Perseus Building Office Project on 14th Street

1728 14th Street, Image courtesy Bonstra Haresign

The stoic facade of the Granger building at 1728 14th Street will be getting an overhaul, now that developer Perseus Realty has closed on the purchase.  The developer sealed the acquisition of the property - located between R and S Streets - in mid-August, John Clarkson of Perseus told DCMud on Thursday; the DC Property Sales Database shows the building sold for $4.8 million. Perseus and Ogden CAP Properties are partners in the joint venture.  Also on board is Bonstra Haresign Architects, and Andrew Poncher of Streetsense for retail leasing.  The firm is behind a number of other 14th street projects including the AME Zion church renovation and lower-level addition, the Q14 Condominiums building, as well as Studio Theater and The Aston at 14th and R, all within a few blocks down the street.

Current Granger Warehouse Facade, Image Courtesy Bill Bonstra

Plans for the site include the adaptive re-use of the warehouse building, built in 1988, and the new design includes four floors with 28,000 square feet of retail and office space.  Of the many developments slated for 14th Street, this is one of the few office concepts (Furioso's project being the other).  Clarkson, who provided an up-to-date rendering to DCMud on Thursday, said Perseus expects to begin construction on the project in February 2013 with a 12-month construction time.  The Advisory Neighborhood Commission (ANC) 2F wrote a letter in full support of the project, which also received preliminary approval from the DC Historic Preservation Review Board (HPRB) in July.

Like 1728, most of Bonstra Haresign's other 14th Street projects have also been located in the historic district, Bonstra Haresign managing partner Bill Bonstra told DCMud.  "What is really important is understanding the context and what I call the DNA of the site."  The site, 60 feet in width, likely once housed three townhouses, Bonstra said.  "That understanding allowed us to come to terms with the appropriateness of the architecture."

The project also sits in the context of a rich history of commercial buildings on 14th Street, many of them built in the Nineteen-teens and Twenties as automotive showrooms.  Back then, 14th Street was a trolley corridor and a place to window shop. "There was a tradition of retail and commercial buildings and we looked at that tradition as a model."

The design pays homage to the street's architectural tradition with a formal facade with strong center and side doors and a masonry structure, yet also incorporates generous amounts of glass, color, and contemporary planes. Design for the masonry incorporates striping, detail, setbacks, and reveals.  "What we set out to do was respect that tradition of commercial buildings on the street but also make it a building of its time," Bonstra said.  "We believe that the front elevation of this building will be a nice complement to historic buildings, but it will be a part of our time architecturally."

Bonstra said the building will contribute to the true mixed-use history of 14th Street, ultimately providing more of what the street lacks: neighborhood businesses and offices.  The property also includes two historic townhouses north of the Granger warehouse building, but Perseus doesn't have plans to alter them at this time, Clarkson said, though those townhouses might get some interior improvements in the coming year.

Washington D.C. real estate development news

West End Hotel Construction Begins

OTO Development has begun work on the Hilton Garden Inn at 22nd and M Streets, in DC's West End neighborhood.  The project had been on hold for years as a previous team sought to put a fashionable "1 Hotel" on the site, but failed to get the project off the ground.  Turner Construction, the general contractor on the project, began site work last week.

OTO, based in Spartanburg, SC, is one of the three developers partnering to build the West End Hilton, along with newly-formed partnership including Starwood Capital Group and Perseus Realty, LLC, a partnership that brought the financing needed to start construction.  Shalom Baranes of Georgetown is architectural firm designing the terracotta and brick, 10-story, 237-room hotel, which will feature a second-floor, landscaped courtyard, meeting rooms, a rooftop garden and pool and a green roof.

West End Hilton Garden Inn, Washington, DC

The 15,600 s.f. lot at the corner of 22nd and M has been dormant since 2008 when the site's original developer demolished the Nigerian Embassy to make way for a boutique hotel.  Starwood then planned a luxury hotel but failed to secure financing for the concept.



In 2011, developers sought permission to modify the site plans and instead of a boutique eco-luxury creation, they announced plans for a Hilton Garden Inn (a brand categorized as upscale mid-priced) with 237 rooms, along with Shalom Baranes and OTO Development as a third development partner.  Although neighbors complained about the "fanny pack crowd that would frequent the hotel, the choice proved easier to finance.

