V Streets and the other was Lofts 14 on the corner of 14^th and Church. If you look at District zoning from Georgetown across, for the most part, you see fairly low density zoning and 3 and 4-story maximum buildings. The first time that you see zoning that pops up higher than that is 14^th Street. That was also incidentally just where the development line was, where the renovated versus the un-renovated was. So, 14^th Street was a very logical place to look to pursue development.

If you knew now what you knew 8 years ago, what would you do differently when developing a project in the District?

In all honesty, if I knew then what I know now, I never would have done this. From my perspective, the biggest obstacle has been construction. Construction is an enormously difficult business in its simplest times. It has turned out – and everyone has experienced this – that condominiums are, frankly, more complex than virtually anything. I had a construction manager who worked for me for a while who had built BWI Airport and made the comment that condominiums were more complicated that airports. It’s a building that has enormous density in it – in other words, there are kitchens, baths, independent mechanical units and every unit has its own plumbing system and its own selection of finishes. So you’re building a building with 80 or 90 individual units, all of them different, all them having complexity.

If contractors can do one thing and do it repetitively, it’s great. But because of the fact that this is urban in-fill development, it’s very very space constrained. And because of those space constraints – and lot lines limitations and Historic Preservation Review Board input - you end up building with 90 units using 35 different floor plans. If you’re out in the suburbs and you’ve got no lot line restrictions, you can work it out so all the units are the same. But when you are building in the city, literally every side of the building is constrained by height and lot lines, so you are trying to fill that box with usable space. It becomes impossible to just take something and repeat it.

Is your newest building, the Metropole living up to your initial vision?

I think it’s actually better than I had anticipated. I think it’s a beautiful building, it sits magnificently on the site and I think – I’m a developer so I have prejudices – if you’re going to live downtown, where better would you want to live? It’s kind of where the action is. There are two premier axes – one would be 14^th and P and U Street being the second because it’s another street that goes all the way across town.

What sets the Metropole apart?

I think a number of things. One of my criteria working with the architects [RTKL] is that I want all of the units to have some kind of ‘wow factor.’ There are lots of units with 18 foot ceilings or floor to ceiling glass – lots of very exciting space. We were fortunate to be able to negotiate a contract with Vida for a major fitness facility in the building, which obviously in today’s world is something that people are interested in. We put 70 extra parking spaces into the building that will be available to the public, but will also be available to residents if there mother-in-law comes for a stay.

Lastly, I’d say that the architecture of the building is more dramatic than most others. If you look down the north side of P Street, there are 4 new buildings. We built the 2 buildings on the west and the east end of the block and if you look at the architecture, I think it’s more exciting. Higher end finishes and higher end materials.

What is your take on the current crunch that the housing market is undergoing?

I think it has two ways in which it affects us. One is that across the board for buyers of everything – whether it’s housing or corporate financing or whatever – money is more difficult to obtain. Therefore, lending criteria are more difficult and it strains some buyers. Many buyers have equity from previous homes and have no problem with it, but clearly, the credit crunch is a factor certainly for first time home buyers and people with poorer credit.

Secondly, the overall real estate and general economic news just makes everybody nervous and causes them to pause. The fact of the matter is that if you look at the DC condominium market, there are no more than 2 or 3 projects at most that we would consider to be comparable to our own without really looking at significant compromises on location or finishes. There’s really a very, very limited supply. It’s not like New York where there’s 25 buildings or even 50 that you could look at. In Washington, if you’re planning on living in a really high quality building, there’s really only 2 or 3 buildings that you can look at.

But the problem we have is that you turn on the nightly news and you hear the generalized problems in the housing market. Housing prices may be continuing to fall in Des Moines, but they did not ever fall in downtown DC. We didn’t lower our prices and I don’t of any high quality product that has either. Yet at the same time, the condominium inventory over the last 18 months has diminished dramatically - both because there continued to be sales and because projects have converted from condominium to rental.

I’ve been through this for 25 years and there is an absolute pattern that occurs every single time. The market gets soft – whether it’s by over-supply or credit crunch or poor economy – and everybody stops building. The market tightens and prices go up. Now whether that occurs in 6 months or 18 months is always hard to predict, but the fact of the matter is that I would bet that 3 years from now – and it could be 6 months from now – that prices go up and they’re going to go up fast. All of the sudden, people are going to say, ‘Whoops, there’s no more supply’ and grab for the last units. Then we’ll go into a 3 year period where there will be no product. Nothing. And people will say, ‘When are you going to build another building?’ And that’s the way the cycle goes.

