The Shaw Redemption

Five metro area developers came together last night to highlight their major (and we mean major) plans for the District's Shaw neighborhood. Hosted by the Shaw Main Streets initiative, the developers on hand included Douglas Development (Wonder Bread Factory), Marriott Hotels (Washington Marquis Marriott), Roadside Development (City Market at O), Metropolitan Development (Kelsey Gardens) and Hines Interests (CityCenter DC).

Douglas Development
The keynote of Douglas' presentation was the long-gestating revitalization of the former Wonder Bread Factory at 641 S Street NW. Contrary to initial plans, the building will not be razed. The developer has obtained the original plans for the facade and will, to the best of their ability, restore the building to its original 1922 appearance. An additional story will be added to bring the building up to 5-stories and 150,000 square feet. The project has been summarily approved by the Historic Preservation Review Board (HPRB) and is aiming for groundbreaking in approximately 7 months, following permit approval. The developer expects construction on the GTM-designed facility to take no more than a year. Once completed, the former Wonder Bread facility will neighbor the proposed Radio One development (the outline of which can be seen in the accompanying renderings).

Several other Douglas projects underway in Shaw were also briefly touched upon. The developer’s proposed development at 600 New York Avenue NW is on hold due to the current economic situation and "lack of synergy," as is their proposed redevelopment of the Howard CVS.

Other projects, however, have had much more luck getting off the ground. The former site of Popeye’s at Florida & N Streets NW will complete its expansion and renovation in the next 3-4 months and will house a Fatburger chain restaurant, a cell phone retailer and office space. Another Douglas mixed-use development at 9^th & N Streets, NW will include ground floor retail, office space and apartments. Although poised to begin construction in the coming weeks, leases for the site will not be sought until the project is completed.

Marriott HotelsThe long-proposed (circa 2001) Washington Marriott Marquis Hotel at 9^th Street & Massachusetts Avenue, NW, long envisioned as an anchor servicing the Washington Convention Center across the street, is now slated to break ground in the first quarter of 2009. Overseen by the Quadrangle Development Corporation and designed as joint venture between TBS Architects and Cooper Carry Architecture, the building comes in at over 1 million square feet. The 13-story project will feature 1250 rooms, 2-3 restaurants, a ballroom and meeting space and a 400 space underground parking garage – all enclosed under an all-glass atrium. Additionally, the Pepco power station and AFL building currently on the site will also be incorporated into the hotel’s footprint, with the latter being converted to hold 42 hotel rooms. The Marriott representative on hand described it as “one of the most complex projects we’ve ever worked on.” The project is hoping to achieve an LEED silver certification.

Roadside Development

The City Market at O is shaping up to bring big changes to the current site of Giant Food on O Street NW. The mixed-use development will feature a new Giant store that will retain the old façade of the O Street Market and was hailed, as least by the pitchmen, as outclassing the new CityVista Safeway in both style and function. Additionally, the site will give way to a new 200 room, limited-use hotel, a large-scale fitness center, a 6000 square foot independent restaurant featuring a local chef, and 600 apartments and condominiums targeted towards “young professionals.” 8^th Street will also reopen for pedestrian use between the two buildings on the site, parking for the facilities will be moved underground. Roadside showcased some interesting architectural features on the buildings, including a 2-story projection on the residential building – currently referred to as “the diving board.” The developers are currently in negotiations with the Deputy Mayor’s Office for Planning and Economic Development (DMPED) to receive Tax Increment Financing for the project and are hoping for a September 2009 groundbreaking.

Metropolitan DevelopmentThough Metropolitan’s Kelsey Gardens has been recently covered by DCMud, the developer still had a few surprises on hand for their presentation. Architects will employ the increasingly common urban technique of breaking the 14,800-square foot, 297-unit building into five distinct facades, in order to affect the appearance of being constructed during different time periods by different architects. Roofs of the “buildings” will be 50% green and feature both private and public terraces. The development will be complimented by 2 levels of underground parking that will feature preferred parking spaces for “energy efficient vehicles” (i.e., hybrids). The project is shooting for 2011 completion.

Hines Interests
The final presentation of the evening concerned the redevelopment of the site of the old convention center, Hines Interests and Archstone’s CityCenter DC project. Designed by Foster + Partners and Shalom Baranes Architects, the 10-acre site is being envisioned as “a new neighborhood for downtown.” Comprised of 4 separate parcels centered around the now-closed (and eventually to be reopened) intersection of 10^th and I Streets NW, the ambitious project is to include 400,000 square feet of retail space, 1,074 residential and hotel units, 1,064,000 square feet of office space, more than 2000 parking spaces and a public park. The hotel on the site is envisioned as a 4 or 4 ½ star facility, while the developer is aiming to lure home furnishing and fashion retailers (possibly a department store) as well – in order to serve the needs of downtown residents and not specifically tourists. The Hines representative on hand posited that the project was 85% ready to go and would be seeking general contractor in the next few weeks.