The hotel will also feature a ground-floor restaurant and bar with indoor-outdoor seating opening onto the street on the corner of 22nd and M, and is the beginning of Hilton's play into more urban areas.

Washington D.C. real estate development news

Today in Pictures - Jefferson at 14W

 

Back in December of 2010, Perseus Realty and Jefferson Apartment Groups (JAG), an Akridge affiliate, broke ground on 14W, replacing the former Anthony Bowen YMCA with apartments and a new YMCA.  The project had languished for years before finally getting the cash infusion from JAG that finally got it going (despite a faux-groundbreaking), and is now reaching its final stage of construction.

The HOK and Dorsky Hodgson & Partners-designed project will feature 231 rental apartments, a brand new, state-of-the-art 44,000 s.f. YMCA, and over 12,000 s.f. of ground-floor retail. The new gym and apartments will deliver later this year.

Washington D.C. real estate development news

West End Hotel Ready to Start Construction

The future Hilton Garden Inn in DC's West End

In a deal that marks a step forward for a hotel project at 22nd and M - on hold for four years - developers are set to close Wednesday on construction financing for the project, OTO Development CEO Corry Oakes told DCMud.

If the deal closes today and construction moves forward in a few weeks as developers expect, deep-rooted weeds on the prominent corner in DC's West End neighborhood may soon be gone, salving neighbors' ire.

"We're very excited about moving this long-awaited project forward and becoming part of the community," Oakes said.  He said contractors would break ground on the Hilton Garden Inn, planned for 2201 M Street, within weeks.

Turner Construction will be the general contractor on the project, Oakes said.  OTO, based in Spartanburg, SC, is one of the three developers partnering to build the West End Hilton Garden Inn, a partnership which also includes Starwood Capital Group and Perseus Realty, LLC.  Also Wednesday, the three partners were due to close on a deal consummating their joint venture agreement.

Shalom Baranes of Georgetown is architectural firm designing the terracotta and brick, 10-story, 237-room hotel, which will feature a second-floor, landscaped courtyard, meeting rooms, a rooftop garden and pool and a green roof, according to a project architect.

The corner of 2nd and M has been an empty lot for years

The 15,600 square-foot lot at the corner of 22nd and M hasn't seen action since 2008 when the site's original development team demolished the Nigerian Embassy to make way for a boutique hotel. Developers later abandoned plans for a Starwood "eco-luxury hotel", billed as a "1 Hotel", when they couldn't secure financing for the structure.  They settled on the Hilton Garden Inn brand instead, but by the time developers applied to revise their permits, many neighbors and West End leaders had already gotten excited about the "1 Hotel" concept.    

"During the zoning hearings, I was not shy about my disappointment that the concept switched from the 1 Hotel to the Hilton Garden Inn, as I felt the West End really didn't need more hotels and at least the 1 Hotel was interesting, both as a destination concept and architecturally," West End ANC2A commissioner Rebecca Coder wrote in an email to DCMud Monday. "However, at this juncture the neighborhood simply wants the corner activated."

Developers abandoned plans for this "eco-luxury" hotel

In the project's beginning, developers included Starwood and Perseus with Oppenheim as the architect.  Original plans for the site called for a 150-room, 23-suite hotel, under the Starwood Capital "global eco-luxury" hotel brand "1 Hotel", featuring an organic day spa among other features built to LEED standards.

Years passed.  The lot sat empty, but D.C. wasn't the only place so-called "eco-luxury" hotels, envisioned to cater to a niche market of über-wealthy lovers of greenness and light, weren't sprouting.  According to HotelChatter.com, Starwood's plans for a 1 Hotel in Seattle were withering too, along with the economy. Starwood started excavations for a 1 Hotel in Seattle, but later re-filled the hole and the lot reverted to a parking lot when it couldn't secure financing for the project, according to the Seattle Times.

Then, sometime between the nadir of the financial crisis and the birth of Occupy Wall Street, developers decided to change course on plans for 22nd and M after Perseus contacted more than 40 lenders, all of whom declined to finance the West End 1 Hotel project.

In 2011, developers sought permission to modify the site plans and instead of a boutique eco-luxury creation, they announced plans for a Hilton Garden Inn (a brand categorized as upscale mid-priced) with 237 rooms.  The new incarnation now included Shalom Baranes as the architect, and OTO Development, a hotel development company based in Spartanburg, South Carolina, as a third development partner.  Changes included a redesign of the exterior façades, an increase in the number of rooms and a three-foot reduction in height to 107 feet, and 53 parking spaces in a valet-operated garage.  There were neighbors who balked.

