Downtown Silver Spring Site Shoots for Green Office Building

In a plot to lure tenants away from downtown, DC, Potomac-based Willco Companies is developing a 13-story, 190,000 square foot, class A office building in downtown Silver Spring, Maryland, at 8621 Georgia Avenue (the corner of Colesville Rd). The goal is to achieve LEED silver status with a green roof (increasingly common in new office buildings in DC). Is there a demand for class A office space in times like these? Willco will certainly find out...

Replacing what is currently a parking lot, the building will top out at the maximum allowed height, 143 feet, and will provide 275 parking spaces in its five-story parking garage - one level below, four above ground. Proximity to the metro was a factor in the plan which offers 40% fewer parking spaces than allowed at max; an effort to promote mass transit and reduce local traffic. The remaining 8 stories above the garage will be the office space.

In addition to trying to secure an anchor tenant to fill the majority of the office space, Willco is trying to bring in a restaurant and another service-oriented retailer for the planned 6,000 square feet of retail on the ground floor (featuring two-story ceilings). Richard Donnally, the lead architect on the project and Senior Principal at Donnally Vujcic Associates, indicated that the developers are in talks with a "few firms," but nothing is secured and in writing. Ditto on the restaurant.

The team has submitted its site plan to the Montgomery County Department of Parks and Planning. Wes Capps, an Engineering and Construction Supervisor at Willco, said they anticipate a 2011 completion date assuming the approval process moves along without any issues.

Park Place Opens atop Georgia Avenue Metro

Park Place, perhaps Georgia Avenue's most momentous new development, was celebrated in a ribbon-cutting ceremony today. The new apartment building, a $71 million, 200,000 square-foot housing and retail project atop the Georgia Avenue-Petworth Metro station, was built by Donatelli Development. Donatelli teamed with DC-based Gragg & Associates to work on the project, a 161-unit residential with 17,000 s.f. of ground floor retail. Mayor Fenty issued a press release and said the opening of Park Place meant that "economic development on Georgia Avenue has finally arrived." Amen. Though construction is still incomplete, the development will soon add 156 rental apartments and 5 rental town homes. The building will offer 20% of the space as affordable housing, something the community has long desired, according to Fenty. Residents will also have access to 187 underground parking spaces in addition to the Metro. The ribbon cutting ceremony took place on the landscaped roof, which boasts views of the National Cathedral, Capitol Dome, and National Monument. 

The retail space will be divided into 8 bays and the occupants will include a cafe, two sit-down restaurants and potentially a wine store. Local businesses from the U-Street area (familiar with Donatelli's project there) are considering coming to the area to build their second or third DC-location in the Georgia Avenue/Petworth Community, according to the developer. Funding for the project came from several sources including $15 million from Canyon Johnson Urban Funds (a partnership with Magic Johnson), $55 million Citibank and $2 million of Gragg's and Donatelli's own coffers "because of the financing state." Donatelli was awarded the low-income supporting contract without govt. subsidy by the Office of the Deputy Mayor for Planning and Economic Development through a competitive process in 2004, and construction began in 2006. The project was originally intended as a for-sale condominium, but the meltdown in condo prices in Petworth forced the conversion to for-rent units. Chris Donatelli has had a busy few weeks, just last week we reported on his planned development adjacent to the Benning Road Metro. Donatelli, which also revitalized Columbia Heights, is building another, smaller apartment building across the street from Park Place.

Washington DC retail for lease and commercial property news

Coming Soon(ish): Wheaton Town Square

Spurred on by what they've deemed the "success of Silver Spring redevelopment" and "stagnation" in their own front lawn, Montgomery County's Wheaton Redevelopment Program (WRP) is gearing up to issue a solicitation for offers for a large-scale, mixed-use Town Square project on what is currently a collection of Washington Metropolitan Area Transit Authority (WMATA) bus bays next to the Wheaton Metro.

"We were hoping [to get the solicitation out] this summer and we think that maybe that's still possible. Once we go the WMATA board, it'll much more realistic to put together a schedule," said WRP Director, Rob Klein.

"We'll go to the community before and show them the elements that we're considering. But, by and large, what we're aiming to do is keep the requirements to a minimum, so that we hire a development team based upon their expertise, their experience, their wherewithal and the creativity they’ve shown with past projects. Then, like Silver Spring, [they'll] work with the stakeholders."

Using recommendations made by the International Downtown Association (IDA) as a model, the WRP is aiming to redevelop the County-owned, triangular site (bounded by Georgia Avenue, Viers Mill Road and Reedie Drive), along with other area parking lots and few select private parcels “that make sense for redevelopment,” via a public-private partnership. Though the ultimate mix of uses won’t be settled upon until a developer is selected, the WRP’s tentative vision sees the Town Square as a new arts and retail destination, ala Silver Spring’s revitalized downtown; part and parcel with that will be a new Metro-centric location for the Wheaton Regional Library.