Whitman-Walker Goes High-Rise Residential

The JBG Companies are moving quickly with their proposed redevelopment of the soon-to-be former headquarters of the Whitman-Walker Clinic. Located at 1407 S St. NW, flush with the corner of 14^th, current plans call for the construction of a 7-story residential building to be complimented with ground level retail. The as-yet untitled development is aiming for a late fall 2009 groundbreaking with completion slated for two years thereafter.

The Shalom Baranes-designed building will contain between 120 and 130 residential units in its 120,000 square feet and top out at 75 feet above grade. Although floorplans and designs have yet to finalized, Andrew McIntyre of the JBG development team told DC Mud that the developer is "definitely leaning towards high design, efficient units." JBG is currently engaged in talks with the city government regarding the inclusion of affordable housing in the project.

The development should be an alluring addition for local businesses, as it will stand on a block that already houses several chic inner-city destinations such as the Café Saint-Ex, the Pulp boutique and the Black Cat nightclub - venues that are filling up the rapidly developing 14th Street retail corridor. JBG is currently vetting prospects for the site that include a grocery store, a pharmacy and a restaurant. “It will be a complement to the retail that you find up and down 14^th Street and in the whole Logan Circle neighborhood,” said McIntyre. “We’re really excited to building over in that corridor. There’s a lot of opportunity at such a vibrant location in the city.”

Since the developer acquired the parcel at 14^th and S Streets NW last June, designs for the development have been undergoing both internal reviews at JBG and before the Historic Preservation Review Board (HPRB). Having made the necessary revisions according to the HPRB’s specifications, designs will once again go before the Board in October.

JBG acquired the Whitman-Walker Clinic’s administrative headquarters last June for $8 million, though the facility will remain operational until the end of the year. McIntyre characterized the developer’s relationship with the prominent local HIV-AIDS and social services organization as a win-win situation for both parties:

“They are actually condensing their operations into their other existing building. We stepped in because Whitman-Walker was looking to fund the shortfalls from their operation through other sources. This was an opportunity for us to help them out and a very mutually satisfying opportunity from the standpoint that we really believe in their mission.”

Insider Interview: Scott Pannick of Metropolis Development

Scott Pannick, the founder and CEO of the Metropolis Development Company, is preparing to launch his fifth and largest condo project on the 14th Street corridor - the Metropole - and find out what he thinks of his latest project, how having a Harvard MBA helps give perspective on market fluctuations, and what would happen if he had to do it all over again.

How did you break into the development game?

I was a commercial broker for almost 20 years. The last 10 of which I spent acting as a representative for large institutional and corporate users in the development of corporate headquarters. Though I was a broker - I was in fact representing people in their real estate transactions and not the principle - nevertheless, I was actually acting in the role of a developer.

Was that here in the District or out of state?

I did projects here in Washington and elsewhere. I built the headquarters for the Educational Testing Service in Princeton and the headquarters for Bristol-Meyers Squibb in Princeton. I built the headquarters for Core State Bank of Delaware, close to Princeton in Lawrence. I also did the American Red Cross Headquarters here. The last project was to represent the federal government in the development of the headquarters of the Department of Transportation – although in that case I didn’t act as a developer, I acted as a representative for the government and, at the end of the day, hailed the competition to name the developer.

You started with Langston Lofts on 14^th and then built three more on the same street. Was there an initial vision to stay on that corridor from the beginning, or was it just serendipity?

The two first buildings were almost simultaneous. One was Langston Lofts on the corner of 14^th and V Streets and the other was Lofts 14 on the corner of 14^th and Church. If you look at District zoning from Georgetown across, for the most part, you see fairly low density zoning and 3 and 4-story maximum buildings. The first time that you see zoning that pops up higher than that is 14^th Street. That was also incidentally just where the development line was, where the renovated versus the un-renovated was. So, 14^th Street was a very logical place to look to pursue development.

If you knew now what you knew 8 years ago, what would you do differently when developing a project in the District?

In all honesty, if I knew then what I know now, I never would have done this. From my perspective, the biggest obstacle has been construction. Construction is an enormously difficult business in its simplest times. It has turned out – and everyone has experienced this – that condominiums are, frankly, more complex than virtually anything. I had a construction manager who worked for me for a while who had built BWI Airport and made the comment that condominiums were more complicated that airports. It’s a building that has enormous density in it – in other words, there are kitchens, baths, independent mechanical units and every unit has its own plumbing system and its own selection of finishes. So you’re building a building with 80 or 90 individual units, all of them different, all them having complexity.

If contractors can do one thing and do it repetitively, it’s great. But because of the fact that this is urban in-fill development, it’s very very space constrained. And because of those space constraints – and lot lines limitations and Historic Preservation Review Board input - you end up building with 90 units using 35 different floor plans. If you’re out in the suburbs and you’ve got no lot line restrictions, you can work it out so all the units are the same. But when you are building in the city, literally every side of the building is constrained by height and lot lines, so you are trying to fill that box with usable space. It becomes impossible to just take something and repeat it.