Plans for the Hilton Garden Inn at 22nd and M, West End, DC

"Some neighbors have already said they fear the new hotel will attract "the fanny-pack crowd" to the West End neighborhood," the neighborhood group West End Friends wrote on their web site last year after an ANC2A meeting when developers presented their new plans.

But if hotel site plan changes sparked West End fears of fanny packs, site developers and project architects maintain there is no need to fret about that.  "This is very much upscale for the Hilton Garden Inn brand," lead project architect Patrick Burkhart said.

Burkhart said the hotel would feature a second-floor, landscaped terrace with outdoor seating areas, and a lobby with a fireplace, monumental staircase, and a water feature with plants cascading from the second-level terrace.  The hotel will also feature a ground-floor restaurant and bar with indoor-outdoor seating opening onto the street on the corner of 22nd and M. Burkhart said the hotel marks a move by the Hilton Garden Inn brand into more urban areas, including D.C. where he said it would be the District's third.

West End Hilton Garden Inn, Washington, DC

With a new hotel, the corner will see more activity in years to come.  Demand is up for hotel rooms in the District.  According to Jan Freitag,  Senior Vice President with STR Global, a hotel industry benchmarking and consulting company based in Hendersonville, TN, data shows 10.5 million rooms were sold in the first five months of this year in the Washington, D.C. market, 1.5 percent more than last year.  "More people are coming to DC."

At least some of those people may soon be destined for 22nd and M.  Lucky for the West End, even fanny packs can be luxurious too.

NoMa Greyhound Station Developers Plan Feature Park

Perseus Realty, LLC and First Potomac Realty Trust are nearing the anniversary of their purchase of the Greyhound Station in NoMa on 1st and L Streets, a site they will develop into a mixed use building.  While developers remain mum on details of the building, one public element of the plan has emerged - developers will give back a portion of the space to create a public park space will split L Street and act as a "gathering place."

Having purchased the development for $46.75 million, according to the Washington Business Journal, they are redeveloping it with assistance from NoMa BID. The station will be turned into a large mixed-use residential and office building, falling between 600,000 to 700,000 s.f., according to BID President Robin-Eve Jasper.  Developers will dedicate 80,000 to 100,000 s.f. on the first two floors for retail. Perhaps more significantly, the property owners will set back their project to allow a widening of L Street - tweaking the L'Enfant grid - to construct a park in the median that will act as a “public gathering place” and include a walkway with a staircase that will lead to the second floor of retail in the new development.

Funding for the project was in the may budget but has been redirected by the City Council, according to Jasper.

The park will create a sort of plaza to hold events such as a farmer’s market and nighttime movie showings, next to the development's rows of newly-created nightlife.

“We disaggregated what a park is conceptually,” Jasper said. “This park is a gathering space, but it isn’t a green space or a recreations pace. We’ve provided those spaces in other places, where they can work better, given how much land there is.” The park will be 60 ft. wide and 150 to 300 ft. long with an event space in the middle.
In order to “have that big plaza in the middle of the street,” Jasper said they asked the developers to voluntarily set back from the street about 25 ft.
But the plaza will also be part of the retail as a staircase will reach up to the second floor of stores, connecting the public space and the stores.

“They’ve got this monumental staircase up into the plaza in the center of their property from this upgraded L street, so it’d be like two contiguous, completely accessible public spaces and would allow them to have two-story retail,” Jasper said.

Jasper thinks this will act as a “community crossroads” that will help pull the NoMa residents and business owners together into a more coherent community.  "You need a public gathering space for a community...We have no public gathering space here in NoMa, and it needs to change. It’s not fair to the neighborhood, and the BID has been nomadic. That’s been successful for a while, but as the neighborhood builds out, it’s harder and harder, almost impossible to find a site now.”


Comparing the area’s development to those of other neighborhoods, Jasper said having the park is key to building an established neighborhood.

“That’s what makes neighborhoods work. If you look at older, more established neighborhoods, that’s something they all have in common,” she said. “So I think this neighborhood deserves the same. There are a lot of residents who have been in this neighborhood for a long time who have not had the benefit of parks. Sometimes people think this is for new people coming to the city, but it’s really not. It’s to help glue the different sides together.”