"[The library] relocation was recommended by the [IDA], instead of proceeding with the renovation of the existing library…If the library comes downtown, the recommendation was that an arts venue be part of it. Another thing we’ve thrown out is possibly an auditorium will be part of it. All that would have to be tied into a massive redevelopment solicitation,” said Klein. The idea of shuttering the current library, however, has drawn the ire of many local residents and a campaign is now underway to preclude the possibility of a move.

Nonetheless, area bibliophiles have plenty of time before their books are due once and for all, as there’s no definitive timeline for the project as it now stands - but not for want of effort by WRP. Program staff will appear before the WMATA board this week to seek a “letter of understanding” from the agency with regard to use of the bus bay parcel.

Furthermore, the Town Square’s fate is linked to that of the Wheaton Sector Plan, first drafted in 1990 and now under revision, that goes before the Montgomery County Planning Board later this summer. According to Klein, changes to the updated Plan will “work in tandem” with the goals of his team, as they select sites for redevelopment, deal with issues like the library and court interest from the development community.

“This [project] is a strange hodgepodge and I have not seen one like it before…This is going to be tricky,” he said.

Georgia Commons Starts Up in Petworth

The contractors of Meridian Builders joined Mayor Adrian Fenty and Ward 4 Councilmember Muriel Bowser yesterday to oversee the demolition of an old Petworth carpet store at 3910-3912 Georgia Avenue, NW. It’s a site that will soon host the Georgia Commons – a 30,000 square foot, mixed-use project from Jair Lynch Development Partners and Affordable Housing Partners with 119 out of its 130 new apartments geared towards working families. But the developer stresses that this is not your typical affordable housing project.

"It’s generally for families of four making 50, 60, 70 thousand dollars – that’s the market we’re talking about. It’s much different than the general impression of what people think low-income means," said developer Jair Lynch. "We think the remainder may be higher in the 80 to 90 thousand range. It’s not a drastic change.” 

 

The Office of the Deputy Mayor for Planning and Economic Development (ODMPED) selected the development team – which also includes EDG Architects and Frank Schlesinger Associates - two years ago following a competitive solicitation process. With features including a green roof, high efficiency heating and cooling systems, and "green screen" shielding, the project received an extra boost courtesy of the LEED Neighborhood Development pilot program, which acknowledges green and neighborhood-building features for buildings that fall short of traditional certification. "This is one of the few projects in the country that was admitted into it," said Lynch. "They're moving towards acknowledging and certifying projects that are beneficial to neighborhoods, rather than just giving ratings for a building's efficiency...I think there are only three or four [such projects] in the District versus a pool of under of fifty across the country."

The seven-story, $35 million development will also feature a new ground-floor location for Mary’s Center for Maternal and Child Care– its third in the Washington area – that will provide physical, mental and oral health services. With “guaranteed care” and twice the patient capability of their current locations, the new facility will not be just a free clinic, but a primary care center for both middle and working class residents alike. Sharon Baskerville, CEO of the DC Primary Care Association described it as “a means of leveraging the city’s investment with private dollars.”

Apart from gathering those community benefiting features together under one roof, the past 18 months did provide some other unique obstacles for the development team. While ODMPED had to provide $5 million in gap financing to get the project moving, a laundry list of issues had to be addressed before construction could proceed. Said Lynch:

Whether it was the 18 lawsuits that the Deputy Mayor’s office worked diligently on for a year and a half, whether it was getting the permits out of [the Department of Consumer and Regulatory Affairs] with Councilmember Bowser, whether it was the mandatory exclusionary zoning that we anticipated coming, whether it was the collapse of the financial systems for the last six months, this project has persevered time and time again. We’re not quite there yet, but we hope in the next month, now that [the Housing Finance Agency] has their board members, [the Department of Housing and Community Development] is committed and the rest of our partners are here…we’ll start be able to this wonderful new project.

Georgia Commons is just one of numerous Georgia Avenue projects that have steamrolled ahead in recent months. This past March, the Neighborhood Development Company opened the 72-unit Residences at Georgia Avenue, while, in approximately a month and half, Donatelli Development will hold a ribbon cutting for highly the anticipated Park Place project. To Mayor Fenty, himself a former Ward 4 councilmember, it’s evidence that change has taken hold on the prominent Northwest thoroughfare and in the surrounding Petworth neighborhood.

“On this four block stretch, you’re probably talking about 400 new apartments…For seventy years, not one new apartment was built on Georgia Avenue,” said Fenty. “Just in the past couple years and leading into the near future, there has been lots of development…When [this project] is finished, it won’t only be attractive. It’ll be a fantastic asset and resource for the community.” Georgia Commons is tentatively scheduled for a fall 2010 opening.

Washington DC commercial real estate news

Residences Open for Business on Georgia Ave.