Is your newest building, the Metropole living up to your initial vision?

I think it’s actually better than I had anticipated. I think it’s a beautiful building, it sits magnificently on the site and I think – I’m a developer so I have prejudices – if you’re going to live downtown, where better would you want to live? It’s kind of where the action is. There are two premier axes – one would be 14^th and P and U Street being the second because it’s another street that goes all the way across town.

What sets the Metropole apart?

I think a number of things. One of my criteria working with the architects [RTKL] is that I want all of the units to have some kind of ‘wow factor.’ There are lots of units with 18 foot ceilings or floor to ceiling glass – lots of very exciting space. We were fortunate to be able to negotiate a contract with Vida for a major fitness facility in the building, which obviously in today’s world is something that people are interested in. We put 70 extra parking spaces into the building that will be available to the public, but will also be available to residents if there mother-in-law comes for a stay.

Lastly, I’d say that the architecture of the building is more dramatic than most others. If you look down the north side of P Street, there are 4 new buildings. We built the 2 buildings on the west and the east end of the block and if you look at the architecture, I think it’s more exciting. Higher end finishes and higher end materials.

What is your take on the current crunch that the housing market is undergoing?

I think it has two ways in which it affects us. One is that across the board for buyers of everything – whether it’s housing or corporate financing or whatever – money is more difficult to obtain. Therefore, lending criteria are more difficult and it strains some buyers. Many buyers have equity from previous homes and have no problem with it, but clearly, the credit crunch is a factor certainly for first time home buyers and people with poorer credit.

Secondly, the overall real estate and general economic news just makes everybody nervous and causes them to pause. The fact of the matter is that if you look at the DC condominium market, there are no more than 2 or 3 projects at most that we would consider to be comparable to our own without really looking at significant compromises on location or finishes. There’s really a very, very limited supply. It’s not like New York where there’s 25 buildings or even 50 that you could look at. In Washington, if you’re planning on living in a really high quality building, there’s really only 2 or 3 buildings that you can look at.

But the problem we have is that you turn on the nightly news and you hear the generalized problems in the housing market. Housing prices may be continuing to fall in Des Moines, but they did not ever fall in downtown DC. We didn’t lower our prices and I don’t of any high quality product that has either. Yet at the same time, the condominium inventory over the last 18 months has diminished dramatically - both because there continued to be sales and because projects have converted from condominium to rental.

I’ve been through this for 25 years and there is an absolute pattern that occurs every single time. The market gets soft – whether it’s by over-supply or credit crunch or poor economy – and everybody stops building. The market tightens and prices go up. Now whether that occurs in 6 months or 18 months is always hard to predict, but the fact of the matter is that I would bet that 3 years from now – and it could be 6 months from now – that prices go up and they’re going to go up fast. All of the sudden, people are going to say, ‘Whoops, there’s no more supply’ and grab for the last units. Then we’ll go into a 3 year period where there will be no product. Nothing. And people will say, ‘When are you going to build another building?’ And that’s the way the cycle goes.

Do you ever see yourself tackling a Metropolis project outside of the District?

You know, I’ve been asked that question many many times and I always say no. I did a lot of commercial projects in other jurisdictions, but real estate is a very local business –in terms of knowing the markets, knowing the players and knowing products. I’m not a guy who is interested in developing a big company with a big staff, so that we can do this on kind of a formulaic basis. I’d be more inclined to do projects that feel comfortable to me because of my own knowledge base.

I also am – for reasons of global warming and urban sprawl – ultimately an urbanite. I believe that cities are healthier for our planet. I could go to other cities and know nothing about them. I could go to the suburbs and feel like I was contributing to the decline of the planet.

What would consider your proudest accomplishment?

Probably the Metropole and I say that seriously. The earlier buildings I think came out beautifully, but they were, to some degree, learning experiences. Many of things that I saw in the earlier buildings that I was not as comfortable with we’ve now overcome as obstacles. Now I look at the Metropole and it’s a beautiful building. I’m very excited about its delivery in the next couple of weeks.

What is your dream project?

I’m going to contradict everything I just said. I think it would be really exciting to build a skyscraper. What happens when you build a really big building like that is – because of the magnitude and scale of it – you can put all sorts of amenities in it. A thousand unit complex can afford to support many more amenities. I’ve always been much more excited by big projects.

But that is going to be impossible to do on 14^th Street. I do have some future projects, but they’re going to be on the same scale as we’ve worked on so far.

Trammell Crow Brings a Big Budget to Arlington

The residential arm of Dallas-based developer Trammell Crow Residential (TCR) today announced imminent groundbreaking for its latest "luxury rental apartment community" in south Arlington. The project, entitled Alexan Twenty-Four, was first announced last summer, and is being billed as joint partnership with Prudential Real Estate Investors (PREI), a division of Prudential Insurance Company of America that commands over $20 billion in net assets.

