Palisades Development, Under New Ownership, Digs in

Construction began only a handful of days ago on Canal Parc, a 34-unit townhouse development to take the place of the now-demolished Riverside Psychiatric Hospital at 4460 MacArthur Blvd, NW. The for-sale units are on track to occupy prime clifftop real estate overlooking the Potomac River in the Palisades, now that Duball has purchased the project and brought in a new architect. The property was purchased in early 2006 by New York-based The Athena Group, who brought on DC-based Willco Residential LLC as lead developer of a 41-unit PUD project in July of 2007. A raze permit was sought in August of 2008 to level the controversial private, for-profit Riverside, which ran into trouble in 2007. 

 In 2008, the DC Office of Planning was in favor of the density-decreased, 37-unit LEED Neighborhood Development (ND)-certified version of the project, however the skimmed-down version was still an ire to the Palisades Citizens' Association (PCA). The plan was cut to 34 units in 2009. The DC Office of Zoning approved the Willco Residential-run, and Lessard Group-designed PUD project in March of 2010, after a significant lapse of time from final plan presentation in late 2009. Due to the delay, rumors circulated about the solvency of project developers, which turned out to be half truths - there was financial trouble, but not on Willco's end, instead The Athena Group is currently liquidating many of its properties across the country. Gary Cohen, president and founder of Willco, says the property was put up for sale by Athena in 2010, and a triple-joint-venture led by Duball LLC "blew away the competition," purchasing the land for $12 million early this year. 

 Getting right to work, the trio of Duball, Buvermo Properties and Stanley Martin Companies LLC, dubbed "Duball MacArthur LLC" completed initial site work this past spring, after the hospital was razed in February. Site grading, backfill and compaction is currently underway with Duball in charge of project management, and Stanley Martin in control of tangible construction. Although the original Lessard Group design still holds, Pinnacle Design completed construction documents for the current venture, and is considered to be the architect currently on the project. Marc Dubick, president and founder of Duball, says that the 34-unit project will deliver the first townhouse to the market by the end of the year. A 2008 estimate for the sale of the townhouses was between $1.3 and $1.7 million; updated prices have not been released. Foreseeing that construction will roll along at a two-townhouse-per-month pace, Dubick predicts that the project will be complete in 17 months. The 2.7 acre property will contain over 100,000 g.s.f., and townhouse units will range from 2200 sf to over 3500 sf. Dubick says the variation in unit designs results in "two different products within the same community." Although there are two prototypes, Dubick adds that all units will be "state of the art, luxury" townhouses. Other ongoings for Duball include its transit-oriented, Safeway-anchored multifamily development at 3830 Georgia Avenue NW, which will begin construction in mid-to-late 2012, says Dubick. The project is currently undergoing the entitlement process. Update: An earlier version of this article incorrectly estimated the percentage of built area on site.

Washington D.C. Real Estate development news

Green Light for Canal Parc

Today, the Zoning Commission issued its final order approving plans for Canal Parc, 34 new single-family townhouses that will take the place of the aging Riverside Hospital. The decision should serve to dispel recent rumors circulating around the Palisades neighborhood and the Local ANC3D Chapter that the residential development was flat-lining. Developed through the LEED Neighborhood Development program to replace the hospital at 4460 MacArthur Boulevard, the homes are being built by Willco Residential, LLC and New York-based The Athena Group.

In September of 2009, Washington DC's Office of Zoning (DCOZ) drafted its final approval for the Lessard Group-designed development. But six months have passed and the final order had not been released. "It's not supposed to take this long," Willco Residential President, Gary S. Cohen lamented earlier this week. "Usually after the Zoning Commission approves [a PUD], it only takes a few months" for a project to garner its final official approval. The delays have left community members scratching their heads.

ANC3D Chair Betsy Sandza says she has "heard rumors that the developer has cooled off." Canal Parc "has fallen off the face of the map," says Palisades Citizens' Association President Spence Spencer, who speculates based on conversations he had with Cohen that money for construction may have dried up and that Willco and development partner, Athena, may have parted ways.

But according to Cohen, rumors about financing and a developer split are "absolutely false." Cohen told DCMud, "Bottom line: every thing is in the District's hands, "adding that he and Athena are still partners on Canal Parc and that the "project is still moving forward as planned."

So even if the project hasn't changed development hands, the Palisades community would like to know: What was the hold up?

Though Cohen had a draft approval, he could not apply for permits until the DCOZ issued a final order. And before that could happen, the Office of the Attorney General reviewed the draft order, provided by the developers, to make sure the legal language expressed the decisions of the DCOZ. The AG looks for inconsistencies, vague language and loopholes to ensure the developers' promised park benches and scholarship funds are included in the final order.



