Live Webchat: NCPC's Comprehensive Plan

Ever wondered how DC's monuments are planned, and how the federal buildings are located and designed? Join Senior Urban Planner David Zaidain from the National Capital Planning Commission (NCPC) today (Thursday) at noon as he discusses federal elements of the National Capital’s Comprehensive Plan, the federal government's long term urban planning vision for the city. NCPC is in the process of updating the plan, including everything from the look of the Mall and urban waterfronts to security and foreign missions. This is your chance to become involved. The discussion will focus on the following topics:

• How the Comp Plan serves the region
• The elements of the Plan
• The Plan's role in guiding federal facility location, transportation, etc.
• The Plan's policy impact on local/regional development
• Why the Plan is being updated
• The addition of an Urban Design Element
• Opportunities for public involvement

Arts Group Wants to Reinvigorate Stalled Developments

Developers who have been sitting on an unproductive lot or design for transit-oriented, mixed-use development might find a compelling impetus in an offer from Cultural Development Corporation (CuDC). The arts-oriented, non-profit broker, involved in project like Source and Atlas Performing Arts Center, is seeking "strategic partners" to create two projects, a commercial arts space and visiting artist housing, and is accepting applications from developers looking to utilize the resources and reputation of CuDC to create a sustainable arts space and catalyze neighborhood development. The Request for Expressions of Interest is the non-profit's first effort to formalize the type of development partnerships into which it invests time and resources.

Anne Corbett, Executive Director for CuDC, said the group receives calls "regularly" from developers with random lots or project ideas, and that the new direction is as much an exercise in embracing offers that work as in being able to "say no" to projects that do not fit. With the plethora of "stalled and underutilized projects" in the DC region, Corbett said the partnerships could provide the extra oomph to get projects moving that would "otherwise be sitting on the shelf."

The Commercial Arts Space would combine artists' work space with private arts organizations - meaning retail, restaurant, graphic design firm or even a law firm - while providing space for artists to work. Corbett said the ideal commercial project would offer 100,000 s.f. of space, 20,000 s.f. of which would be dedicated to artists' work space to create a "critical mass" between artists and related businesses.

The Visiting Artists Housing would provide both long term (multiple months) and short-term (overnight) housing in a hostel-like setting capable of holding a minimum of 35 artists each night. Corbett said this project needs to be centrally located and close to a metro, but also needs to be in an area that would "substantially benefit from the spillover effect". In the RFEI, the non-profit points to the Atlas District and the dramatic change that came over the H Street Corridor and its renaissance. So Dupont is probably out, but Brookland or Petworth could be in.

To apply, a developer needs "development expertise, capital, and/or property for development." CuDC is willing to act in various roles within a project including acting as the lead developer, minority development partner, master lessee or as a facilities manager. The ideal projects would rehabilitation of an existing structure at an infill location.

And CuDC must have a strong voice in the development process. Corbett said "people who have worked with us know that we are not shy, regardless of the financial relationship we strike in a project; we're very forthright with our opinions."

Got a stalled project near the metro? Have an underutilized lot in a neighborhood in need of a cultural boon? Don't mind being bossed around by a non-profit? Responses are due March 26th.

Washington DC real estate development news

Development and DC's Population Surge: 600,000 Souls and Counting

Though the economy is stagnant - or perhaps because it is and DC is basking in the glow of federal largesse - Washington DC's population growth is surging. The District released statistics today finding that in 2009 the city added nearly 10,000 new residents, its biggest percentage one-year gain since WWII, outpaced only by Utah (those Mormons), Texas (immigrants), Colorado (blame the scenery) and Wyoming (no idea why). The growth brings the city’s total population just a few sets of octuplets short of 600,000 residents, according to recently released estimates by the United States Census Bureau. DC continues to hold the record for the highest growth of any "federal district" in the continental U.S. Ahem. According to a press release from the Mayor's Office, the growth can be attributed to a combination of housing supply, better neighborhoods, new births and residents moving to the District from other states and overseas. Mayor Adrian Fenty took some credit, boasting “this kind of growth will only continue as more people see how we are working to improve our schools, provide more transportation options and build healthier, safer, more vibrant neighborhoods.” There might certainly be something to it from a development perspective. In the past few years, several large, government-lauded residential project have opened to dramatically increase the stock of homes throughout the city. New buildings drew in residents creating dense populations, in previously low-density areas. Within the past 2 years, numerous projects have opened and begun filling with residents; projects like City Vista, (over 600 apartments and condos), EYA's Capitol Quarter (more than 300 townhouses), 22 West (95 units), JPI's three residential projects in the Capitol Riverfront neighborhood (960 apartments),Allegro Apartments (269 rental units), Kenyon Square (157 condos), Union Row (269 units), and Highland Park (229 apartments); in these 9 projects alone nearly 2900 housing units were added, most of which are now nearly fully occupied. So the growth could be a sign of improvements for all real estate developers who have been holding their breath, waiting for 2008 and, now, 2009 to pass.