The 217-unit development will include 20 units reserved for affordable-housing and will come in at five stories once completed. The developer is promising "resort-style amenities" for future residents, including "a pool, clubhouse, fitness facility, game room and business center."

The uniquely titled project gets its name from its location at 2400 24^th Road South, the former site of an Econolodge motel, following its "Alexan" brand. Despite the parcel’s pedigree, the Bank of America will be supplying $70 million in construction. The site stands roughly a quarter mile from the bustling intersection of Glebe Road and I-395.

A press release from the developer hypes the site as "a natural extension of the famous Rosslyn-Ballston corridor," one that also includes the boutique “urban village” of Shirlington, Columbia Pike and the historic community of Nauck.

Alexan 24 is expected to commence work shortly with a scheduled delivery date somewhere in the third quarter of 2010. TCR broke ground on its last project, the Alexan Carlyle, last January.

Arlington Virginia retail and commercial real estate news

Savoy Court Condominiums

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Washington DC real estate news

Developer Chosen for 5th & I

The District of Columbia announced this morning that it is partnering with developer Donohoe Companies to bring a high-end hotel, retail outlets and jazz club to the soon-to-be booming Mount Vernon Triangle. In a press conference held this morning, Washington DC Mayor Adrian Fenty laid out the changes that will soon be coming to the District- owned site at 5^th and I Streets NW and praised developments in the area as a whole.

"It's important that we move these projects fast, that we get them out to developers who know what to do with them and I think that...in less than a year we've demonstrated that we're not just holding onto these properties," said Fenty. "We're allowing them to be developed for the benefit of the community."

Those benefits will take the shape of a 475,000-square foot development, titled Arts at 5^th & I. The project will center around a new 260-room ME Hotel from luxury Spanish hotelier, Melia and also include - promoters say - a bicycle retailer, hardware store, book store/café and new outlet for the Zenith Art Gallery. Perhaps most exciting for local residents, who lobbied the city for more entertainment-oriented projects in the neighborhood during the 6 month bidding process, will be the addition of a new music venue in the form of the Boisdale Jazz Club – the first US location from the London-based chain of nightclubs.

A new apartment complex sporting 166 apartments will also be springing up on the site, with the developer pledging to a minimum of 50 affordable-housing units within the building. Rounding out the proposal is a 238-space underground parking garage. Groundbreaking is a projected 18 months away, following approval by the City Council.

Jad Donohoe of the Donohoe Companies outlined future plans for not only 5^th and I, but the rest of the Mount Vernon Triangle area as well. “We’re going to take this lot and then move up 5^th Street and take out those vacant properties,” he said. “[Donohoe is going to] redevelop that entire street and build on the investment that the city has already made in CityVista.”

The District’s selection of Donahue comes at the end of a 6 month bidding process that saw JBG, Buccini/Pollin, Potomac Investment Properties, and the winning Donohoe-managed joint proposal that included Holland Development, Spectrum Management, and Harris Development, all vying for a contract to build on the coveted Ward 6 parcel. With regards to how Donohoe’s joint proposal edged out the competition, Deputy Mayor Neil Albert said:

I took a look at their work and was very impressed with it. The community wanted entertainment as part of the development and they had a jazz club, which was well received…and then, they were going to pay us $7 million for this piece of land. They definitely had the best proposal. And that’s not just our rating, but community support was overwhelmingly in support of this proposal.

The 5 & I site was transferred into the city’s portfolio in October 2007 in the wake of the National Capital Revitalization Corp.’s (NCRC) dismantlement. DC's Office of the Deputy Mayor for Planning and Economic Development then issued a Request for Proposals (RFP) early this year. The District is negotiating subsidies for the project with Donohoe at present and hopes to generate approximately $85 million in tax revenue from the Arts at 5^th and I project.

The Deceased Get Some Breathing Room in Arlington

The cramped quarters of Arlington National Cemetery's got some much needed relief this week as the Arlington County Board approved a land swap of two 4.3 acre parcels - one belonging to the federal government, the other to the County - that will allow the military burial ground to expand its borders after 2011. In exchange, Arlington County will receive a westerly portion of the Navy Annex that it will use as a site for the long-proposed Black Heritage Museum of Arlington.
The roots of the deal go back 3 years to when Senator John Warner and Representative James Moran - both of Virginia - engineered a clause in the 2005 Federal Defense Authorization Bill that allowed the cemetery's de facto landlord, the US Department of Defense, to commence negotiations with the County.

Apparently, both county and federal officials are seeing this unusual turn of events as a win-win situation. “The cemetery acquires new ground for much-needed expansion while the County gains a well-situated, historically significant focal point for community, its past and its legacy,” said Board Chairman J. Walter Tejada, via a press release issued Tuesday.