Do you ever see yourself tackling a Metropolis project outside of the District?

You know, I’ve been asked that question many many times and I always say no. I did a lot of commercial projects in other jurisdictions, but real estate is a very local business –in terms of knowing the markets, knowing the players and knowing products. I’m not a guy who is interested in developing a big company with a big staff, so that we can do this on kind of a formulaic basis. I’d be more inclined to do projects that feel comfortable to me because of my own knowledge base.

I also am – for reasons of global warming and urban sprawl – ultimately an urbanite. I believe that cities are healthier for our planet. I could go to other cities and know nothing about them. I could go to the suburbs and feel like I was contributing to the decline of the planet.

What would consider your proudest accomplishment?

Probably the Metropole and I say that seriously. The earlier buildings I think came out beautifully, but they were, to some degree, learning experiences. Many of things that I saw in the earlier buildings that I was not as comfortable with we’ve now overcome as obstacles. Now I look at the Metropole and it’s a beautiful building. I’m very excited about its delivery in the next couple of weeks.

What is your dream project?

I’m going to contradict everything I just said. I think it would be really exciting to build a skyscraper. What happens when you build a really big building like that is – because of the magnitude and scale of it – you can put all sorts of amenities in it. A thousand unit complex can afford to support many more amenities. I’ve always been much more excited by big projects.

But that is going to be impossible to do on 14^th Street. I do have some future projects, but they’re going to be on the same scale as we’ve worked on so far.

Bowen YMCA Update

Five buildings in the 2200 block of 14^th Street (2203, 2205, 2207, 2209, 2211) were approved for demolition by the DC Historic Planning Board as part of the new Anthony Bowen YMCA and 14W project by DC-based developer Perseus Realty, LLC and YMCA of Metropolitan Washington. As DCMud reported in May of last year, at the project's completion, 1325 W Street will include a new YMCA facility (45,000 s.f.), 229 rental apartments, and 12,000 s.f. of retail space in a project that will border 14th and W Streets. Construction will begin at the 1325 W Street site in September with completion scheduled two years later in 2010.

According to Perseus, legislation was passed to close part of the alley between the townhouses and the existing YMCA, and Perseus has already received HPRB approval. The facades of the townhouses and the front forty feet of each structure will be preserved as historic structures.

“We are filing for certain permits, which takes a while and we are in the final stages of working drawings, so we’re positioning it to get started,” said Robert Cohen, President of Perseus Realty, LLC.

The project was designed by Hellmuth, Obata, & Kassabaum and Dorsky Hodgson & Partners, the developers have also hired Bozzuto to oversee leasing and management of the residential component.

14th Street: Apartments In, Nehemiah Center Out

14th Street's Nehemiah Center, that vestige of bad architecture and short-sited urban planning, will soon be demolished to make way for a large residential project. Texas based UDR, which purchased the site last year, requested raze permits last week, and expects to begin demolishing the property by the end of the second quarter. UDR acquired the hopelessly outdated strip mall at 2400 14th Street from Level 2 Development, which took the project all the way through the existing, and currently approved, P.U.D. stage. UDR will implement Level2's plans, with some embellishment, at an estimated total cost of $130 million. DC-based Metropolis Development had initially purchased the option from Level2 for the rights to develop the site, but later sold the option for a profit to UDR. The Nehemiah Center currently serves as a one-story retail building along 14th Street, within shouting distance from the U Street Corridor - currently a real estate hotspot surrounded by several ongoing and planned residential projects. 

Level 2 wanted to capitalize on the area, but opted to sell and concentrate on its View 14 project across the street, a project that it began as condos but that is now just beginning to come out of the ground as an apartment building. UDR's adaption of Level2's plans will replace the old retail with 17,000 s.f. of new retail, and add more units than the currently approved 225. Two weeks ago, UDR's team met with City officials to apply for an addition of 30 residential units to the overall scheme. The firm expects to receive comments regarding whether this increase is feasible within the next month, after which a Zoning Commission hearing will be required. The building will rise nine stories above the 14th and U Street Corridor, advantageously perched as one of the higher buildings in the area on the slope that rises to Columbia Heights, offering the potential for the distant views rare in the District. The residential units will average 775 s.f. and were initially pushed through the planning process as condominiums, but according to sources at UDR, the market forced them to build out as a market-rate apartment building. 