She originally got the idea of creating a non-traditional park from something she picked up at Harvard business school: looking at a whole through its various functions or “jobs to be done.” Since park includes things like gathering, recreation and fitness, she said it made sense to break up the various jobs if necessary. Hence the small park that acts solely (but she hopes effectively) as a gathering place. 

Washington D.C. real estate development news

West End Hilton Garden Inn Seeks Modifications This Week

This Thursday, the joint venture between Perseus Realty, Starwood Capital, and OTO Development, "PerStar M Street LLC," will visit the Zoning Commission with its request to modify the PUD zoning application for its West End hotel site, a now-empty parcel at 2201 M Street once occupied by the Nigerian Embassy. The 15,600-s.f. area is currently visualized by developers as a Hilton Garden Inn, a vision that replaces an earlier, sustainable, "eco-luxury" 1 Hotel.

The change in brand, from a 1 Hotel to a Garden Inn, comes with several zoning changes: a redesign of the exterior façades; an increase in the number of rooms, from 170 to 238; a minor increase in density, from 122,235 g.s.f to 124,564 g.s.f. (7.84 to 7.99 FAR); a small reduction in height by 3' to approximately 107'; and 11 additional parking spaces (increased from 42 to 53) in a valet-operated garage.

The Hilton Garden Inn, although not "eco-luxury," aims to become LEED-Silver certified; the Garden Inn is being designed by Shalom Baranes, who replaced the architect of the 1 Hotel, Oppenheim.

The neighborhood ANC was disappointed in the change from the 1 Hotel to a new plan and new flag; ANC 2A Chair, Rebecca Coder, emailed the following: "While the West End didn't need another hotel, the fact that the 1 was a unique concept made it palatable." Coder added that the ANC is hopeful that the concerns articulated by residents, related to the design and desire for unique retail, will be considered by developers.

The current version of the PUD, which accommodates the scrapped 1 Hotel plan for the site, was approved in June of 2008, and the buildings at 22nd and M Streets, NW – the Nigerian Embassy and Asia Nora – were razed in February of 2009 in anticipation of the project's start, which never happened.

In March of 2010, the PUD application was given a two-year time extension, due to "difficulties with financing based upon changes in economic and market conditions beyond the applicant's control;" a report by the Office of Planning in support of the time extension stated that Perseus Realty contacted 40-plus lenders unwilling to provide financing, citing the general decline in the hotel market and the negative growth in revenue generated by existing hotel rooms.

The construction extension requires that a building permit application be filed by June of 2012, however, from that time, a full year is given before construction must be underway – "no later than June 27th, 2013" – which means that although Robert Cohen, president of Perseus, said in August that the development team's goal is to begin construction in June of 2012, there is no pressure from the District to begin next year, and still another hurdle awaits – construction financing.

The Office of Zoning explained that the upcoming hearing, on Thursday the 27th, to review zoning request, may or may not result in proposed action by the Zoning Commission: "It’s possible that the Commission could take proposed action at the end of the hearing and then it would be referred to NCPC for a 30-day comment period before final action could be taken. If they don’t take proposed action at the end of the hearing, then the next step would be for it to be placed on one of the scheduled meeting agendas for decision."

In August, Neil Jacobs, president of SH Group, Starwood's luxury hotel brand management company, stated the reason for the brand change was that, "With a 1 Hotel we were limited in the number of rooms we could get onto the site. We didn't want to compromise the brand, and commercially [the Garden Inn] is a better choice."

OTO Development came on as a partner after the decision was made, in the fall of 2010, to desert the 1 Hotel in favor of a more affordable Garden Inn.

The Hilton Garden Inn will contain a 5,000-s.f. restaurant offering seasonal sidewalk seating, and if all goes well with the upcoming PUD change process, and ability to secure construction financing, developers aim to deliver the hotel and restaurant by the summer of 2014.

Washington D.C. real estate development news

Hilton Garden Inn Aiming for Next Summer at One Hotel Site

The West End has been waiting on 1 Hotel for several years. In a way, the wait is over, according to Robert Cohen, President of Perseus Realty LLC, half of the site's development team along with the Starwood Group, who said, "There is no more 1 Hotel [for this site]." Instead, there will be a 238-room Hilton Garden Inn with a 5,000 s.f. restaurant, and construction is expected to begin in June of 2012.