Washington DC retail and commercial real estate development news

DC Tax Sale Rescheduled

The Office of Tax and Revenue has rescheduled its tax sale for November 30th. The tax sale, originally scheduled for September, had been canceled after a legal challenge to the process. Interested parties can register from Nov. 23rd - 25th, those who had registered prior to the September deadline need not register again. The auction is not in fact a sale, as no property changes hands on that date. Auction bidders win a claim against the property, and may eventually begin a judicial foreclosure process, but original owners retain the property in the short term and have a statutory right to pay off the bidder and clear the title to their home. And so while most property owners delinquent as of last year will exercise their rights and retain their homes, auction bidders often come away with the right to charge penalties on the property. The auction will be held at 941 N. Capitol Street. 

Washington DC real estate news

DC, Federal Agencies Hold Public Meeting to Improve DC Parks

On Tuesday, the National Capital Planning Commission and partners will present the draft version of the joint CapitalSpace plan to the public. A joint initiative of NCPC, the National Park Service, and the District of Columbia Office of Planning, Capital Space is designed to create a "high-quality," unified park system in Washington DC by improving, connecting and expanding DC's park systems.

Members of the trio will give a presentation on the "six big ideas" for the District: Linking Fort Circle Parks by way of walking trails to serve as a green beltway around the District, improving public schoolyards, enhancing existing parks with more active uses, improving playfields (particularly increasing regulation sized playing fields), transforming small urban parks, and enhancing "urban natural areas" - supporting biodiversity while serving people. The plan is currently in a 60-day public comment period that concludes December 8th. The event will take place from 5:30 – 7:30 p.m. at the Martin Luther King Jr. Memorial Public Library.

Court Upholds Tax Deductions for DC Easements

The U.S. Tax Court has upheld a tax deduction for a property owner in Washington DC who claimed a tax deduction for a property easement, finding against the IRS. The IRS has sought to end tax deductions for donations of historic easements, a common practice among historic properties in the District.

In Simmons v. Commissioner (T.C. Memo. 2009-208), the court ruled in September that two easements made to The L'Enfant Trust , at 17 Logan Circle (pictured) and 1503 Vermont Avenue, were valid charitable contributions, warranting federal tax deductions valued at 5% of the property's value. Preservation easements are common agreements between the owner of a historic or archaeologically significant property and a charitable organization that is chartered to preserve such properties. The agreement grants the charitable organization a legal right to control that portion of the property, a right which is recorded and retained in perpetuity. The property owner's grant to the charity results in a donation, the amount of which is therefore deductible as charitable. Grants in Washington DC generally involve the facade of a property, which thereafter cannot be altered without the consent of the charitable organization.

The L'Enfant Trust requires property owners to affix a plaque on the facade, maintain the subject portion of the property, and make cash contributions to the Trust to facilitate future enforcement. The IRS has disputed this practice, finding no deductible donation. In the case of Simmons, the IRS disputed that the easement had any value, and that the statutory requirements for grants had been met. The Tax Court disagreed, finding that easements do affect the fair market value of the property, in this case by 5%.

While the IRS allows for charitable deductions for a portion of a property (Section 170 (f)(3)(B)(iii), since you were wondering), the IRS determined that in this case L'Enfant could, theoretically, consent to a change in the facade, countermanding the preservation aspect, and that the mortgage was not subordinated to the easement, making it invalid. The court disagreed with the latter, and found it sufficient that the stated purpose of the easement was preservation, finding that the Trust had the legal means to enforce preservation against the owner. The IRS argued in the alternative that the appraiser, who found an 11% decline in the value of the property resulting from the easement, botched (not their words) the appraisal. While that may be a common complaint in the real estate industry, here the court again disagreed, finding 'before' and 'after' values of properties with easements showed a decline in value, though finding only half the drop the appraiser found.

While the ruling applied strictly to federal taxation, and to the L'Enfant Trust in particular, many states and localities have similar statutes and deduction rules, and the logic of the court's ruling will likely support such statutes as well as other charitable organizations.