There will be a number of affordable housing units as well as a 1,000-s.f. commercial space designated as educational, job training, retail space. Behind the main building will sit a multi-level parking garage, half above-ground, an issue that has been one of the biggest sources of problems from the community. UDR held a public meeting in February to address the community's concerns about design and construction phases. Turns out the community is agitated over the abundant road and sidewalk closures that result from the numerous projects in the neighborhood. UDR will now phase the construction so that the parking structure would be the first to be completed, hoping to lessen parking and traffic concerns. "Although we are a national multi-family developer, we understand the importance of local consultants who understand how things get done in their backyard. We want to bring people in who have those existing great relationships, who know how to develop projects in the city. So we felt comfortable," said Rodney Burchfield with UDR. Burchfield is referring to both Shalom Baranes Architects which is designing the new building, and Donohoe Construction, the General Contractor. "As an owner, we're looking to be a part of this new and emerging part of the District, and we want to be a great neighbor," Burchfield added. Shalom Baranes' design will feature floor to ceiling glass views, private terraces, a rooftop pool and garden as well as a massive lobby and outdoor atrium. UDR will be going for LEED points but has not decided whether or not to strive for LEED certification.

Furioso Condo Project on Hold – Commercial Development Considered

Giorgio Furioso’s project to develop the vacant lot on 14^th Street, next to the organic restaurant Veridian, is on hold, a representative of Furioso Development said. Furioso had been approved by the Historic Preservation Review Board to build an ultra-modern condominium next to and above 1515 14^th Street, but may instead pursue opening a second restaurant or boutique hotel on the site.

Speculation about the reasons for the plan’s demise centered on potential construction costs. Construction companies may have perceived the project - designed to have a large, curving glass and steel facade - as being so architecturally sophisticated as to exceed reasonable construction costs.

Furioso is known for his background in the arts, having redeveloped the former Hudson Automobile showroom building at 1515 14^th Street into a center for the arts, with his restaurant Viridian on the ground floor featuring regularly changing art shows, and art galleries on the second and third floors. The building, originally constructed in the 1930s was part of the 14^th Street "auto-row" – a series of car dealerships.

The aborted condo project, which was to include additional arts-oriented retail, had been delayed in zoning and permitting. Emma Saal, an associate of Furioso, describes his style as very modern. She added that he was one of the originators of a now much-used mixture of glass and steel that makes use of the classical attention to detail. Saal points to one of Furioso’s signature projects as an example of his style. "Solo Piazza," she says (SoLo – or South of Logan) "is a perfect illustration of his combination of classical detail within a modern structure." Saal points to Solo Piazza’s floor to ceiling fenestration and multiple colors for the masonry as capturing the essentials of that style’s attention to detail while reinterpreting the building in a modern manner. "It’s very Giorgio," said Saal, "old and new in a modern setting; clean lines with a crown of steel and wood."

Saal added that regardless of what Furioso does with the 14^th Street property, she’s certain it will be a great architectural addition to the Logan Circle area. "The restaurant, or a boutique hotel; either will be designed with the same great attention to detail and the wonderful modern flair that makes Furioso unique."

Washington DC real estate development news

Nehemiah Center Faces the Reaper

Level2 Development of DC announced a preliminary plan for developing the Nehemiah Center, a block-long strip mall at 2400 14^th Street between Columbia Heights and U Street. The developer, already marketing View14 condominiums just across the street at 14^th and Florida Ave., is partnering with Chicago-based Centrum Properties for both projects. The team hopes the weight of the two projects will bring a transformation of the area into a “retail anchor” by adding parking, 20,000 square feet of retail and 225 residential units replacing the out-of-place shopping center, and 17,000 s.f. of retail and 170 condos at View14. Shalom Baranes will design the newest project, which should start construction late next year. A spokesman said Level2 purchased the Nehemiah Center for “approximately $13m” and envisions the area as a “gateway between Columbia Heights and the 14 ^th & U corridor, an area largely bypassed by local development.” No name has yet been adopted for the new project.