CityCenter: On Track for Early 2011 Groundbreaking

As the financial downturn slowly releases its chokehold from DC development, increasingly large projects are beginning to set timelines, even without tenants. Underscoring that point is Archstone and Hines Interests’ redevelopment of the old Convention Center site, a plan has been mired in delays, with one groundbreaking schedule after another falling to the wayside. Developers are now claiming that the project will begin early next year. The multi-phase, mixed-use development will commandeer 10-acres of vacant downtown property to eventually realize 400,000 square feet of retail space, more than a million square feet of office space, 458 rental apartments, 216 condos and a 400-bed “high-end” hotel with its own 100,000 square foot retail plaza, under a 99 year lease from the city.

Howard Riker, Vice President at Hines Development, said the developers are "pretty much done with all of our plans and are within a couple weeks to be able to pull our building permits." Riker also indicated that the team had to rework a few elements of the office building design to "accommodate a major tenant prospect." He was unwilling to divulge any information about the prospective major tenant. Riker said the team has already chosen a general contractor team of Clark with Smoot Construction; subcontractor bidding will begin shortly. The first phase of construction is scheduled for the first quarter of 2011. "The idea is that we'd start construction on the entire site south of I Street at one time, dig a deep hole, build the parking" and then continue with the office and residential projects, explained Riker. The project should reach "substantial completion between May and September 2013" estimated Riker, adding that the office would deliver first, likely in the spring, with the residential following shortly thereafter over the summer. The first phase is estimated to cost $700 million and is is entirely privately financed, according to Riker. Foster and Partners of London and DC-based Shalom Baranes serve as co-architects on the massive endeavor. Designed to achieve LEED Gold certification, "the design of the landscape, office and condominium buildings relates to the specific sun and wind patterns and the climate. The site and the buildings will also incorporate solar shading, harness rainwater and water conservation and planting," according to Foster's website. The second phase (the northern quadrant) of the project includes a hotel on property owned by Kingdon Gould, which he obtained through a land swap with the District Government in 2007. Gould gave up land on the site of the future Convention Center Marriott to get the northeast parcel of CityCenter. Riker indicated the 350-400 room hotel project was still in the planning stage, but that the team could select an operator "hopefully later this year." Washington, DC real estate development news

DC Officially Gets its Convention Center Hotel

Washington DC Mayor Adrian Fenty will hold a very public ceremony this evening to officially ink the legislation that will kick-start, finally, the District's Convention Center Hotel. In a 5:30pm ceremony, the Mayor will sign the New Convention Center Hotel Amendments Act of 2009, granting authority to spend $182m in TIF funds and $35m in bonds to go toward the construction, operation, and maintenance of an 1160-room, 14-story hotel opposite the lonely Convention Center. Technically, the bill amends the Washington Convention Center Authority Act of 1994 to further fund the Washington Convention and Sports Authority (WCSA), which will own the hotel, and instructs the WCSA to contract Quadrangle Development to get it built, and with Marriott to operate the new hotel. The Act authorizes Tax Increment Financing (TIF) and the issuance of bonds, to fund up to $206m in construction and operational costs. The remainder will be paid for by private developers. Funds derived from bonds and TIFs will go solely toward hotel expenses, and not into DC's General Fund. The District government has actively conspired to get the new beds as a rebuttal to National Harbor, which hosts a larger convention center and five, count 'em, five hotels surrounding it. Not to mention that a nice river runs by it. But back to DC, where the massive hotel will serve the convention center, and ensure the success of the convention center. Of course, it was the convention center itself that was supposed defibrillate the moribund Shaw neighborhood and spark development of the area, expectations that many of the convention center's original backers feel have not been met. Officials have maintained that construction could start as early as October, with about a three-year time frame for completion. Plans for the hotel went through many iterations before today, beginning with an even more ambitious plan that would have stretched the hotel over L Street and onto the next block for more than 1400 rooms. The city had also pursued a public-financed option that would have committed the Authority to picking up the $530,000,000 tab in full. The current version incorporates the historic American Federation of Labor Building (pictured) into the Marriott, which will otherwise overtake a swath of surface parking lots. The hotel will become the third largest in DC, and fourth largest in the region. The largest, at 2000 rooms, remains the Gaylord, at National Harbor.