Last Chance to Buy a Co-op, Taxes Start October 1st

Considering a co-op for your next home, or getting out of one? Going to settlement this month will be the only way to avoid the hefty taxes that co-op buyers and sellers were once immune to. Thanks to an amendment nestled away in the DC Budget Support Act, the tax benefits of purchasing a co-op will cease to exist as of October 1st. Called the "Economic Interests in Real Property Clarification Amendment Act of 2009," the Act might be better dubbed the co-op killer of 2009. The sale of co-ops, technically a transfer of an economic interest more akin to the purchaser of stock than a transfer in title, is not currently taxed by the District of Columbia. The absence of recordation taxes is one of the few incentives to buying into a cooperative, most of which have more onerous rules than condominiums, carry underlying obligations to the purchaser, and bestow on the Board of Directors the power to reject applicants, all of which tends to suppress the price of co-ops below that of an equivalent condominium. The amendment changes the phrase in the Deed Recordation Tax Act (Section 302b(a) to be specific) from "a transfer of an economic interest in real property" to "a transfer of an economic interest in real property, including shares in a cooperative housing association." Henceforth, co-op buyers, and sellers, will be subject to the same 1.1 % (for properties selling below $400,000) to 1.45% transaction tax that applies to other types of property.

DC Tax Sale Canceled

Washington DC's property sale for unpaid real estate taxes was canceled today. The annual sale was scheduled to begin today, but bidders occupying seats at 941 North Capitol Street were reportedly put on hold several times, only to be told in the afternoon that the tax sale was canceled "indefinitely." DC government officials confirmed that the sale was "postponed," and would be "rescheduled," but gave no timeline for the process.

Registration for the District's tax auction for property in tax arrears began August 31, and the auction was to have started today, lasting until all properties had been disposed of. While District officials would not comment further than to say that a challenge had been filed "to the District's right to set a threshold for the sale of delinquent real property taxes", sources said that the an investor and auction participant had filed a challenge to the process by which the District conducts auctions, seeking an injunction against the auction.

The District had delayed the previous tax sale due to the scandal in the Office of Tax and Revenue.

Better DC Coming to a Park Near You

For every 1000 residents in DC there are 16 acres of park land; are you getting your 0.016 acres worth? As soon as October 1st, the public will have access to the CapitalSpace draft recommendations on parks, with 60 days for feedback. The CapitalSpace initiative is a collaboration of local and federal agencies whose goal is to ensure a thriving parks system in DC by facing challenges posed by maintenance, connectivity, accessibility and quality. If you ever wished there were more playing fields (Frisbee anyone?) or a more accessible path to a park near you, now's your chance. A final plan is expected in the beginning of 2010.

The CapitalSpace program began as a District initiative, with the District Office of Planning and Department of Parks and Recreation partnering with the National Capital Planning Commission (NCPC), later adding the National Park Service (NPS), which manages 68% of District park land. The collaboration began in 2006. Julia Koster, Director of Intergovernmental Affairs at NCPC, described the group as people from different organizations "who shared a passion [for] creating, beautiful accessible parks."

CapitalSpace set out "six big ideas" or areas where the organizations intend to cooperate to make changes and improvements. The six are:

1. Linking the Fort Circle Parks: Creating a walkable green space with historic significance by connecting the series of defensive Civil War forts located in upper NE DC and the southeastern part of the city across the Anacostia.

2. Enhancing Center City Parks: With 30 percent of the city’s future housing growth and 70 percent of job growth likely to occur downtown and along the Anacostia River, the parks in these areas add vibrancy and will be in high demand for active uses. Several case studies will provide the best practices to balance historic character with the demand for new and more active uses. Picture, if you will, picnic and live music in McPherson Square.

3. Transforming Small Parks: Of the city's parks, 67% are small (less than one acre) and, while some get a lot of use from neighborhoods, others have fallen into disrepair. Reinvigorating small green spaces with recreational and historic/cultural significance could provide a meaningful identity for the surrounding community.4. Enhancing Urban Natural Area: In addition to providing recreational areas, the parks protect natural features and ecological functions. Current standards are not always sufficient or well enforced. The plan would redouble efforts to repair and improve the natural benefits of parks.

5. Improving Playfields: While Washington has over 1,000 fields, playgrounds and courts, the expected population growth will mean even more demand for the limited fields available. Currently there are 2.17 fields (including soccer, football, baseball and softball) per 10,000 residents. DC compares poorly to other cities - Boston, Philadelphia and even Baltimore average 3.84 fields per 10,000 residents. The plan will improve current fields and may identify one or more locations to create complexes of regulation size fields in the city.

6. Improving Public School Yards: DC Public Schools (DCPS) run 30% of the city's fields, playground and courts. Hours are inconsistent, and, with school closures, the community is losing acreage. The partnership suggests working together to extend hours of operation, provide safer access to facilities and improve quality.