The Neighborhood Development Company (NDC) officially cut the ribbon today on Petworth's newest residential project: the Residences at Georgia Avenue. With mortgage interest rates hitting an all time low, and condo prices having dipped, homes may be more affordable than ever; nonetheless, with Mayor Adrian Fenty on hand today, the developer celebrated the $28 million building at 4100 Georgia Avenue, NW, 72-units of affordable housing and a new Yes! Organic grocery store, scheduled to open this coming summer.

"This project is a perfect example of how we can leverage our resources to both greatly improve the vitality of Georgia Avenue and provide residents with the kind of high quality and convenient neighborhood amenities they both expect and deserve," said Fenty.

The District's Department of Housing and Community Development and Housing Finance Agency cumulatively contributed almost $20 million towards the project; NDC will also receive more than half a million dollars in tax incremental financing from the city for their next scheduled project, The Heights on Georgia Avenue. DCmud recently discussed NDC’s upcoming slate with founder and CEO, Adrian G. Washington in a recent interview.

Industry Insight: Adrian G. Washington of the Neighborhood Development Company

As the founder and CEO of the Neighborhood Development Company (NDC), Adrian G. Washington has overseen numerous development initiatives in the District with a primary focus on boutique condominiums and affordable housing in Columbia Heights and along a resurgent Georgia Avenue corridor. In between working on a current slate of projects that includes the Residences at Georgia Avenue, the Heights on Georgia Avenue and a proposal for the mixed-income redevelopment of the Park Morton public housing complex, Mr. Washington spoke with DCmud about the state of development in the District of Columbia, the challenges of affordable housing and what the future of the residential market. 

Can you give us an overview of the company? 

I’ve been doing this for about twenty years. I started out as basic as it gets - rehabbing brownstones – and moved up from there. Then, I worked for a big corporate real estate company called the National Housing Partnership and we did a lot of affordable housing stuff. I started NDC about ten years ago by doing really the same sorts of things – rehabbing brownstones. By the next year, we were doing 4-unit buildings, then 10-unit buildings and it sort of just got bigger and bigger. It really kind of took off about five years ago. I brought in my partner here and a couple of junior partners, a couple of vice presidents who really brought it up to a professional level. We started doing bigger projects. We were lucky to be on teams that got selected to do CityVista and the old Convention Center site, now called City Center. We really kind of rode the condo boom when it was hot; we had a lot of really cool boutique projects. So it started out focusing on Columbia Heights because we’re always emerging neighborhood focused. When Columbia Heights became more established, we sort of shifted it. So for our last projects, we’ve done a lot of stuff up and down Georgia Avenue – projects like the Lofts at Brightwood and Lamont Street Lofts. We’ve also done some affordable rental projects like the Residences at Georgia Avenue. As the economy shifted, we started doing more affordable rental projects. Our Heights at Georgia Avenue project will be almost like a sister project – same size, same kind of concept with affordable housing on top and retail on the ground floor. Then we proposed on the Park Morton site and we’ll also be proposing on two of the DC school sites. We’ve teamed with EYA on the Hines School site and with Equity Residential on the Stevens School site. 

Indeed, most of your new construction seems to be focused on Georgia Avenue.  Are you still bullish on the area? 

We hope so. We like it. We’re headquartered here and I live about five minutes away. We’ve always been focused on this area and we just saw it as the next “cool neighborhood.” You have Columbia Heights to the east and with Georgia being a Great Street, the city’s been really interested in what we’re doing and certainly helped out on a lot of things. We’ll be coordinating with them for some of the infrastructure improvements with Great Streets. It’s a really great transportation corridor. It’s got some good parcels that are available and, particularly at the start, there were some great industrial buildings that you could convert to lofts. There's not as much now, but it’s a great area and we kind of adopted it as our backyard. We really wanted to be focused on particular neighborhoods, which is where we are. 

How does the current state of the market affect a company that’s primarily focused on affordable housing? 

I think it’s been good and bad. When things started getting tougher, most people - me included – said affordable housing financing is not going to be affected by the credit crisis. Well, in fact, it has. The most popular mechanism for financing affordable housing is the low income housing tax credit, where essentially you get credits that allow companies to reduce their taxes. Well, a lot fewer companies have taxable gains these days, so the market for that – while it hasn’t crashed – has declined considerably. Also, the District a lot of times provided gap financing. A lot of that comes from the Housing Production Trust Fund that is funded by sale and recordation taxes. At the same time, the gaps have gotten bigger because construction costs went up and land values went up. The District used to be fairly flush and now they’re pretty tight. That’s been a little challenging, but the good thing is that the demand is still there. Land prices are starting to retract a little bit and construction costs are starting to mitigate. So it’s much tougher, just like private development is much tougher. But I think DC is really strong market with basic fundamentals like what you can rent things for and demand. I really haven’t seen things as bad yet as I read in the papers and I’m optimistic because demand for things like condos and rentals really haven’t declined as much as the headlines suggest. 