New design, Hilton Garden Inn:
Previous design, 1 Hotel:
Perseus Realty is currently applying for an amended PUD with the Zoning Commission, using the above (first rendering) working design by local architecture firm Shalom Baranes. "It's a first class design," explained Cohen. "It'll be the nicest Hilton Garden Inn in the country." Shalom Baranes principal Patrick Burkhart is in charge of the new Hilton Garden design, the 1 Hotel design was done by Chad Oppenheim of Oppenheim.

"Due to the climate in the last two or three years, we felt that a Hilton Garden Inn is a better use for the site. Nothing more than that," said Neil Jacobs, president of SH Group, Starwood's luxury hotel brand management company, formed in 2009. "With a 1 Hotel we were limited in the number of rooms we could get onto the site. We didn't want to compromise the brand, and commercially [the Hilton] is a better choice."

The 1 Hotel brand is alive and well, confirms Jacobs, who notes the construction of a new 1 Hotel currently underway on 6th Avenue in New York.

The Starwood and Perseus investment at M and 22nd Streets, NW is the site of the former Nigerian Embassy and Asia Nora - both razed in 2008. A restaurateur, yet to be selected for the 5000 s.f. space, will be largely dependent on qualities that are interactive and community focused, according to Cohen.

8/11 addition: previous project and design commentary, Former Swanky 1Hotel...

Washington D.C. real estate development news

Ellsworth Slated For April Groundbreaking in Silver Spring

The Ellsworth Apartments in Silver Spring is set to break ground in late April or early May, said Karl Alt, Development Project Manager of The Foulger-Pratt Companies. The apartment building, positioned two blocks from the Silver Spring Metro, will offer residents a courtyard, fitness center and pool. It was originally billed as a luxury condo development. The 217,655 s.f. building will be built to LEED-Silver certification levels and will offer 222 market-rate apartments and 19 low income units. Alt said the project will take over the entire block from Ellsworth Drive to Cedar Street to Pershing Drive and Veterans Drive. SK & I Architectural Group, the firm behind View 14, Union Row Flats and Arlington's Lofts 590, is steering the project's design. Foulger-Pratt is responsible for both development and construction of the project. 

Foulger-Pratt Development Executive Briggs Bunker said the apartment exterior closely resembles the drawing above, despite that the project has been retraded as rental apartments. Of course it's still being dubbed as luxury residences. "The materials used in each unit are what make it a luxury rental," said Bunker. "Marble counter tops in each unit, for example." The common spaces are also what the developers consider a notch above: "Not many rental buildings have a common courtyard, a pool, a fountain, two areas for outdoor barbecues, and an outdoor fireplace." The building will also feature a fitness center, a game room and cybercafe. The Ellsworth is one of the few projects in Silver Spring to move forward without substantial subsidies for affordable housing, which Montgomery County Executive Isiah Leggett has made clear is a staple of real estate development.

Projects like The Argent, an affordable housing project developed by Perseus Realty at 1200 Blair Mill Road that opened last year, have been able to move forward with local and federal grants for below-market housing, while Galaxy will rise at 8025 13th Street, with 113 market-rate apartments and 82 subsidized units designed by A.R. Meyers & Associates. So while the proliferation of development in the suburb just north of the city may offer some sunny optimism regarding the housing economy, the roll out remains slow, with projects often scaled down and subsidized. Development of the Ellsworth, in that light, is a sign of more faith in the market forces. 

Silver Spring, Maryland retail and real estate development news

West End Hotel, Waiting for 2

It may be up to three years before Starwood Capital Group moves forward on with a hotel at 22nd and M in the District's West End. The project that was to have been developed by Perseus Realty has been on hold for several years, having been slated for the city's first eco-luxury, LEED-certified 1 Hotel, a brand that would have offered 150 rooms, 23 suites, an organic day spa, fitness center and restaurants.

"My sense is they are waiting for the financial markets to thaw out a little more," said ANC2A Commissioner Rebecca Coder. "From the neighborhood perspective...there would be a preference for multi-family housing, but we're open to the hotel that's approved as well." Coder said she knew of other developers having approached Starwood about purchasing the land to develop as part of Eastbanc's redevelopment of the post office, library fire station, but the offer was declined.

In phone calls yesterday, both Starwood Capital and Perseus would not comment on the development. But sources say the hotelier has been talking with other operators about possibilities for the site. When asked, Perseus said the company is still the developer for the project.