It is still unclear how the various plans will be funded and in what order of priority. Tammy Stidham, Regional GIS Coordinator for the NPS, said there is no collective pot of money because of issues with mixing state and federal funds. But the group hopes to determine funding on a case-by-case basis to see where jurisdictions overlap and create a division of responsibilities.

Images by EDAW AECOM provided courtesy of the National Capital Planning Commission.

DC v. Federal Tax Credits

A follow up on our recent post about the $8,000 tax credit that will soon expire, and its possible termination, extension, or even expansion: Washington DC real estate shoppers already have a tax credit available to them, a $5,000 credit, also courtesy of the federal government. While the DC-only credit is smaller, there are some advantages to the smaller credit that a buyer should consider.

While the $8,000 credit is available only to purchasers who did not own a principal residence in the three years prior, the DC credit excludes only those buyers that owned a principal residence during the prior year, and only in DC. And the DC credit requires no repayment, even if the residence is sold within three years of purchase, unlike the $8,000 credit. For a full breakdown, see the chart below

$8,000 Credit	$5,000 DC Credit	$15,000 credit (proposed)
Anywhere in U.S.	Only in D.C.	Anywhere in U.S.
Purchased principal residence by 11/30/09	Purchased principal residence in 2009 (subject to annual renewal)	Purchased within 1 year of bill’s passage.
Did not own a principal residence during preceding 3 years	Did not own a DC principal residence in D.C. during preceding year	Other: Divisible into 2 years
Ineligible if modified AGI is $95,000 or greater ($170,000 if MFJ). Phase out begins at $75,000 ($150,000 MFJ)	Ineligible if modified AGI $90,000 or greater ($130,000 MFJ). Phase out begins at $70,000 ($110,000 MFJ)
Cannot claim if claimed D.C. First-Time Homebuyer Credit in any prior year	Cannot claim if eligible for First-Time Homebuyer Credit or if previously claimed the D.C. First-Time Homebuyer Credit	Cannot claim with any other homebuyer credit
Repayment required if the residence is sold within 36 months	No repayment	Repayment if residence is sold within 24 months

DC Property Tax Auction: All Inventory Must Go!

Washington DC's tax sale is on. Well, almost. Registration for the District's tax sale auction for property in tax arrears begins on Monday, August 31, and ends September 4th, so don't delay - act now - to get your next house on the cheap. The auction of delinquent properties will take place starting Wednesday, September 9th, and continue until all properties delinquent as of October 1, 2008, have been sold.

Property with less than $1,000 in back taxes may be put on the block to a willing bidder. So is this the place to pick up the home you thought you couldn't afford? Not really, says David Kanstoroom, a title attorney with North American Title. Because the District provides a statutory right of redemption (an American value, you know) for auctioned properties, wayward owners may pay the back taxes, penalties and interest, and in so doing reclaim the property. "A high rate of these properties - 90 plus percent - are ultimately redeemed by the original owner" says Kanstoroom. According to Andrew Schechter of M and M Search Service, a title search abstractor and auctioneer, the point of the auction is often not to obtain title to a property, but to invest in a distressed property and collect interest from the previous homeowner.

Auction participants, who technically purchase the lien on the property, not the actual title, are entitled by DC law to earn 1.5% interest, per month, on the tax lien amount, to the homeowner that wants to redeem the property. Investors are therefore bidding on the amount of the tax lien, plus whatever surplus they determine the investment will justify.

Schechter notes that 4 months after the tax sale, investors can begin charging homeowners for actual title search costs, and 6 months after the tax sale they can begin charging "reasonable" attorneys' fees, a point at which the real money may kick in. Because the process is judicial, rather than administrative, the length of time to process the sale is determined by the court, but a case cannot be opened until 6 months after the tax sale.

Homeowners will still have to contend with penalties by the District, and any other outstanding liens, but according to Schechter, the District's intent is not to make tax sales an easy route to home purchasing. While it may be easier in Maryland, where the homeowner conducts the same type of transaction directly with the state, rather than a private investor, Schechter says the message from the DC government is simple: Don't attend the auction to pick up the home, go for the high interest accrued on the delinquent taxes. If its ownership you're looking for, you'll just have to go about it the old-fashioned way and search online.

The sale will be held at 941 North Capital Street, 4th floor.