With the World War II generation dropping away faster than ever, officials at Arlington National Cemetery have been looking for ways to counter the calamitous consequences of overcrowding the 612-acre site. Last year, they initiated the Millennium Project – a $35 million expansion of the cemetery’s northwest edge. So far, Millennium has acquired 10 acres from the neighboring Army complex at Fort Meyer and recovered 4 acres of former maintenance space within its own borders. Millennium still aims to utilize roughly 40 more acres of “unutilized” space within Arlington National Cemetery proper.

Meanwhile, the other beneficiary of the deal, the Black Heritage Museum of Arlington (which currently bills itself as “a museum without walls” due to its lack of permanent quarters) will have to make do with temporary exhibits throughout the County for the foreseeable future. As Arlington County has yet to commit to a timeline beyond the 2011 exchange date, all details pertaining to its new proposed home at the Navy Annex are tentative at best. However, one resource at the disposal of museum management is the Columbia Pike Revitalization Organization, who recently pushed (and succeeded) in getting the nearby Arlington Mill Community Center cleared for extensive, mixed-use redevelopment.

DC Mud Throws Up Hands, Joins Twitter

In our never-ending pursuit of the latest DC real estate buzz, we've joined up with tech site du jour, Twitter. Follow our updates or throw us a bone through our brand spankin' new user name, DC_Mud.

And, no, we won't be commenting on the quality of our lunch from Whole Foods or the injustice of our latest parking ticket. Just mud, folks. Just mud.

Marymount University Digs Itself a New Hole

With its’ 60th anniversary just around the corner, Arlington’s Marymount University looks to be buying itself a $25 million present a few years early.

Next month will see Dewberry Development break ground on two "contemporary neo-classical buildings" that will take the place of a Marymount parking lot bounded by Old Dominion Drive, Yorktown Boulevard and 26th Street North. Plans for the Davis Carter Scott-designed sibling structures, a dormitory and academic building respectively, were initially approved by Arlington County Board of Supervisors in July 2007.

Rose Bente' Lee Ostapenko Hall (good luck to the co-eds stammering over that one after a few jell-o shots), the 6-story, 75,000 square foot dormitory going up on the site, was named for – you guessed it -Rose Bente' Lee Ostapenko, the University’s current Secretary to the Board of Trustees and founder of the Rose Bente' Lee Endowed Scholarship Fund. Ms. Ostapenko also lent funds (and, surprise, her name) to Marymount’s student center in 1999.

That 239-bed facility will be erected concurrently with Caruthers Hall, a 4-story, 52,000 square foot academic building. The new building will house classrooms, lecture halls, faculty offices, and lab space for health science, chemistry, physics and biology. The facility is being named in honor of Preston C. Caruthers, chairman of Arlington real estate firm, Carfam II Associates LP, and longtime Marymount supporter.

The 2 new structures will both sit atop an underground, 4-story, 145,000 square foot parking garage that will contain 370 new spaces. A new plaza will straddle the gap between the academic building and dormitory, while an overhead pedestrian footpath will be erected across Yorktown Road and connect the facilities with Marymount proper.

“This initiative responds directly to Marymount’s most critical needs,” said university president Dr. James E. Bundschuh. “The new facilities will help us meet the increasing demand for campus housing, significantly enhance instruction in key academic programs, and address the parking challenges that we have faced for several years.”

The 4 Arlington communities bordering the Marymount campus - Old Dominion, Donaldson Run, Yorktown and Rock Spring – have already lent their approval to the project. Davis Construction and Harkins Builders Inc. will be going to ground on the site starting next month. Further BIDs are due by September 25th. The project is slated for completion in time for the start of the 2010 academic year.

Arlington Virginia real estate development news

A Low-Rise Victory for Parkside

Northeast's Parkside neighborhood will soon be getting a little greyer with the construction of the Victory Square senior housing development. Located at 600 Barnes Street NE, the project is being developed as a joint venture between Bethesda's Victory Housing Inc. and the Bank of America Community Development Corporation (BACDC) - an altruistic wing of the commercial bank which contributed over $1 million in loans and investments towards low and moderate-income real estate projects within the District in 2007 alone.

Measuring in at 97,100 square feet, the 4-story Victory Square project will house 98 apartments suited to the needs of seniors, plus an exterior courtyard terrace, coffee bar and lounge, exercise facilities, library and computer center and an in-house salon - all based on designs by local architecture firm Grimm + Parker. Victory Square will mark the developer’s fifth so-named senior housing facility in the region, after Palmer Park’s Victory House, Potomac’s Victory Terrace, Columbia Heights’ Victory Heights and Takoma Park’s Victory Tower.

Victory Square marks the BACDC's very first project in the area, although more are in the pipeline. “We have been working on the master plan development of the area," said Maurice Perry, Development Manager of the BACDC. "This project would be the first phase of the overall development.” In cooperation with Parkside LLC, the proposed plans call for future redevelopment of existing townhomes and apartment complexes in the Northeast neighborhood.