The two formed an agreement in 2007 to build the hotel. The site was the former location of the Nigerian Embassy and Asia Nora, both demolished in 2008 - no architectural loss - to make way for 1. The project never got off the ground. Last year, Starwood abandoned the 1 Hotel concept, and has since considered other brands. Starwood and Perseus had hoped to decide upon a direction by the end of 2010.

But locals are unhappy that the choice site has become a weed garden. "We are talking to people to decide what to do with the land in the interim, something that may generate money," said Coder. She mentioned the possibility of parking, but the PUD may prevent the developer from such a plan for temporary use. "It's really long time for the neighborhood to put up with an empty lot."

Washington, D.C. real estate development news

14W Breaks Ground

Nearly two weeks ago, Perseus remained mum on the status of the much anticipated Anthony Bowen YMCA redevelopment project at the intersection of 14th and W Streets in northwest Washington, promising only that they'd be ready to reveal "something" shortly. But before Perseus could say anything, let alone something, Jefferson Apartment Groups (JAG), an Akridge affiliate, revealed they had purchased the project from a Perseus entity for $7.5 million, and would join Perseus as partnering developer (talk about awkward) on the project. The sudden announcement signaled that the project, thought by many to be strapped for cash and indefinitely stalled, was and is back on track. And now today, more than two years after a faux-groundbreaking, developers will once again put a shovel in the ground; this time they really, really, actually, totally, seriously swear to start demolition and new construction.

Apparently, equity financing from Rockpoint Group, L.L.C. and a $53 million construction loan from Wells Fargo Bank was just what the doctor ordered. Upon completion, the HOK and Dorsky Hodgson & Partners-designed project will feature 231 rental apartments, a brand new, state-of-the-art 44,000 s.f. YMCA, and over 10,000 s.f. of ground-floor retail. The new gym and first apartments will deliver in the summer of 2012, with the project opening in its entirety later in the fall.

Washington D.C. Real Estate Development News

Perseid Adventures at 14 & W

On October 7th, Ward One Councilman Jim Graham relayed a message of good news to his listserv and Twitter followers from Bob Cohen of Perseus Realty, who had recently testified at a Council Hearing. Pressing Cohen on a start date for the YMCA redevelopment project at 14th and W, Graham quoted the developer as promising the the ability "to start construction before the end of the year.” The pledge to get the ball rolling on the 231-unit mixed-use development didn't garner much attention at the time, and citizens continue to wonder when to expect action.

Recently queried on the matter, Cohen would only answer that Perseus is unwilling to comment on the status of the project. He asserted that no official date has been set for a groundbreaking, but revealed that "[w]e'll be ready to announce something in the next couple weeks." Whatever could that something be? Developers Perseus, and their partners on the project Capmark Investments LP and FLGA Real Estate Group, had at one point anticipated a 2010 delivery date (the project "broke ground" in September 2008). But the market-plunge has booby-trapped the finance game, understandably complicating the developers' pursuit of funding, and Capmark declared bankruptcy in 2009, making the thought of a 2010 start date a pleasant surprise. Complicating the matter is the requirement to deliver a turn-key YMCA. But with lending spigots reopening for DC's multi-family market, and a passel of multi-family projects in the offing up and down 14th Street, Perseus and its backers appear to have found the heart to build now. The already thin District budget does not have any available funds to push the project along, and have previously granted a generous 20 years of tax abatement and $1 million in forgone sales taxes on construction materials for the project.

Helmuth, Obata, & Kassabaum and Dorsky Hodgson & Partners provided the design for what several online commenters have called an underwhelming facade. The residential portion will rise six largely glass-paneled, rather-vanilla-flavored floors above 12,200 s.f. of ground floor retail space and 170 below-grade parking spaces. Although somewhat plain, the building does show potential for elegance, if it can acquire some of the stone and metal detailing that give appealing character to industrial buildings like the Central Union Mission, the Studio Theater, and the stylish car-showroom turned upscale Italian restaurant Posto.

Developers have promised that eighteen units will be reserved for families earning less than 60% of the AMI. The centerpiece of the development is the the new Anthony Bowen YMCA, a 44,000 s.f. recreational and community facility to feature a "pool, state-of-the-art cardiovascular and resistance equipment, group exercise studios, and a child care area." But for now, local residents will have to build endurance at nearby gyms or stick to in-house push routines, as the YMCA doesn't look to be redone anytime soon.