Washington DC retail and commercial real estate news

DC Passes Convention Center Hotel Bill

The District Council today passed legislation that authorizes and helps finance a new convention center hotel. The bill provides for District financing of nearly 40% of the costs of the Marriott Marquis Hotel, which government and civic leaders have sought for years to provide services to support the city's investment in the convention center. The project has been on-again off-again for several years, with builder Quadrangle Development Corporation reducing the one-time size of the project and negotiating with the District, which by one recent plan would have funded the entire project in order to help kick start the neighborhood and use of adjacent Washington Convention Center. Council members have been motivated to alleviate the Center's obvious Achille's heal - its dearth of hotels in the immediate vicinity - while distancing themselves from the cost of the project. Councilmember Kwame Brown (at-large) said in a press release that though today's legislation was "not ideal," the overall result was positive. "We went from a 100 percent publicly financed hotel to a deal that requires the developer to fund the majority of the costs." The mayor is expected to sign the legislation, which could get construction going as early as this fall. Development of the four-star hotel is expected to cost more than $500 million.

Washington DC retail and commercial real estate news

DC Officials Pitch New Plan for Convention Center Hotel

The DC City Council’s Committee on Economic Development was briefed today on a new scheme devised to underwrite the fully-approved and shovel-ready, if financing challenged, Marriott Marquis Hotel. The city's newest plan for the mostly vacant property next to the Walter E. Washington Convention Center would get construction going by mid-October.

Today’s hearing was spurred by legislation introduced by Mayor Adrian Fenty, himself described as "tired of waiting" on the project, this past spring that would have effectively removed the project’s developer, Quadrangle Development Corporation, and made the new Marriott wholly city-sponsored. In the intervening weeks, officials from the Washington Convention Center Authority (WCCA), the Office of the Deputy Mayor for Planning and Economic Development and the Office of the Chief Financial Officer (OCF) have been feverishly working on a fiscal reconciliation that would preserve the public-private partnership.

"Given current economic conditions and the lack of liquidity in the capital markets…the District, led by the Washington Convention Center Authority and its partners at Marriott and Quadrangle, was forced to pursue alternative plans, including an option whereby the Authority would finance 100% of the hotel by selling bonds,” said recently appointed (though still unconfirmed) Deputy Mayor Valerie Santos. “We’ve made considerable progress on a new financing proposal, such that the new hotel would once again be largely privately financed.”

The crux of the proposal depends of the Committee’s authorization of an additional $22 million in city-backed debt to get the project going. This deal, presented to the District by the development team only last Thursday, would ensure that more than 60% of the hotel’s $537 million budget come from private funds, with DC footing the bill for the remaining costs. At present, lawyers from the OCF are currently exploring whether the project could also qualify for stimulus funds under the American Investment and Recovery Act, thereby offsetting the District’s burden in a year of record high spending.

The sense of urgency behind the proceedings is well founded, as Greg O’Dell, head of WCSA, said his operation is continually losing business to other comparably-sized convention centers, such as those in Denver and Indianapolis, which have on-site hotels and hospitality amenities. Furthermore, city officials also view continued development at Prince George’s County’s National Harbor as a direct threat to the Convention Center’s revenue stream – a feeling that has only been exacerbated by Disney’s recent announcement that they’ll be building their own mega-hotel/meeting space just across the river. That leaves the District, in the words of Councilman-at-Large Michael Brown, directly “behind the eight ball.”

Both the public and private sides of the development team will now spend the next two weeks finalizing the in-and-outs of their proposal before returning to the Committee on July 14th for a final vote. In the meantime, Committee members repeatedly stressed that the project’s fast track status will not delay other city development in the pipeline or cause any fiscal belt tightening.

“This will not cause us to postpone any projects that are already authorized…Nor will this require expenditures from the general fund. This is not going to be publicly financed deal,” said Committee co-chair and Ward 2 Councilman Jack Evans. This would not be the first partnership for Marriott and the developer, Quadrangle and Marriott jointly built a 224 room hotel together in Bethesda in 2004.