Prior to today's official green light, Cohen admitted that the project has been a sensitive issue within the community, but he said he was hopeful that the DCOZ was just working to "make sure all the i's are dotted and the t's are crossed." Consider them dotted and crossed.

As ANC3D Chair Betsy Sandza tells it, "density and height were our two biggest concerns" within the neighborhood surrounding the development. In light of these concerns, Willco and Athena changed their design to reduce the number of brick townhouse units from 41 to 34.

But in August of 2009, Sandza combined forces with Spencer and submitted a letter to the Zoning Commission, arguing that the reduction of units was not enough to bring Athena and Willco in line with the designated Floor Area Ratio (FAR) (i.e. density) on their lot. In the letter, Sandza and Spencer further charged Athena and Willco with miscalculating the FAR for the project so that it appeared to be within the limits allowed by law, arguing that "the Zoning Commission should approve this project only with the condition that the applicant eliminate at least 7,220 square feet of gross floor area...to bring the FAR into appropriate scale."

The good news for Cohen could be overshadowed by an appeal concerning the FAR. Cornish Hitchcock, an attorney representing two families on the SE corner of the project, expected today's approval, but could make things difficult for Cohen. An appeal would delay Cohen's ability to apply for permits and start construction.

For now, though, Canal Parc has momentum behind it and, according to Cohen, he will forge ahead.

Washington DC Real Estate and Development News

Canal Parc Seeks PUD Approval in July

Willco Residential, LLC and New York-based developers Athena Group will head back before the District of Columbia Zoning Commission next month to hammer out the lingering entitlements stalling their planned residential redevelopment of the Riverside Hospital - an aging psychiatric facility at 4460 MacArthur Boulevard in Northwest DC's Palisades neighborhood.

Long viewed as undesirable element in the affluent community (the hospital last made the news when it was faulted with abuse of a minor in 2007), the development team is hoping to demolish the site and start anew with Canal Parc - 37 brick townhomes, developed via the LEED Neighborhood Development program, to replace the long-term care facility. Little, though, has been heard of the project since a raze application for the hospital was filed last August and Willco Residential President, Gary S. Cohen tells DCmud that his team is still in the midst of negotiating the planned unit development process with city authorities.

“[Right now], we’re trying to get the PUD. When we get the PUD, we’ll move ahead. Right now, we’re still working on the entitlements,” he said. “There’s been action, but the Zoning Commission hasn’t voted on it yet…We’re hoping that at the hearing in July they’ll take the vote. We’ve also been working with the neighborhood and trying to resolve some issues.”

The Office of Planning threw their support behind the project in November 2008, but stopped short of a full-on approval of the site plan due to in-progress talks with the DC Fire and Emergency Medical Department about a turn-around area within the development. Additional issues, mostly stemming from the economy, have kept Canal Parc from heading down the fast track, but Cohen is confident that once the project’s finer details are in place, the market will be receptive to a another residential project.

“I’m looking forward to getting off the ground and starting. I do think that by the time we deliver, the market will be at a better place and there won’t be as much supply because there’s not much between now and the next few years. So I think the timing could work out really well. It’s just a question of getting some the pieces that I don’t necessarily control in their proper place,” he said.

As such, a schedule for demolition and construction of the Lessard Group-designed development has yet to be set in stone, but should be much clearer following next month’s Zoning Commission hearing. “I’m hoping it’s on the sooner side,” said Cohen.

MacArthur Boulevard Townhouses

An old psychiatric hospital on MacArthur Boulevard may be replaced with for-sale townhomes as early as next year, if all goes well for the developer. Willco Residential and the New York-based Athena Group, LLC, which owns the property, are in the PUD process for Canal Parc, a 37-unit development at 4460 MacArthur Boulevard, NW. A partnership between the two companies, if approved, the project will yield "higher end" townhouses and break ground in the spring. Designed by the Vienna-based Lessard Group, the project in the Palisades neighborhood was originally planned as 41 units but has since been scaled back to 37 three and four-story townhouses. Under the new plan, the developer will demolish the old Riverside Hospital and change the site's use from institutional to residential. According to Jack Rosenfield at the Athena Group, the project is the biproduct of a friendship between the two developers. The team submitted an application for a raze permit for the old hospital on August 6th; the city has not yet responded. In proximity to the 120,929 s.f. development are Canal View - single family houses, Foxhall Mews townhouses, and rowhouses along Lingan Road. Rosenfield said, "Even through prices have softened, this is a great location." The Lessard Group also designed The Monroe at Virginia Square in Arlington and JPI's Kings Crossing in Alexandria. The Athena Group developed the Grove at Arlington. Willco Residential developed Jefferson Row in Dupont Circle. You'd almost have to be crazy not to buy here.

Washington DC commercial real estate news