Update: If you haven't already noticed the reports from the comment thread below, the 14th and W redevelopment project was recently sold by a Perseus entity to Jefferson Apartment Group (JAG), an Akridge affiliate, for $7.5 million. JAG also brought the Rockpoint Fund to provide much-needed equity. Perseus will stay on as development partner, and construction is expected to start as early as December 1st.

Washington D.C. Real Estate Development News

Argent Opens Subsidized Apartments in Silver Spring

The Argent, downtown Silver Spring's only all-affordable apartment building, opens its doors tomorrow. Built in 2009 by Washington DC-based Perseus Realty LLC as "luxury" condos (outward appearances notwithstanding) the condo project languished with few sales (actually none) and financing gone south, sitting vacant for more than a year until sold earlier this year to Utah based Pallas Properties and Paradigm Financial Consulting for $24.8m.

Pallas snapped up the 96-unit property earlier this summer for $258,000 per unit, with the assistance of federal Low Income Housing Tax Credits in a plan that keeps 90% of the units set aside for tenants with less than 60% of the Average Median Income (up to $43,000) and 10% of the apartments at less than 50% AMI. The Argent offers underground parking and, in a rare twist for a multi-family building, stainless steel appliances, ceramic floor tiles, and granite countertops. The deal keeps the units income restricted for 30 years. Montgomery County contributed $5m through the Housing Initiative Fund.

But the addition of an entirely low-income building took neighbors by surprise, reports SouthSilverSpring blog, and not in a good way. Subsidized apartments are rife throughout Silver Spring - the Portico has 23 of 151 units bankrolled by taxpayers, Falkland Chase Townhouses (58 of 70), Alexander House (123 of 310), Silver Spring House (32 of 77), 1200 East West (32 of 245), Gramax Towers (153 of 180), the Veridian (58 of 457), and as DCMud reported just yesterday, the Galaxy is now under construction next door with 82 of 195 units dedicated to low-income tenants. Occupancy of the Argent, located at 1200 Blair Mill Rd., will begin in October. The ceremony will take place tomorrow at 9:30am.

Update Sept 16: At the ceremony, Montgomery County Executive Isiah Leggett released a statement that said “One of my top priorities is increasing the amount of affordable housing in Montgomery County...These units will provide much-needed safe and affordable housing to 96 individuals and families and give yet another boost to South Silver Spring.”

Silver Spring real estate development news

14th Street YMCA: Short on the Dough

Despite the mini-boom taking hold on the 14th Street corridor - View 14, Room & Board, JBG's large condo project, and a surfeit of new retail - not all projects are having an easy time of digging up money. In addition to UDR's iced over plans up the hill for the Nehemiah Center, the latest financing casualty is the redevelopment of the Anthony Bowen YMCA into a large apartment building. The planned mixed use development at 14th and W Streets has not disturbed any earth since the project "broke ground" in September 2008, nor does it look like it will make any progress soon. The 231-unit project was planned by Perseus Realty LLC in conjunction with Capmark Investments LP and the minority owned DC-based FLGA Real Estate Group. In 2008, the team optimistically estimated a 2010 finish date; now an optimistic view would be a 2010 start date.

Brian DeBose, spokesperson for Councilmember Jim Graham, whose ward the project sits in, told DCMud, "The project is stalled. There is no financing and there has not been a breakthrough." In short, DeBose surmised, "Nothing is going on."

DeBose added that the District does not have the money to provide a TIF or any seed money to help bolster the stalled development, even if the will was there. To be fair, the District has already done its share during more flush times, including the District Council's 2008 decision to grant a hefty 20 years of tax abatement and $1 million in forgone sales taxes on construction materials for the project's development.

Clark Construction is the general contractor, if it comes to that, for the planned 236,000-s.f. apartment building with 18 affordable units. The project is also supposed to include a new 46,000-s.f. YMCA and 12,200 s.f. of retail space. Designs for the project are by Davis Carter Scott and HOK. The Anthony Bowen YMCA was named for a Prince George’s County slave who relocated to Washington after purchasing his freedom. Bowen went on to co-found the nation’s first African-American YMCA in 1853. Developers for the project were either unwilling to comment or did not return phone calls requesting additional information.

Washington, DC real estate and development news