One crucial element of development is retail. CityVista, of course, has a Safeway and your newly completed building, the Residences at Georgia Avenue, is planned to include a Yes! Organic Market. How do you go about making neighborhoods once thought undesirable attractive to retailers?

Those were two very different cases. In terms of CityVista, Safeway was part of the team right from the beginning. Actually, before we became part of the team, Safeway and Lowe Enterprises, our partners, were already linked to that project. Safeway saw it as a great place to put a new urban model Safeway. The thing with Yes! Organic is that we approached them very early on. We didn’t have a broker or anything. They just saw it as a great location. We had some personal connections with Gary Cha, the head of the company, and, as matter of fact, he liked it much that he wanted to buy it because he saw the potential of the neighborhood and said, “I want to get in on the ground floor.” That’s how we’ve done it. We had the Meridian Restaurant at our Lofts at Brightwood project and it was the same type of thing – a really entrepreneurial retailer that was willing to take a chance and invest in the neighborhood in the same way we were. That’s how we traditionally work – not through brokerage channels, but with retailers who’ve really gotten it and want to get in early on a project and help design the project to meet their specifications. It sort of goes together. 

At this point, it’s safe to say that CityVista has been a success, while other projects in the immediate area have stumbled. What would you chalk that up to? 

 It’s funny because we just had a case study that ULI did and they put together all the people –developers, contractors, lawyers and architects. One of the things that we talked about was doing a true mixed-use project – some condos, some apartments and retail. It’s really hard from a construction standpoint, from a legal standpoint, from an architectural standpoint, but if you get right and you get the right mix…synergy is a corny term, but it really applies to this. We got this great Safeway, we got Busboys and Poets and we have a real mix of retailers at the base, all of which people really want. These kind of lifestyle-type things help it be a place where people really want to be. NoMa is still kind of an emerging neighborhood and people want to feel like they have a sense of community – a place where they can live, they go downstairs to shop, they can go out to eat, they can go to go the gym. And not just a little in-house gym, but a really cool gym like Results. It’s a really cool place and what we’ve seen is that it’s drawn people from all over. You think it would be people who live in different parts of DC, but we have people from Prince George’s County and Virginia. It’s just been a nice sort of synergy and I think the rental component energizes the condo component and the condo component energizes the retail component and vice versa. And I think it’s priced right. It’s not entry-level pricing, but it’s not super-luxury pricing either and a lot of people can afford it. We knew we were going to sell like that.

NDC has a record of vying for some prominent District issued RFPs, including Park Morton, CityVista and 5th and I. How would you characterize your relationship with the Fenty administration and the Office of the Deputy Mayor for Planning and Economic Development? 

I’m not an insider or anything, but I value and appreciate what they’re doing and I’d like to think that they feel the same about us. I feel that our goals converge. They’re interested in developing Georgia Avenue and we are too. They’re interested in promoting local businesses and I live in the city, I work in the city and I hire people in the city. It’s matter of being on the same page and understanding their challenges. For me, having been inside the government at one time, I understand what it’s like to be on the other side of the table - the challenges that you have from a political perspective and from a legal perspective. A lot of times, you go through these long agreements with people and can seem like, “Why are they asking for that? It makes no sense.” Having been on the other side of the table, I understand that they have to get certain things through certain offices and fiscal years and so on. Having spent a bit of time in their shoes helps me understand what their hot buttons are and what’s important. That helps the negotiation process. The important thing is that we share the same goals. We want improve neighborhoods. We want to work with the community. Like most developers, we feel that we have to reflect what’s going on and what people are looking for. 

Are there any details that you can share about your proposal for the redevelopment of Park Morton? 

The first thing that I really want to emphasize is that we’ve teamed with a really great partner. They're called Community Builders. They’re Boston-based, but they have a DC office. They’re really the leading non-profit developer in the country. They’ve done over 20,000 units in terms of projects. They really specialize in these sorts of difficult public housing transformations. They have a great human capital program and do things like job training, education and public safety – things that affordable housing demands. Our team, with our local knowledge and our skill, is a great combination. Essentially, we stuck pretty close to the plan that was developed when we were part of the task force that designed the original Park Morton plan that was in the RFP submission. They’re looking for a three-phase plan – roughly a third, a third, a third - that will provide homes for all the current people who are there and then mix them up with moderate income and market rate. It’s, give or take, 500 units of housing. We’ll be demolishing this area [along Park Road] for Phase I and building a total of 195 units. We’ll have [a separate] building dedicated to senior citizens and mixed-income units. Prior to demolition, we would provide for the relocation of families that are in there now and put them in units in and around the area, so they could stay in the neighborhood. We’d then demolish the [second area along Morton Street] and move people into the first phase, along with new people from outside the community and build another roughly 250 units. Then, finally the third [along Lamont Street] would be building condominiums. By that point, we think the neighborhood will have improved, the market will have improved and that it would a great place to do a condominium building. 