Washington DC real estate development news

Convention Center Marriott Awaits Zoning Approval

Final plans for a new Convention Center Marriott will head before the Washington DC Zoning Commission tonight for a public hearing. Now dubbed the Washington Marriott Marquis, adjacent to the Walter E. Washington Convention Center, it is expected to catch little to no flak, as it conforms to the non-residential zoning standard already in place, and has been pushed for by District officials.

Additionally, Marriott is developing the project in unison with the Fenty administration under a handy piece of city legislation entitled the Public Space Utilization Act – which allows the Mayor to "enter into lease(s) with private parties for the rental of the space above or below streets and alleys in the District." That Act, however, leaves final approval of any such lease to the Commission, which will tonight discuss how the plans on hand sync with city regulations concerning building height, off-street parking, and traffic flow – all areas Marriott’s draftsmen appear to have to managed meticulously.

The plans for Marriott’s parcel at Massachusetts Avenue and 9^th Street NW call for construction of a new 1,150 room hotel with a two-level underground garage. Additionally, the AFL building currently on the site will get an extreme makeover into a 42 room “boutique hotel” connected to the main facility at several junctures. The PEPCO power station eyesore on the block will remain (but possibly receive an aesthetic makeover) and an underground tunnel linking the Marriott to the Convention Center’s east end will be constructed. Marriott has taken on Quadrangle Development Corporation to assist in the development process and has enlisted TBS Architects and Cooper Carry Architecture to design the project. Marriott hopes to garner a silver LEED certification for their flagship facility.

It is, however, important to note that tonight’s meeting will not address the project’s second planned component one block to the north, on the opposite side of L Street NW. Sean Madigan of the Office of the Deputy Mayor for Planning and Economic Development told DC Mud in 2007 that Marriott had abandoned plans to build a smaller, secondary hotel wing on that site and had instead chosen to redevelop the AFL building. The development team has yet to present any concrete ideas about what may happen with that parcel.

Tonight’s meeting is being held tonight at the Office of Zoning Hearing Room (441 4^th Street NW, Suite 220) and begins at 6:30 PM. The proceedings are open to the public, so this would be a good chance to get a head start on booking a room for 2012 inauguration.

Washington DC real estate development news

Convention Center Marriott Tiptoes Forward

In an inconclusive show-and-tell session before the Historic Preservation Review Board on June 26th, Marriott International, Cooper Carry Architects, and EHT Traceries presented plans for the long-anticipated convention center hotel. During the informational presentation, the development team presented plans for a 1,100 plus room hotel at the corner of 9th Street and Massachusetts Avenue, NW, across from the Washington Convention Center.

The hotel, which will likely achieve LEED Silver Certification for its use of glass and brick, will take up the majority of the block, save the PEPCO power plant that supplies the White House with electricity, and the American Federation of Labor headquarters, a historic building that will remain. The hotel is intended to bring jobs and revenue to the city through traditionally high hotel taxes while serving Convention Center guests.

Norm Jenkins, Senior Vice President with Marriott International said the project was essential to the success of the existing Convention Center which has yet to meet city performance expectations.

"This is a great hotel site, but it's a tight hotel site, and we need to get 1100 plus rooms on the site in order to satisfy the needs of the Convention Center...the city sunk $850 million into this Convention Center several years ago and that project will never be optimized until you have this headquarter hotel," Jenkins said.

Laura Hughes of EHT Traceries raised the issue of the historic American Federation of Labor building on site and explained the history of the building, which was designed in 1915 and designated as historic in the 70's. State Historic Preservation Officer David Maloney cited the building as one of his staff's main points of interest in the project.

"I think the staff does not have any major concerns at all with what's been proposed. I think it's appropriate to expect that the facades of the historic building would be restored to their historic appearance, which I think it anticipated. The treatment of the public space in front of the building is also important...The other thing that's important about the historic building is integrating it with the hotel in a natural way...It's a small building relative to the size of the new hotel, so it's somewhat of a design problem to make it look as if it fits in a continuous streetscape..." Maloney said.

He added that the staff was concerned with how the design relates to the city and Massachusetts Avenue, the over 130 foot height of the project, the building being secondary to the Convention Center and the treatment of public space along Massachusetts Avenue.