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

Inclusionary Zoning: DC's Mandatory Subsidized Housing Rules Kick In

The District's controversial new "inclusionary zoning" rules come into effect this week; rules that come with a raft of new regulations, a hefty price tag, an outsourcing of social services from the government to a private industry, and a potential to drag down land values that are already plummeting. That, anyway, is the fear many land developers feel about the District's new inclusionary zoning rules. Beginning August 14th, Washington DC's lengthy new rules begin applying to housing providers, requiring subsidized housing in new projects of 10 or more units, and laying out a regime for building, tracking, verifying, and regulating housing going forward. While the legislation - the Mandatory Inclusionary Zoning, or "IZ", to some - has some exemptions by neighborhoods, zoning code, and building type, it is expected that most new apartments and condos will be required to offer moderate and low income housing going forward. DCMud provides the following summary for how the new rules will apply: 

Property Type: The new rules require that new buildings (or groups of homes) with 10 or more units, or existing buildings of 10 or more units that are increased in size by 50%, provide 8 to 10% of new units as affordable (or up to 75% of the bonus density, whichever is greater), depending on construction type and zoning district. Exemptions exist for student housing, hotels, and embassy housing. 

Beneficiaries: Inclusionary units will be set aside in all buildings that fall under the mandate of the new regs, for "moderate-income households" - applicants making up to 80% of the Area Median Income (AMI). In some zoning districts, 50% of those inclusionary units will be reserved for "low-income households," or applicants making less than 50% of AMI. Current income levels, based on HUD's figures, mean that a family of 1 would have to make $35,950 or less to qualify for the 50% AMI rule, and $57,500 for the 80% qualification. A family of 4 would have to make no more than $51,350 and $82,150, respectively.

Where: The MIZ rules were intended to apply in most of the District, with exemptions for low-density neighborhoods for which additional density would be out of character, according to the District's zoning map, i.e. zone R-2 through R-5-D, C-1, through C-3-C, CR, SP, and W-1 through W-3. Because developers receive a 20% density bonus for complying with the regulations, historic sections where added density would be inappropriate are excluded, including portions of downtown, Dupont, Georgetown, Anacostia, Southeast Federal Center, and Eigth Street (SE) Overlay. 

What: Builders must provide units of comparable size, unit mix, "exterior design," "finish," "materials," and "interior amenities," while still allowing for "less expensive materials" in affordable units. Inclusionary units must be in the same building, unless a special exemption for off-site construction is given. 

How to find them: Owners of subsidized units will be required to notify the Department of Housing and Community Development (DHCD), which will keep a database and, for each new housing unit, make a determination of the appropriate sale or rent price, and conduct lotteries in the event of over-enrollment for new housing. Purchasers of subsidized condominiums will be required to continually verify their resident status, but will not have to re-qualify for income. Washington DC residents will have some priority over non-DC residents, but the latter will qualify. The DC government has issued a preliminary website for guidance, and will help potential occupants search online for available units. The regulation of the new regime will be administered by the Department of Consumer and Regulatory Affairs and the DHCD. And while the regs may trigger fears of additional bureaucracy within the DC government, according to Sean Madigan, spokesman for ODMPED, the new system is intended to use existing facilities to govern the process without adding a new layer of staff. Madigan says the rules will have a "phased introduction" that will be put into place over the next few months as plans gel into administerial mechanisms. The new rules have been a long time coming, having been debated for years when finally adopted by the Zoning Commission on May 18, 2006. The DC City Council codified the rules in the same year in legislation that required the Mayor's office to issue new rules on the subject. But amidst drooping development prospects, those rules were not issued until May 14, 2009, to the consternation of affordable housing advocates and the relief of housing providers. Under the codifying legislation, those rules would take effect 90 days after publication.

Washington DC commercial real estate news

Area Housing Projects Look to Affordable Housing for Salvation

As reported last month, DHCD recently received $33.7 million in stimulus funds for the development of affordable housing in the District. According to DHCD spokesman Angelita Colon-Francia, the distribution of the federal money is currently under review, pending the evaluation of 21 projects currently seeking Federal Low Income Housing Tax Credits from the agency. In a release by the District government, it is clear that a number of recent developers are hoping that money will find its way to their projects. The list includes several developments presumably slowed by declines in the real estate market, including NDC's The Heights on Georgia Avenue, Matthews Memorial Terrace and Banneker Venture's Florida Avenue WMATA site project, which have all applied for stimulus money for affordable housing creation in their projects. Comments on applicants are due to DHCD by July 16th.

But fear not, federal-dollar-seeking developers, DCHD will submit another application for round two of American Recovery and Reinvestment Act funding on July 17th. To date, the Department of Housing and Urban Development has awarded the District $94.5m of the $10 billion it has distributed nationwide in funding as a result of the American Recovery and Reinvestment Act of 2009. Funding will be applied to foreclosure prevention, homelessness prevention, "community development", affordable housing, and lead hazard prevention.