Many owners of undeveloped property are now caught between inability to get financing and maturity default. How is NDC positioned to make it through the next two or so years? 

I think we’re well positioned. We’re either lucky or smart. I’m happy to take either one. We’ve done condo projects over the years and about two years ago, we began to sort of feel something in the air. Four years ago, if you built something, people were lining up. As far as two years ago, things began to slow down and we decided to decrease our exposure to condos. We did a couple of projects, but they were very value priced and we were able to sell out of those. Right now, we have zero exposure to condos. Our project across the street, the Residences at Georgia Avenue, is a moderate income rental. We’re in lease up now and we’re getting tons of responses, so we feel very good about how that project is going to perform. The Heights on Georgia Avenue that’s basically across the street from Park Morton, we just got through with PUD and we’re just looking for financing now. Again, we think we’ve created a product that’s moderately priced and we’re pretty optimistic that we’ll get financing for that. We think that we’re in a very good place. We’re lucky to be part of CityVista that, amidst all the problems, is performing well. We’re well-positioned and I think it’s a great time to be a developer. A lot of newcomers and weaker competitors will be going away. It’s more challenging – you need more creativity – but that’s kind of cool.  

Is it possible to be profitable selling new construction there in this environment? 

I think so. It has to be the right place and the right design. And one of the really crazy but cool things is that things change so quickly. Our focus has been on the kind of building - it’s called podium style - that has first floor retail with four or five stories of residential above it. It’s a stick-built product. What happened in the last few years is that the delta between concrete buildings and stick-built really expanded. This was kind of a nice sweet spot in terms of building a building that’s six-stories high, but the cost per square foot was a lot lower. That was the threshold and, if you wanted to go any higher than that, you’d have to go with concrete. We really looked at this as model for the Heights and Park Morton and we’ve seen prices for this come down. What we don’t know is if concrete construction is going to come back down and become much more competitive. You’ve got to moderate, just from a supply and demand perspective – not just in the US, but around the world. A lot of stuff is clearly not going to get built. Commodity prices, concrete construction, oil and gas, steel – all that’s come down and the demand for labor has come down as well. 

Do you see NDC starting any market-rate condominium projects in the near future? 

Oh yeah, absolutely. Whether you’re condo or rental, I think that DC is great place to live. I think in terms of a competitive advantage, with the new administration and the Stimulus Package, that the city is becoming more in demand. I liked the city before the market went down and I like it even more now. I think that supply and demand is going to come back into balance. We’re seeing things like the month’s inventory start to come down. Real estate is cyclical. We had a particularly strong up cycle and now we’ve had a particularly strong down cycle, but it’s going to come back. Just in terms of how long it takes to do things, if you look at the demand, I think the trade-up buyer has kind of decreased a little bit and speculative investment buyer has gone away completely. But that first-time buyer and the price point from three to five hundred thousand has pretty much stayed there. But nothing’s getting built. Nobody, for any kind of project of any significant size, is starting. There’s nothing in the pipeline now and the way these projects work is that if you’re not in the pipeline now, you’re not going to deliver for at least three years – more like four or five. As the economy straightens itself out and demand is solid and starts to increase, the supply is going to be way low. Things that will be delivering in two, three or four years, I think there will be a great market for. We could easily do a boutique building of under a hundred units in that time frame. I’m really bullish on that.

Washington DC commercial real estate news

The Residences Delivering on Georgia Avenue

The Neighborhood Development Company’s Residences at Georgia Avenue just finished construction, thanks to Hamel Builders. The 72-unit "affordable" apartment building sits in the heart of Petworth at 4100 Georgia Avenue, NW.

Financed by $28 million from a laundry list of contributors, including the District of Columbia Housing Finance Agency, the District of Columbia Department of Housing and Community Development, the Wachovia Affordable Housing Community Development Corporation and MMA Financial, NDC founder Adrian Washington says, “The Residences is a shining example of what can be accomplished when the private sector works hand in hand with the community and the District government to move neighborhoods forward.” The project was designed by local architects, Wiencek and Associates.

The project, which broke ground in September 2007, will also be home to the District’s second Yes! Organic Market in as many years (the first opened at PN Hoffman’s Union Row development in November). The new, 10,000 square foot Yes! - Petworth’s first boutique grocer – will open this coming summer following completion of its own independent, interior build-out.

In the meantime, the Residences at Georgia itself will become an official addition to the Georgia Avenue corridor after a ribbon-cutting ceremony – to be attended by Mayor Adrian Fenty and Ward 4 Councilmember Muriel Bowser - on March 31^st at 10:30 AM.