"Mass Avenue, as you know, is one of the city's important L'Enfant boulevards. It is historically a residential boulevard really with green space in the front yards. And this building, because of its nature, has very difficult servicing requirements. But their staff, as well as the department of Transportation, have pushed the hotel folks to try their hardest to make sure that there is a sense of continuous green space maintained along Mass Avenue," Maloney said.

While the meeting concluded with accolades from staff members, the board still had questions about the building's width, appearance, and name.

"My last point, slightly in the jocular vein, is why do we use all of these aristocratic French revolutionary terms like marquis and Monaco? Wouldn't it be nice to have a democracy? I mean I'm not saying you name it The Log Splitter, but I mean, maybe the President..., said Chairman Terch Boasberg, to general laughter. The developer will return in the coming months for concept review and permitting.

Steven Siegel from the Office of the Deputy Mayor of Planning and Economic Development noted the urgency of the project and said the Mayor asks about its status each week. "He asks how the projects going. And every time I tell him the date of delivery, he says that's not soon enough. So we're all working very hard to make sure that this process moves forward smoothly. And, you know, it's obviously important to the success of the Convention Center to make sure that this hotel is delivered as quickly as possible and as soon as possible," he said.

The project is on the HPRB's July "List of Cases Filed for Consideration." A final agenda for the July 24th meeting will be available on July 18th. The Atlanta-based architects are also responsible for Bethesda Row and the National Gateway Hotel Complex in Arlington County.

DC Announces New Convention Center Site Agreement

Mayor Adrian Fenty announced plans today for one of the last remaining parcels of land on the site of the old convention center. Under a new agreement, the city will allow development of a 400-room "high-end" hotel and 100,000 s.f. of additional retail space on the 53,000 s.f. plot of land now known simply as "Parcel B". This portion of the site had previously been reserved for construction of a library, but the District had not made any final decisions on the facility and did not want to further delay what is being designed as a "new city center."

(Dcmud's information on "Parcel B" is too new to have renderings - the rendering shown is of the southern parcel.)

Standing in a corner of the current Convention Center, overlooking the site of the old one, Fenty said the District reached a deal with developers Hines Archstone to lease the site for 99 years. The District had previously cemented a deal with Hines Archstone for the southern half of the site - a project estimated at $850 million that will add 350,000 s.f. of retail space, over 670 apartment and condominiums with at least 134 affordable units, and 465,000 s.f. of office space between New York Avenue, 11th, H, and 9th Streets NW.

“The one thing the District is missing that so many other large cities have is a bustling area where people come after work to shop or eat or to hang out, a city center.” Fenty said. In addition to the office, retail, and residential space, the project will include an additional 1.5 acres of public open space. There will be a park in the northwest corner as well as a central plaza between the residential buildings on the corner of 9^th and H streets.

The “B parcel", bound by New York, 9th, and what will be 10th Street, was originally considered as a potential site for a museum or library in order to attract more families. Today, however, Fenty said that while the District is still “working aggressively” with the Library Board, there is a significant amount of programming under the current plan to attract DC residents to the site."

As the master developer, Hines Archstone had the first right of refusal to lease the B parcel from the District if the city chose not to locate a library on the site.

“This area is surrounded by museums; the Newseum just opened a few blocks away, the Portrait Gallery, the Spy Museum…we want this place to provide a social atmosphere outside their homes where residents can come and sit without having to sit at a café or pay to eat or drink,” Fenty said.

Kingdon Gould III acquired a parcel on the Northeast corner of the site - the last site to reveal development plans - in a land swap that the city conducted to facilitate construction of the Marriott next to the new Convention Center. The Parking Management, Inc. president has his own plan for the site, but it must be "consistent with the entire site's master plan."

While retailers have not yet been announced, the developer has committed to devoting thirty percent of retail space to merchants with six or fewer stores in the United States, but will focus on a wide range of grocery stores, restaurants, fashion stores, and entertainment or performance venues. There are also plans for one larger retailer like Nordstroms or Macy’s; Fenty and the development teams will be meeting with companies in the coming weeks, but a final announcement is not likely for about six months.