Downtown BID: State of the Downtown

The Downtown Business Improvement District (BID) issued their 2008 State of Downtown report this week and found that - for an imploded real estate market - things aren't so bad. The BID, which represents the downtown core of Washington DC from Union Station to the White House below Massachusetts Avenue, reports a general trend of rising job rates, more residents, and fuller commercial buildings.

Among the statistics compiled for the report are the creation of 3,800 jobs during 2007 and 2008; 250 new residents during 2008, for a total 7,600; a "record year" for downtown hotels, which boasted a 75% occupancy rate; and a Class A commercial vacancy rate of only 9.6%. Though no new buildings have broken ground since the financial crisis began in September of 2008, commercial projects already under construction are expected to drag down both occupancy and lease rates.

A growth in both daily Metro ridership (108,000 on weekdays, 41,000 on weekends) and tourist attendance (10.1m visitors, give or take a few) helped fuel a rise in "destination restaurants" from 113 to 122.

DC Reveals Management and Style Guidelines for City Property

Mayor Adrian Fenty yesterday unveiled the Office of Property Management's (OPM) first-ever District of Columbia Facilities Plan - a "comprehensive strategy" for managing and consolidating the DC government's 18 million square feet plus of property and 3.7 million square feet of privately leased space in a streamlined and cost efficient manner.

The OPM plan outlines measures that will reduce the city's amount of leased space by 13% (roughly 500,000 square feet) over the next year by relocating staff to shuttered DC public schools and consolidating warehouse operations. It also provides concrete timelines for the construction of new District-owned office space - including the currently underway Department of Employee Services at Benning Road and Minnesota Avenue, NE (pictured) and the recently announced MPD Property and Evidence Warehouse in Southwest. DC Public Schools and Libraries, however, will be unaffected by the Facilities Plan, as they are governed by their own distinct agencies.

The plan includes a provision requiring all DC-sponsored projects to meet a minimum LEED silver certification. OPM Director Robin-Eve Jasper did, however, point out that the plan is “Version 1.0” and will be subject to revision as new opportunities present themselves.

"A lot of things change about property – about the needs, about the market and other things - are very dynamic in real estate. We will be regularly updating this plan to address new things that come up,” said Jasper.

In addition to the master Facilities Plan, OPM also used the occasion to announce the release of its HOK Architects-authored (and phone book thick) Workplace Design Guidelines that, in the words of District reps, “standardizes the materials and furnishings that can be used in District office buildings” through bulk purchases and codified style standards.

“This will be a common brand making sure that efficiencies bring big cost savings,” said Fenty. Because, as we all know, the best way to attract DC’s best and brightest to local government is by forcing them to all use identical mauve swivel chairs in their mass produced cubicles. Oy.

DC Proposes Tax on Co-op Sales

The Washington, DC Council has proposed taxing the sale of co-ops in the District, a move that would bring the transaction tax on co-op units into tax parity with the sale of fee simple and condominium sales. The new tax measure, buried deep in the Fiscal Year 2010 Budget Support Act of 2009, proposed by Chairman Vincent Grey, proposes to add a transaction fee to the sale of a co-op unit for both the buyer and the seller - 1.1% for sales under $400,000, 1.45% otherwise.

The sale of co-ops, technically a transfer of an economic interest rather than transfer in title, is not currently taxed by the District of Columbia; the proposed law would add an "economic equivalent" tax at the same rate as the transfer (tax on the seller) and recordation (tax on the buyer) taxes currently imposed by the District. While co-ops represent only a small fraction of real estate transactions, the District reckons it could pull in an additional $5m to $6m per annum for the next few years with the additional tax burden, compared to the $118m the District siphoned from transfer and recordation taxes last year.

The absence of recordation taxes is one of the few incentives to buying into a cooperative, most of which have more onerous rules than condominiums, carry underlying obligations to the purchaser, and bestow on the Board of Directors the power to reject applicants, all of which tends to suppress the price of co-ops below that of an equivalent condominium. The tax would take effect next year. In other words, sell now.

EE&K Tapped for Three District Projects

Ehrenkrantz Eckstut & Kuhn Architects have been awarded three multimillion dollar contracts in the District of Columbia, according to a statement released by the architectural firm. The first entails designs for a new gateway to the city’s “monumental core,” while the remaining two involve the creation of a master plan for Northwest’s Mount Vernon Square neighborhood and the modernization of Glover Park’s Benjamin Stoddert Elementary, respectively.

The first project reaffirms the city’s intent to install a definitive entrance to Washington’s tourist attractions. According to the press release issued by the firm, “[t]he study will be focused on North Capitol Street from Michigan Avenue to Hawaii Avenue, NE, and Irving Street/Michigan Avenue from First Street NW. The gateway would bring a sense of place to the adjacent neighborhoods and improved balance between the pedestrian focus of those neighborhoods and vehicular traffic flow and provide the initial design ideas for replacing an unsightly highway-style interchange with a more pedestrian-oriented design.” There’s no word, however, on when the first conceptual designs might begin to surface.