Subcontractor bids are due to the project’s general contractor, Hamel Builders, by September 26^th. Construction is slated to begin in March and be completed 13 months thereafter.

2300 Penn: Demo Begins

Mayor Fenty brought a little showmanship to the usual groundbreaking ceremony as he announced the District's plans to revitalize the 2300 block of Pennsylvania Avenue SE, and then, in a gesture that may inspire more city youths to be Mayor, began demolition of one of the buildings himself (pictured).

"While all groundbreakings are significant, a groundbreaking here on the 2300 block of Pennsylvania Avenue just shows that all of this great economic activity is bringing prosperity and progress...east of the river," said Fenty at the demolition site. "I think for that we should all be excited."

The Computecture Incorporated-designed facility at 2323 Pennsylvania Avenue will consist entirely of affordable housing with 247 units, 115 units of which will be "workforce" housing for families earning no more than 60% of the area median income. In addition, it will also feature a Harris Teeter grocery store and 8,000 square feet of space that the city hopes will go to "high-end" retailers. “If Pennsylvania Avenue is going to be the major corridor leading into east of the river neighborhoods that we all expect it to be," the Mayor said in closing, "we’ve…got to get rid of the blighted properties that are on it."

As the first major development in greater Anacostia since the Penn Branch Shopping Center was built a decade ago, the project at 2323 Pennsylvania Avenue is exciting indeed. The lot where the project is to be erected was formerly home to an unsightly strip of used car lots and a tattoo parlor. An interesting note on the block’s historic status: one the homes slated for demolition is where John Wilkes Booth was treated for his injuries following the assassination of President Lincoln.

The mayor detailed the $7 million in construction loans and $1.2 million in affordable housing tax credits offered to the developer for the project and then thanked the DC City Council for its determination in getting the project off the ground over the past two years.

Also in attendance at the event were DC Councilmember and Chair of the District’s Committee for Economic Development, Kwame Brown, Anthony Muhammad of the Advisory Neighborhood Commission 8A and Tim Chapman of Chapman Development, the primary developer behind the project – in addition to a packed house of community leaders and activists.

Brown went on to express his pleasure with the development from the perspective of someone who lives only blocks away. “I think there is no greater sign that what we’re doing together from an executive and legislative standpoint is working,” he said. “I think in the next five years we’re going to look back and say ‘Wow, look what used to be here and what is here now.’”

Brown trumpeted the housing development as a beacon of hope for residents of Wards 7 & 8 and as a surefire measure to draw to new retailers and residents to a part of the city best described as undesirable, if not dangerous. The afternoon’s remarks came to a close as Mayor Fenty got behind the wheel of a heavy duty land mover to demolish a one-story brick structure, giving the project a memorable kick-off.

This is not Chapman Development’s first foray into development of the District’s less affluent areas. The firm was previously responsible for the Lotus Square Apartments on Kenilworth Avenue, NE. According to the Bank of America representative responsible for funding the Penn Avenue project, Lotus Square maintains the appearance of market rate housing, despite its affordable, and enjoys high levels of tenant satisfaction - one the driving forces behind the selection of Chapman as developer. The work site is currently being cleared by 25 members of the Earth Conservation Corps (ECC) with construction expected to begin once demolition is complete.

One, Two, Three or Four in Southeast?

When DC Mud last reported on DRI's proposed mixed-use development at 88 K Street SE, the project had more working titles than a Star Wars sequel ("99 I Street" or "Square 696") and there was much confusion as to what shape the project would take when fully realized. The identity crisis now has some closure, now that Tammal Demolition completed its razing of a taxicab garage on the site in order to make way the project - now indisputably titled "The Plaza on K."

The HOK-designed project will begin Phase I construction in the coming months with a "flexible building plan," that, according to DRI's marketing department, could accommodate up to 4 towers of retail and office space taking up the entire city block at First and K Streets SE. (This despite the fact that the Capitol Riverfront's own newsletter reported the Plaza on K as tri-tower development in conjunction with the raze.)

The project’s first phase will include construction of the first tower and will add 290,000 square feet of office space and 14,000 square feet of ground-level retail space to Southeast’s shot at a real estate "do-over." Current plans call for the three towers to total 825,000 square feet in all, sport rooftop terraces and gold LEED certifications, and surround a 10,000 square foot public plaza.

The Plaza on K is just one of multiple District revitalization projects underway on what were once some the District’s most neglected pieces of property. Once completed, the Plaza will neighbor JPI’s Capitol Yards development at 100 I Street and the Cohen Companies' Velocity condo complex at 1050 First Street. Phase I's single tower is scheduled for completion in mid-2010, although a BID for the project has yet to issued. A firm timeline for further towers on the site has yet to be established.