Washington DC real estate development news

Georgia Avenue Parcel and Plans Up for Sale

Dying to buy land on Georgia Avenue, but just can't find a vacant lot? Now's your chance. Georgia watchers know that late last year a sign was erected at the intersection of Georgia Avenue and Kenyon Street, NW (3205 Georgia Avenue) proclaiming the imminent construction of a new mixed-use development, courtesy of a team known as the “Carthage Group.” Like many promising parcels, development did not materialize. The developers were unreachable, their displayed web address led nowhere, and shortly thereafter, both the sign and chain-link fence surrounding the site disappeared overnight.

Now, with the Carthage Group out of the picture, the land is now in hands of one Mike Noorishad – perhaps best known to area residents as the one-time owner of Mike’s Chicken at 1110 U Street. Not only has Noorishad put the parcel up for sale along with the previously approved plans – designed by Ajalli Architects of Maclean - for a residential, office and retail complex at the site.

According to Nasir Bajwa of Sperry Van Ness Commercial Real Estate Services, the plans on hand call for a 21,424 square foot, 5-story building with 4,500 s.f. of ground floor retail and 4,137 square feet of office space, topped off by 9,789 square feet of residential (or 18 units) – all of which was previously approved and permitted by District authorities in early 2008.

If there are any takers for Sperry Van Ness’ $3 million list price, the untitled project – formerly the Capital Building by Carthage - would be the southernmost entry in ongoing redevelopment of Georgia Avenue with a beachhead by other projects such as Park Place, 4136 Georgia, Lamont Lofts and the Heights. Hurry, act now, time is running out.

Washington DC commercial real estate news

Prospects Announced for Park Morton

Following last summer's Request for Proposals, Deputy Mayor Neil Albert has announced the three development teams contending for the $170 million redevelopment of the Park Morton housing project in Northwest Washington. Per the specifications of the RFP, all three are vying to reinvent the troubled public housing complex with more than 500 new units of affordable and market-rate housing and 10,000 square foot park.

The teams named by Albert are the Park Morton Partners (Pennrose Properties, LLC, FM Atlantic, LLC, and Harrison Adaoha, LLC); another Park Morton Partners (Neighborhood Development Company and Community Builders, Inc.); and, lastly, Park View Partners (Landex Corp., Warrenton Group and Spectrum Management).

"We need a partner that [is] capable of more than just building housing,” said Albert in a prepared statement. “We are looking for someone who is committed to building a healthier, safer new community. This response, especially in light of the current economic conditions, speaks volumes about the value of this opportunity.”

The Park Morton project was greenlighted under the of the New Communities initiative – a District-led program to transform blighted public housing complexes into “mixed-use, mixed-income communities." Other such developments targeted for redevelopment by the Office of the Deputy Mayor for Planning and Economic Development (ODMPED) include the long-gestating Northwest One, Barry Farm and the Lincoln Heights/Richardson Dwellings in Northeast.

According ODMPED, the bidding development teams will make public presentations regarding this plans for Park Morton at an unscheduled time “later this spring.”

Awaiting the New Bruce Monroe

Several District agencies are currently in the midst of coordinating plans for the demolition and subsequent reconstruction of the recently closed Bruce Monroe Elementary School. The 36-year-old educational facility and recreation center, located at 3012 Georgia Avenue NW, closed its’ doors this past June along with several other neglected DC public schools after years of making do with shrinking budgets, overcrowding and/or deteriorating conditions.

In a Request for Proposals issued by the Office of the Deputy Mayor for Planning and Economic Development (ODMPED) this past autumn, the 121,000 square foot lot will be repurposed with a new school and, in the words of the Office of Planning, "a mixed-use development project which [is being] developed to fund the new school." Though the Mayor's office has yet to announce a development team, DC Public Schools’ Office of Public Facilities Management has been tasked with overseeing the school's development, while ODMPED and the DC Department of Small & Local Business Development share the responsibility of seeking a partner for the project’s mixed-use component.

ODMPED’s Communications Director, Sean Madigan, tells DCmud that there is no firm timeline for when the demolition may take place, but the Deputy Mayor Neil Albert’s office is currently in the process of securing the necessary paperwork in order to expedite the process once an announcement is made.

At present, the bulk of Bruce Monroe’s former student body and staff have been consolidated into nearby Park View Elementary at 3560 Warder Street NW - which itself will be closed once school bells start ringing at Bruce Monroe Elementary’s newest incarnation. According to ODMPED, Ward 1’s newest old school is currently scheduled to be “open in time for the fall of 2011.”

Bonafide New Residential for Silver Spring

There's yet another residential project in the works for downtown Silver Spring. Independent developer Theo Margas hopes to deliver his Bonifant Plaza project to so-named Bonifant Street in the heart of the suburban city's Central Business District. Since filing plans with the Montgomery County Planning Board more than two years ago, progress on the Bonifant has been slow coming due to traffic issues - but that's something that could begin to turn around as early as next month.