Meanwhile, in cooperation with the District’s Office of Planning and Department of Transportation, EE&K will be implementing infrastructural flourishes throughout the Mount Vernon Square with the hope of artfully integrating the borders between the Square, the recently opened Convention Center, and the historic Shaw neighborhood. EE&K has previously worked in a similar capacity with both the District’s Hill East neighborhood and Baltimore’s Inner Harbor.

For their third and final District-sponsored project of the New Year, EE&K has been paired with Setty & Associates and KLTH Engineers to "modernize and expand" Ward 3’s 77-year-old Benjamin Stoddert Elementary School. The long overcrowded school will receive a new gym, cafeteria and media center under the guidance of the development team, while the school’s 6.5 acre plot has also been earmarked as the site of a new “intergenerational community center” by the Department of Parks and Recreation. EE&K principal Sean O’Donnell will be overseeing the school renovation and has assured the community that the firm has a wealth of experience when it comes to “[creating] sustainable 21st century schools that are the center of their communities.” EE&K has previously supplied designs for other local educational institutions, such as the School without Walls and Washington University’s Foggy Bottom campus.

DC's "Nuisance Properties" Headed to Auction

Mayor Adrian Fenty was joined by Department of Housing and Community Development (DHCD) Director Leila Edmonds today at a vacant Columbia Heights townhome to announce an auction of District-owned "nuisance properties" tomorrow afternoon.

"These are neighborhood nuisances and they've been the site of numerous problems. What councilmember, what citizen activist, what great media person hasn't heard the tales of nuisance properties like one behind me [at 3004 13th Street, NW] causing problems with everything from rodent infestation to plain old visual blight?" said the Mayor.

In total, 31 properties located in the DC neighborhoods of Columbia Heights, Shaw, LeDroit Park, Trinidad and Deanwood will hit the auction block (all of which can be viewed here). All were acquired through eminent domain, foreclosure or “friendly” sale and represent just a fraction of the city’s inventory of derelict properties. According to Director Edmonds, funds raised from the auction will benefit the city’s affordable housing fund and, if successful, another round of sales open to the public could occur in the near future.

The auction will be held Friday, January, 30th at 2 PM at 441 Fourth Street, NW. The Mayor projects that the “more than 200 developers and investors” who turned up for last week’s pre-bid conference will be in attendance and the public has been encouraged to participate as well. Prospective bidders will be able to register on site, provided they can meet the city’s minimum price point of $10,000. Those who purchase property at the auction will be required to have their properties in fully operable condition within 18 months or face the prospect of ownership reverting to the District. Additionally, they will also have to meet a series of DCHD-dictated expectations in restoring the once neglected homes.

“Bidders and potential purchasers will be required to fulfill the certified business entity requirements within the District. So, not only will we get these properties back into productive use, but we will also be fulfilling the mandate and mission to get them to help people find job opportunities” said Edmonds.

Fenty and Edmonds also used the opportunity to unveil the DHCD’s new “interactive housing database,” dchousingsearch.org – a site that aggregates both “rental and homeownership opportunities throughout the city.”

“Until today there wasn’t one place that you could go and find affordable housing in the city,” said Fenty. “That changes with the great work of DHCD. Obviously, it’s impossible for us to mandate affordable housing providers to give us information, but I think there’s great incentive for them to do so. We already have 5,672 total units in the system…and we have to date 64 housing providers that are registered as active within the system.” More 600 of the site's listed units are currently available.

Washington DC real estate news

DCMud Reviews the Capitol Visitor Center

Last week, DCMud became the first media outlet in the world to take a behind-the-scenes tour of the new US Capitol Visitor Center (take that, Matt Lauer). The Visitor Center is scheduled to open to the public on December 2nd, the product of an 8-year, $600m, 580,000-s.f. construction project. Conceived originally as a tourist-friendly entryway that happily banished the surface parking lots and delivered the eastern lawn of the Capitol closer to the status quo ante of Frederick Law Olmsted's design, the Visitor Center now serves as the only public ingress to an increasingly restricted, post-9/11 Capitol.

Described by its detractors as a "monument to waste", and its defenders as better, cheaper and more justified than DC's new ballpark (with an expected 40 year life-span, at that), the project will be open to media scrutiny starting next month.