Safeway Opening Brings Commerce to Mt. Vernon Triangle

Mayor Adrian Fenty turned up with a pair of comically oversized scissors today to cut the ribbon on the brand new Safeway in Mt. Vernon Triangle, the company's first downtown location and 17th District store. The grand opening marked the completion of one of the cornerstones of the city's $200 million CityVista project that will see 685 units of residential housing, 138 affordable units, 130,000 square feet of retail space, 800 parking spaces and 150 new jobs created in Mount Vernon Triangle. The new Safeway, which also sports (yet another) Starbucks, despite that company's closure of 500 underperforming stores, marks the first major business to open at the K Street facility that also includes the recently opened CityVista condo complex. “This is really about just more than Safeway,” said the Mayor before slicing the ceremonial sash. “It’s really about revitalizing Washington, DC, our nation’s capital.” Fenty was optimistic that progress was inevitable for the neighborhood. “If you know this area, this was an area that for a long time, not a lot was happening…and what we’ve seen over the years is an area come to life.” He went on to cite the initiative that led to the Verizon Center, Gallery Place and the transformation of Chinatown as steps that now have ramifications for the neighboring Mount Vernon Triangle. “We are continuing on what I think is the real realization that the District of Columbia is turning a corner and that there are great things happening in this city.” Mark Rivers, who spoke on the behalf of the developer behind the project, Lowe Enterprises, shared credit for those “great things” with several other parties who advanced the CityVista cause: the CIM Group, Bundy Development Corporation, Neighborhood Development Company and especially the Office of the Deputy Mayor for Planning and Economic Development. “This is about a $240 million development,” he said, “but $48 million went to small and disadvantaged local business enterprises here in the city.” He then heralded the other businesses that will soon join Safeway in the mixed-use K Street complex. “5th Street Hardware, Results Gym, Chevy Chase Bank and Busboys & Poets will be opening very soon and we’re very excited about that. I know the community is as well.”Following the remarks, the Safeway brass led Fenty (and a pack of photographers) on a tour of the new store’s amenities. Fenty played coy while perusing the facility’s full-service “nut bar” (“One of only 4 on the East Coast!") and ordering a “Fenty-sized” apple cider at the in-house Starbucks. Safeway’s first DC location opened in 1928, but the completion of the corporation’s 56,000 square foot CityVista site does not mark the end of their plans for the District. They have already revealed plans to renovate 8 of their DC locations over the next three years to the tune of $45 million. Those stores targeted for remodeling include Tenleytown and Petworth, both of which could see the addition of 200+ plus housing units on (or on top of) their lots. A developer has yet to be sought for the projects.

Washington DC retail and commercial real estate news

DC's Most Expensive Vacancy Up for Lease

The District's Office of Property Management (OPM) has issued a Request for Expressions of Interest (RFEI) for the former printing plant at 225 Virginia Avenue SE - a property that has lain dormant since it was first acquired by the city. Originally intended to a 1^st District Police substation and evidence warehouse, the Metropolitan Police Department (MPD) secured a 20-year lease for the 421,000 square foot site from Washington Telecom Associates LLC in 2006. After two years of paying $6.5 million in annual rent (nearly $550,000 a month, folks), they've finally given up the ghost on a project that has succeeded in doing, well, bupkis.

Granted, after the District balked at the cost of re-outfitting 225 Virginia as an operational station, they were able to make space for the MPD at two properties they owned outright. But, curiously enough, they seemingly thought of nothing to do with the hulking building they had leased until recently. According to the developer brokering the deal for the District, M.L. Clark Real Estate, the five-story building comprises “one of the largest blocks of contiguous spaces immediately available within the District of Columbia." What’s more, it’s one of the only original buildings near the new Nationals Ballpark that has yet to be redeveloped. The neighboring lots that once surrounded the massive installation are now Washington Nationals parking lots or Capitol Riverfront construction sites (soon to be mixed use residential and retail developments) – all of which makes this one hot piece of property just off the I-295 exit ramp.

The building and accompanying parking lot are on the block for $80 to $85 million, depending on the options exercised under the terms of the sublease. Due to confidentiality agreements in place, representatives of M.L. Clarke Real Estate were unable to comment on the number of proposals received so far, per the confidentiality agreement, but they did, however, hold a pre-submission site visit for interested parties this morning, in association with the OPM. The project team assembled by M.L. Clark also includes architect Yves Springuel and Tischman Construction. The deadline for proposals for the site has been set for October 3rd.

Delayed Healing for Walter Reed

Military medicine in the DC metro area is to undergo a severe reorganization in the next three years as the District’s Walter Reed Army Medical Center (WRAMC) closes its’ doors to merge with Bethesda’s National Naval Medical Center (NNMC), delaying redevelopment of the site. But the project, which is to see the sprawling Bethesda site re-titled the Walter Reed National Military Medical Center (WRNMMC), hit a speed bump this week as the proposed start date for the $641.1 million undertaking was called into question before Congress.