The project will generate 3,000 development-related jobs and 2,500 direct permanent jobs. It will also generate a projected $32 million a year in annual direct tax revenues. According to developers, the District will receive more than $200 million in consideration for the land as part of the land lease including a minimum of $28.5 million in lease payments, $55 million to provide affordable housing on site, and $48 million in payments for new infrastructure. Two new streets, I and 10th, will be constructed through the site.

When asked about the likelihood of delivering the project in a timely manner given the not-so-exuberant state of the economy, Councilmember Jack Evans, D-Ward 2, said the District has not been affected by the economy and that this project’s success would be no different than that of other D.C. projects like the Nationals Stadium.

“The Southwest waterfront looks pretty good. Poplar Point is off in the distance, but Clark, the main developer hasn’t had problems getting the money they need. There is such a strong interest in the development of the District that as long as that interest remains, these projects will stay on schedule,” Evans said.

The first phase of the project, which includes the office, apartments, and condominiums, will begin in the second quarter of 2009, while the entire project will be completed by the end of 2011.

Evans added that this summer the city is planning to set up a large screen in the parking lot on-site to continually broadcast the Olympic Games. He said the city’s goal is to use the backdrop of the Chinatown arch to attract families and residents to the area.

“This is the most exciting property on the East Coast,” he said.

Old Convention Center Site, New Designs

Wondering what was going on at the old Convention Center site? We were too, so we asked around. Plans for the Old Washington Convention Center Site Redevelopment continue to move forward in the design phase, as Developer Hines Archstone, along with architects Foster and Partners (of London) and Shalom Baranes Associates square away more details on their 10.2 acre site, bound by New York Avenue and 9th, H, and 11th Streets.

The $850 million office, retail, and housing redevelopment deal is the largest undeveloped property south of Massachusetts Avenue, in what DC's administrators hope will be a thriving, mixed-use, pedestrian-friendly center.

Included in the plans are, at a minimum, 25o,000-s.f. of retail, two office buildings totaling 465,000-s.f., two apartment buildings, two condominium projects, and 1900 parking spaces in underground garages. Each of the Class "A" office buildings will rise 11 stories and offer - uniquely for DC - two levels of retail. The two buildings (see rendering below) will be connected through an enclosed glass bridge at the third story. Each is designed to include double height lobbies with stone walls and floors, and an exterior shaded curtainwall and an atrium on each will face each other.

The residential portion will be divided into two apartment buildings with 455 rental units, and two condo buildings with 215 for-sale units, 20% of which will be affordable housing. Each rental building will be eleven stories high with one level of retail, with a pool on the fifth floor of one. The exterior will be adorned with terra cotta precast panels and a curtain wall system. Residents will apparently have ample terraces and courtyards, with additional landscaping on the roof. Like the offices, the pair of apartment buildings will be joined on the second story with an enclosed pedestrian bridge.

Moving on to the condominiums, at ten and 11 stories in height, architects again envision two full floors of retail, joined on the third story by, yes, an open pedestrian walkway. The building will also feature two floors of retail and elaborate landscaping on the roof, terraces, and courtyards. Two new streets will be created to have the effect of shrinking the blocks and providing better pedestrian access for the retail, and the northwest corner of the parcel will feature most of the 1.5 acres designated as open public space. A central plaza will sit in the middle of the four residential buildings, with fountains and landscaping, connecting to the street with paved pedestrian alleyways.

This past November, the city traded a parcel on the northeast corner of the site to developer Kingdon Gould III for a piece of land close to the new convention center, on the site now planned for the much anticipated Marriott. What Gould will choose to do with this plot of land is still unclear, as is an additional 100,000-s.f. on the site is still controlled by the city, according to Sean Madigan of DC's Office of Planning. Originally, talk of putting in a new central library was on the table, a goal of former Mayor Anthony Williams, although the city is now considering new options: additional retail in the form of an anchor store, another mixed-use development, or an entertainment venue. The city has not ruled out the possibility renting or selling the land to a developer, a decision that will reportedly be made within the next two or three months.

Hines Archstone is hoping to receive the Gold or Platinum rating for LEED certification on the office buildings, while expecting a Silver rating for the residential buildings. The project as a whole was accepted into the LEED Neighborhood Development certification, a pilot program of the U.S. Green Building Council.