At 580,00 square feet, the RTKL-designed Visitor Center is nearly three-quarters the size of the newly expanded Capitol. Of that, 210,000 square feet will be accessible to the public; the rest is dedicated to private meeting space for the House and Senate. In all, it represents the 9th addition to our nation’s most recognizable building and the single largest incremental building project since the structure was (arguably) declared complete in 1863, after the Statue of Freedom was added to the Capitol dome.

Stretching from the eastern edge of Capitol steps to 1st Street, the street-level roof of the three-story Visitor Center will serve as the main pedestrian common, replacing the congressional parking lot. The landscape has now been transformed into a plaza that recalls Paris’ Louvre Museum with two raised skylights surrounded by long, shallow reflecting pools, providing both an architectural feature and strikingly bold views of the Capitol dome from within. At the rear, in view of the Supreme Court and Jefferson Building, the misting fountains from the site’s previous incarnation have been retained and will be turned on once again for the first time since the 1976 Bicentennial. The original, ornately designed parking lot lampposts have been preserved, albeit with a fresh coat of paint and in a slightly new configuration.

After a trip down a grand outdoor staircase and across the new visitor’s reception green – which features historic, recently transplanted Capitol trees - visitors will be ushered into the Center itself. Painstakingly designed to be architecturally true to the old Capitol, down to the flawed marble that mimics the original material, and statuary that once sat under the dome, the entry hall is impressively grand for a structure invisible from the street. While it may lack the architectural awe of the original Capitol, the grandeur of the dome, or the detailed beauty of the original frescoed ceilings, it is the Center's ability to move masses of people on a continuous basis that prevailed as the Center's design theme. Unlike the older portion of the Capitol, designed to stupefy the People with a building worthy of its ambitious and newly codified experiment in government, every feature within the Visitor Center is composed and synchronized to give 2500 sightseers per hour the full Capitol experience without venturing above ground, and shortening the epic wait time that tourists sometimes encounter.

As a start, eight magnetometers replace the one that tens of thousands passed through yearly. Once inside, visitors are free to explore at their own pace or queue for a “timed visitor’s pass” to secure a guided tour.

The first view of the Visitor Center is Emancipation Hall, a grand entry meant to showcase the diversity of America’s leadership. Populated by state icon statuary such as Hawaii’s King Kamehameha, North Dakota’s Sacagawea, Montana’s Jeannette Rankin (the first female member of Congress), and Utah’s Philo T. Farnsworth (the bane of most parents as inventor of the cathode ray tube). The Hall is clad in pink Tennessee granite and intended as an alternate space for presidential inaugurations in case of inclement weather. It is from within the Hall that aforementioned skylights offer up inspiring views of the Capitol’s dome - a view sure to be emblazoned upon post cards in the gift store.

Standing front and center in Emancipation Hall is the original scale model of the Statue of Freedom, the byproduct of which now perches on the Capitol dome. The model was moved from a storage space in the Dirksen Senate Office Building, where it had been mothballed, to become the appropriate centerpiece of Emancipation Hall - having been casted by a slave that went on to win his freedom.








The first stop off Emancipation Hall is the Orientation Theater, premiering a 13 minute film entitled “Out of One, Many,” (as in e pluribus unum, as on the seal of the United States, we remind our less civic-minded readers) directed by documentarian Donna Lawrence. The film is a visual timeline of landmark legislation passed in Congress, cast across a 34-foot Imax-like screen, with sound effects that reverberate through the 250-seat theater.

The Visitor Center experience ends in the Wall of Aspirations - a state of the art museum divided into sections, each dedicated to one of the underlying principles of the founding political philosophy - virtues such as Unity, Freedom, Exploration - each with its own section and relevant historic documentation. Documents such as Abraham Lincoln’s original notes for the Emancipation Proclamation will rotate in and out of the museum as the themes themselves change. Other attractions within the museum include a 1:20 scale recreation of the Capitol dome, interactive displays and “virtual theater” recreations of the House and Senate, with live feeds of each chamber.

And what would a trip to DC’s tourist attractions be without pricey museum food? The Visitor Center also sports a 530-seat restaurant that will highlight different types of American cuisine, rotating among state and regional cuisines.

The project initially broke ground in June of 2000. Following the events of September 11th, the original $265 million budget ballooned to $621 million – a sum that went in part toward a variety of cutting edge security features to be employed throughout. Most will be unnoticed by the visitor, while some security upgrades - such as moving the truck delivery bays underground - will offer aesthetic improvement. Delivery trucks will now enter through a subterranean tunnel that curves around the norther perimeter of the Capitol, freeing the outdoor space from the vehicular traffic and pavement that has marred the Capitol grounds for decades. The Visitor Center will be open to the press later this month, and open to the public in December. Metropole