The slow down came early in the week as Rep. John Murtha of Pennsylvania (D) inserted language into Congress’ defense-spending bill that would prevent the current Walter Reed facility from closing down at the intended date in 2011. As reported by The Hill, it is Murtha’s intention to keep the WRAMC open as long as possible, in order to ensure that the hospital’s “world–class medical facilities” for military personnel will not be compromised. (Although that view seems to conflict with WRAMC’s image following The Washington’s Post’s 2007 series of scathing exposes about patient conditions at the compound.) Murtha’s efforts could delay the project an additional 18 months and add an estimated $150 million to the project’s price tag.

Currently, the capabilities of both the WRAMC and the NNMC are set for a dramatic expansion once construction is completed. The overhaul needed to transform the 243-acre Bethesda site into the WRNMMC breaks down like so:

• A 261,000 square foot renovation of the current NNMC facilities

• The construction of a new 6-story, 533,000 square foot, 345-bed medical center

• A 157,000 square foot, 4-story addition to an existing building that adjoins the Building One hospital

• The construction of a new 80,000 square foot, 2-story facility to house the National Intrepid Center of Excellence

• The construction of new pathways, utility tunnels, barracks, a gym, parking lots and a garage

• The relocation of key WRAMC service centers, such as those for amputee therapy and lung and breast cancer

The integration the nation’s two most prominent military hospital and research facilities was mandated by the 2005 Base Realignment and Closure Act, which required the relocation of all WRAMC services by September 15, 2011. An Office of Integration was established soon afterwards by the Navy in order to facilitate the transition in a timely and efficient manner to the Bethesda location 6 miles away – an effort that is already well beyond the initial planning phase. Jurisdiction over funding for the project fell to the Naval Facilities Engineering Command, which, as of March 2008, had already granted a joint contract to firms Clark Construction and Balfour Beatty Construction. A groundbreaking ceremony held this past July 3^rd was overseen by President George W. Bush.

Washington DC real estate development news

China Brings Its Baggage to Porter Street

Cleveland Park residents may have noticed the new home development breaking ground on Porter Street, where construction is underway on Porter Street Residences, a 27-unit apartment building (pictured), to be completed in 2010, the only new residential project in the vicinity. Less observant residents might have missed, however, the uniformly Chinese work crew. The outsourcing is not a cost-cutting measure, however. Beginning in 2010, 2708 Porter Street NW will be home to the diplomatic staff residences of the Education Office of the People's Republic of China, a companion project to the recently completed $250 million, 345,500 square foot Chinese Embassy. The nature of the construction is only the first in a series of eyebrow-raising questions posed by goings-on at the site.

Designs for the 27-unit apartment building (12 two-bedroom units, 10 one-bedroom units and 5 studios) and 30-car underground parking garage were prepared by New York’s Ehrenkrantz Eckstut & Kuhn, the firm that is currently designing the Southwest Waterfront, with construction overseen by China Construction America Inc., the American face of the China State Construction Engineering Corporation (CSCEC), the largest “conglomerate building enterprise” in the People’s Republic of China. Hence the dozens of Chinese workers in the Washington area to staff the project. Why bring workers so far for a paltry 27 units? One word: security. International politics being what they are, the seldom-neighborly Chinese government surmised that "American" workers (ahem) might pose a security risk, planting recording devices (or worse) for the benefit of those in the CIA, NSA or likewise acronymic agency. (Lest we forget the secret listening post constructed under the Soviet Embassy in 1970s that remained undiscovered until 2001, or the brand new Moscow embassy Uncle Sam abandoned in the 1980's after finding it infested with (electronic) bugs.)

This appears to be standard operating procedure for China Construction. The company has previously transported emigrant work crews to America for other projects throughout New York, California and Florida. The process also echoes their practices for construction of the Embassy itself, another instance in which they have sought to bar other non-Han crews’ from having any involvement on a work site – a move which prompted severe criticism from stateside union organizations such as Unite Here! and the AFL-CIO.

While the apartments themselves have drawn little flak from the surrounding community, the conditions afforded the Chinese construction crew have been the subject of scrutiny. Reports of the workers' long hours and confinement within a defunct, barbed-wire enclosed Days Inn on New York Avenue NE have been circulating since 2005, when the Embassy first began construction. According to one Chinese speaker who posted a report of an encounter with a Porter Street worker at Prince of Petworth, the workers are fearful of being seen talking to local residents and won’t be permitted to tour the city until their work is completed.

A press release issued by Holland & Knight, the law firm responsible for securing the building’s requisite zoning and land use permits, describes the Porter Street Residences as a “spacious living environment for the diplomats and staff and their families, as well the visiting delegations, scholars and officials.” Seeing as the record of the People's Republic is far from spotless on human and labor rights, it’s no surprise that the imported workers aren’t being afforded the same style of "living environment" as the one they are building. What is surprising, however, is the lack of mainstream media scrutiny regarding the subject. To date, no local television, newspaper or radio outlets have filed a single report on the development. Given the constant stream of activists calling for action outside of the Chinese Embassy, perhaps Porter Street will soon be seeing a few protests to call its own.