"This is a tremendous milestone for the city and the Hines Archstone-Smith team," said William B. Alsup III, senior vice president for Hines Interests. "With the closing of the legal documentation with the City and approval of the schematic design, we will continue to work collaboratively with the city and its agencies to complete the detailed plans and specifications and secure the necessary building permits to enable us to begin construction by this time next year."

"This project is going to be a true city center - our downtown retail anchor - befitting a world-class city," Mayor Adrian Fenty said in a press release recently. "We are creating a place, designed by one of the world's most pre-eminent architects, which will complete the recent transformation of our downtown." Space will be offered to both national and local retailers, with 30% set aside for those with six or fewer stores in the country. Over half of the 2,500 new permanent jobs created are required to be given to qualified DC residents.

Planning has been taking place for over four years at this point. After months of hearing community input, the Deputy Mayor's Office of Planning and Economic Development approved the master plan for the site in October 2006. The District and Hines Archstone closed on their deal in December, which included approval of schematic design, zoning, and financial details, and presented revised designs and plans on January 10. Developers are now putting the final touches on designs, and will begin bidding and permitting by November. They expect to break ground in January 2009, and after the downtown endures a 35 month construction period, we can all look forward to completion in July 2011.


"This long-awaited project will set new precedents and rival the best live, work, shop, and play urban mixed-use developments the nation has seen to-date," gushed Ken Miller, senior vice president of Archstone-Smith. "This development will further the transformation of our Nation's Capital into one of the most thriving, dynamic, and culturally rich cities in America."

DC Announces New Convention Center Hotel

Washington DC Mayor Adrian Fenty announced today that the District has signed an agreement with Marriott International to build a new hotel at 9th and L Streets, on the west side of the new convention center. Marriott had been planning on as many as 1400 units at the site, and has been expected to begin the project since at least early this year, but will now scale the project back a notch, building approximately 1140 rooms and not begin construction for at least a year. The hotel is expected to open in 2011.

The two-acre site, combined from 2 parcels separately operated by the Washington Convention Center Authority (WCCA) and Kingdon Gould III, is currently mostly vacant and is being used as a parking lot. Gould's portion of the site is being traded for a portion of the old Convention Center site that the District now controls. Gould was not part of the agreement today, but has agreed in principal to terms of the transfer. Marriott has agreed to begin the planning process immediately, incorporating the land south of L Street and north of Massachusetts Avenue, along 9th Street. Sean Madigan of DC's Office of Planning says the site plan will no longer include the parcels north of L Street, which Marriott previously acquired in expectation of building into the final designs, but will likely incorporate the historic office building at the southeastern corner of the lot into the hotel. The utility building at the northeastern corner of the block will remain. Madigan said the transaction has been signed and will be executed "shortly", but would not speculate on a timeframe.

The entire transaction is valued at about $540m, of which $134m will be contributed by the DC government through Tax Increment Financing (TIF) in the form of bonds issued by the WCCA and repaid by taxes generated through the hotel. The city will lease the site to Marriott for 99 years, on which Marriott will build and operate the hotel.

Furthering DC's new legislation for the construction of 'green' buildings, Marriott has agreed to meet the District's standards with a building that will be LEED certified, meeting the U.S. Green Building Council's "Silver" standard. The hotel will include 100,000 s.f. of meeting space and at least 400 new parking spaces, but it is unclear if retail will be included in the new design.

DC Lays Out Billion-Dollar Plan for Old Convention Center Site

It took five years of planning and much wringing of hands, but DC officials and developers have finally delivered a master plan for the 10.2 acres of prime real estate where the old Washington Convention Center once stood. This major parcel (bounded by 11th Street to the west, New York Avenue to the north, 9th Street to the east, and H Street to the south) will soon, it is said, be home to nine buildings, containing almost 400,000 square feet of office space, 770 apartments and condominiums, and about 300,000 square feet of retail. In addition, developers envision a $180 million library, and hope to reopen long-closed 10th and I Streets. Two green plazas are also being considered for this land, for hosting concerts and events. Ground is expected to be broken in 2008, with project completion slated for 2011.