Located on an unaddressed parcel within a stone's throw (approximately 135 feet) of Georgia Avenue, the Bonifant Plaza would measure in at roughly 115,000 square feet and sport new 72 new rental apartments with the same number of private parking spaces. (As required by Montgomery County statutes, 12.5% of those units must be devoted to affordable housing – which amounts to 9 sacrificial units for the developer.) The 9-story project is being designed Silver Spring-based architects AR Meyers & Associates and, though current plans don’t include a retail component, Margas has still not discounted an alternative that would allow him to service the heavily trafficked Silver Spring corridor. “The zoning…doesn’t allow for ground floor retail,” he says. “If for some reason that changes, then we would pursue putting ground floor retail in. But at this point there’s no retail in the designs for the project.”

Per recommendations made by Planning Board staff and the Maryland Department of Transportation, Bonifant Plaza has been on hold pending a design adjustment of the of alleys intended to service the new building. At one point, there had been concerns that the recently resolved issue of Purple Line’s prospective route could also impact the site, but with both matters now headed towards a speedy resolution, the project will return before the Board next month. ““[That meeting is] only for the budget plan, and we still have the site plan,” says Margas. “We’re not going to be at [the final] stage until sometime after budget approval.” Meanwhile, Margas concedes that a final timeline and cost analysis for the Bonifant project will be contingent on the next phase of the approval process, but seems confident that 2009 will be the year that Bonifant Plaza joins its fellow Silver Spring CBD projects – like SilverPlace, 1050 Ripley, the Adele, 8227 Fenton, and 8711 Georgia – on the docket of County-approved developments.

DC Offers $10 Million to New Retail Development

Mayor Adrian Fenty joined Ward 8 Councilmember Marion Barry today to announce that the District of Columbia has granted a total of $10 million worth of tax increment financing (TIF) to three retail-centric real estate projects currently in the pipeline: City Interests, LLC's South Capitol Street SW residential/retail hybrid, Four Points, LLC and W Street Acquisitions' development on Martin Luther King, Jr. Avenue, and the Neighborhood Development Corporation's Heights on Georgia Avenue. According to the Mayor, it’s a calculated move designed to stop Washington DC's loss of retail revenue to suburban shopping outlets.

“Essentially, this is way to make sure that you use additional revenue to help the private sector bridge the gap to where they see great and exciting new projects, but where there may not be right now the right level of financial equity to make the projects happen,” said Fenty. “The District, as everybody knows, loses tons of money to the suburbs every year…If we don’t have economic development right here in the neighborhoods of Ward 8, people will then just take their tax dollars to Maryland. It’s a cyclical problem.”

The first project on the docket is also the largest. City Interests’ development at 4001-4035 South Capitol Street SW – currently a strip mall and the site of today’s press conference – will receive the bulk of the TIF funds announced for a grand total of $8.8 million. Once completed, the project will contain 200 units of housing, 47,000 square feet of retail and 15,000 square foot grocer or pharmacy in the forgotten portion of southwest - a small strip of land just south of Bolling Air Force Base. Construction is planned to begin in late 2009.

The Four Points project on the 2200 block of Martin Luther King, Jr. Avenue SE will receive $1.1 million from the TIF program to supplement its $5.2 million budget. The mixed-use project will bring 11,000 square feet of retail and a “soul jazz café” to the site – numbers regarding the housing component have yet to be disclosed. Construction is also projected to begin sometime in 2009.

The last project announced – and only non-Ward 8 development named – was the Neighborhood Development Company’s The Heights on Georgia Avenue. Located at 3232 Georgia Avenue NW, the $25 million project will receive $742,000 in TIF credits. With 10,000 square feet of retail (possibly to include a hardware store and sit-down restaurant) and 70 residential units, NDC hopes to start building late next year.

These three projects are merely the first recognized projects under the District’s Neighborhood Retail TIF program. Earlier this year, Fenty announced that the District - in conjunction with the Great Streets Initiative - would offer a total of $95 million in financing to local developments with a strong retail component. The Office of the Deputy Mayor for Planning and Economic Development (ODMPED) will continue to accept applications for funds on “a rolling basis.” ODMPED's Project Manager, Derrick Woody, said recipients are judged on a “long list of criteria” that includes “the composition of the development team, the level and amount of retail,” and a 5,000 square foot minimum in order for projects to be considered.

Washington DC retail news

Then There Were Three at Howard Town Center

It may be slightly less exciting than the McCain-Obama matchup (only slightly), but the contenders for the on-again, off-again Howard Town Center project have now been narrowed to just three: Archstone-Smith, Armada Hoffler and CastleRock Partners. A Howard University representative yesterday confirmed that two other bidders associated with the $30 million project - Monument Realty and the Trammell Crow Company - have been ruled out by the University as potential developers.

This marks Trammell Crow's second loss of the HTC project. When the HTC was first proposed in 2003, the development company walked away with a $56 million contract - only to watch it fall through when the Duke Plan, a new zoning overlay for the area, was introduced, and some have suggested that Trammell Crow may still have an actionable claim against the university.

Development on the 2.2 acre parcel is said to include a 300-unit apartment complex, parking and 70,000 square feet of retail, which must include a grocer under the terms of the RFP. The Howard Town Center project will be built at the current site of several Howard-owned properties at 2100 Georgia Avenue that have fallen into disuse. A recent Howard acquisition at Georgia and W Street, the Bond Bread Building, is also to be utilized in the redevelopment efforts. Howard acquired the building from the District of Columbia this spring in a land swap long opposed by the tenants of Bond Bread, which had sued the city over their rights to the building. Howard issued an RFP for the project (again) last May. Group Goetz Architects will be designing the project for the winning developer, a design that is strongly encouraged to be LEED certified.

Howard’s Communications Department would not discuss a date for the selection of a development team, but construction is planned to begin in August 2009.

Washington DC commercial real estate news

Project Taken to New Heights on Georgia Avenue

Like a snowball rolling downhill, the number of residential developments on Georgia Avenue is getting bigger by the minute. The latest project on the boards is The Heights at Georgia Avenue by the Neighborhood Development Company (NDC) - a 100,000 square foot mixed-use building that will feature 100% affordable housing. Besides adding 69 new apartments to the Petworth real estate market, the project at the intersection of Georgia Avenue & Lamont Street NW will also add roughly 10,000 square feet of retail to the mix. The developer is currently engaged in talks with a hardware retailer about the site and hopes have a sit-down restaurant in place when The Heights opens its doors in early 2011.

The Heights' all-affordable status has put it in a unique position with the District of Columbia. This week, Councilmember Jim Graham will introduce a bill before the City Council that aims to grant the project an exemption from property taxes for the next 40 years - provided it maintains an at least 50% margin of affordable housing in that time. The proposal should be voted upon sometime this fall.

NDC president Adrian G. Washington told DC Mud that ANC approval for The Heights at Georgia is forthcoming. “We’ve met with the ANC on several occasions and gotten a letter of support from the single-member district commissioner…We’re actually going tomorrow and we hope they will formally approve it.”

The Georgia Avenue site was acquired by a partnership of NDC and Mi Casa Inc. – a DC-based non-profit that specializes in restoring aging properties and converting them into affordable housing. The Heights will be their second brand-new new construction project (the first being the Rittenhouse Project in Brightwood). The building is being designed by architect Graham Parker and will come in at a cost of approximately $25 million. Construction is slated to begin in the fourth quarter of 2009.

The Heights is only one of numerous projects currently in development in the Petworth neighborhood. Up the street at 4136 Georgia, Formant Development's proposed 57-unit, 7 story condominium tower is still scheduled to go to ground in 2009. Meanwhile, Donatelli Development’s Park Place is currently under construction and their proposed project across the street at 3801 Georgia recently issued a BID to contractors. These twin projects are joined by the massive redevelopment just up the street of the Park Morton public housing complex.

UPDATE: The Heights at Georgia Avenue's final address has been confirmed as 3232 Georgia Avenue NW - across the street from the NDC's Lamont Lofts project that was completed in 2005.

Washington D.C. real estate development

Donatelli Downsizes Petworth Metro Building

Developers Willco Residential and Donatelli Development are moving forward with their initiative to revitalize a stretch of Georgia Avenue marred by vacant lots and blighted businesses. Billing itself as “the first luxury, boutique residential property in the Columbia Heights/Petworth neighborhood,” the project located at 3801 Georgia Avenue NW will - according to a BID issued by Donatelli on September 22 - feature 12 rental units of 1 or 2-bedroom, 850 square foot apartments. Additionally, the concepts on hand call for the construction of a “sit-down” restaurant and 5,000 square feet of retail space. This announcement marks a change to the initial plans that projected 49 residential units and space for only 1 to 2 retail outlets. Now that the scale of the building has been pared down, the developer is posting no requirements for affordable housing and, as such, “will offer luxury urban living at lower price points than larger competing luxury properties.” Accordingly, they expect a successful leasing effort and a low vacancy rate from the get-go.Christopher Donatelli, President of Donatelli Development spoke to the reasoning behind the loss of the residential space. “Anytime you have an empty lot like that you can come in with a quality development is a good thing,” he said. “We’re going to get some retail in there…Trying to get a good development there at the Metro seems to make a lot of sense.” The new building is directly across the street from Donatelli’s 161-unit Park Place development above the Georgia Avenue/Petworth Metro - due for completion this winter - and is being designed by architects Eric Colbert & Associates (see DC Mud's previous coverage of Park Place). The project is expected to go to ground in May 2009.

Washington DC commercial real estate news