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

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

Can you give us an overview of the company? 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Washington DC commercial real estate news

More Money for Macedonia

The Arlington County Board has approved up to $2.855 million in low-interest loans for the Nauck Development Partners' (NDP) affordable housing redevelopment of the Macedonia Baptist Church

in Arlington. Per the terms of the approval, all of the building's 36 units are to remain "guaranteed affordable" for a minimum of 75 years.

NDP, which is a partnership between the Church, the Bonder and Amanda Johnson Community Development Corporation and AHC Inc., previously sought another $2.86 million low-interest loan and $40,000 County grant from the Board in January - both of which were summarily approved. NDP has secured $14 million in financing for the project, nearly $6 million of which is drawn from County funds. Part of the Macedonia's funding package will come in the form of 4% tax credits and tax-exempt bond financing via the Virginia Housing Development Authority, which the development team had been vigorously pursuing since last summer.

Located on three neighboring parcels at 2219, 2229 and 2237 Shirlington Road in the Virginia suburb of Nauck, the Bonstra Haresign-designed Macedonia will host the aforementioned 36-unit affordable in addition to two sections of commercial office space and a “small business incubator.” AHC Inc.’s Project Manager, Curtis Adams, told DCmud last December that the development team plans to begin construction in the late spring of 2009.

Canal Park Gets New Architect, Timeline

The Capitol Riverfront BID yesterday announced that OLIN, a Philadelphia-based landscape architectural firm, has been selected to supply designs for the long in-the-works Canal Park – the pedestrian-friendly makeover of what is currently a school bus storage lot spanning three blocks between I and M Streets, SE and one of the proposed touchstones of area's redevelopment.

Unfortunately for green space aficionados, this means the project’s managers at the Canal Park Development Association (CPDA) will be throwing out the park designs previously approved by the National Capital Planning Commission (NCPC) in 2006 and starting back at square one - a process that will involve re-submitting plans anew to that very same body.

"We should be done with the schematic design in about 12 weeks. Then we’ll start interacting with Commission of Fine Arts and NCPC at that point,” said Chris VanArsdale, Director of the CPDA. “We won’t be done with the [final] design for 10 months, 12 months. So when the design is sufficiently complete, we’ll bid it out.”

According the Riverfront BID and VanArsdale, the site will be begin to be cleared in early June with construction planned in early 2010. Newly announced amenities planned for the Southeast redevelopment initiative include “a new pavilion, a cafe and a possible summertime fountain and wintertime ice skating rink.” The CPDA is currently in negotiations with the BID about possible operators for those park components. Funds for the project are being drawn from $13 million in City Council appropriations, as well as private donations.

Though the strip of land set to host the park was initially to be transferred from the District government to the now dissolved Anacostia Waterfront Corporation, the CPDA has reached an agreement with government authorities that will allow them to oversee the park well beyond its projected 2011 completion. “[The land is] still technically under the control of the DC government, but we have a license agreement with the District to develop and maintain the park,” said VanArsdale.

One of the key features of the park that will remain intact, despite the change of design teams, is its goal of accruing “zero net energy.” According to the BID, OLIN will be exploring green features like stormwater management systems and “solar panels on lightpoles and possibly neighboring buildings” to make the project as low impact as possible. Michael Stevens, Executive Director of the Capitol Riverfront BID told DCmud last year that "Canal Park will be a model of environmental sustainability, it will catch storm water runoff from surrounding blocks, capture, filter, recycle, and reuse the water on sight. We are hoping to capture it on the rooftops of other buildings as well. A lot of that was planned before ballpark."

New Columbia Heights Destination Open by Fall

With demolition of the old Bi-Rite Super Market location now complete, 3DG Development is progressing steadily with construction of Columbia Height's soon-to-be newest hotspot, Meridian Pint - a Belgian beer-centric restaurant, bar and lounge from John Andrade, the current owner of Asylum on 18^th Street, NW. John Goldman, CEO of 3DG, tells DCmud that, "Demolition has been occurring in phases since we started in September, but we're now done with demolition and are going upwards with steel and framing at this point… The core and shell [are] to be complete by June and doors [will be] open by fall." Located at 3400 11th Street, NW, the site will also will also host second-story office space, to be occupied jointly by 3DG and Somilar International, a DC-based sustainable tourism consultant. Since breaking ground on the project in April of last year, the development team – which also includes 3DG as an architect – has met with the surrounding community as recently as March 11th, when they made a presentation to the local ANC 1A. In keeping with their all-in-one modus operandi, 3DG Construction, LLC is also serving as general contractor on the project.

Washington DC retail and restaurant news

Future Uncertain for Silver Spring Transit Mixed-Use

While work bristles along on the much anticipated, $70 million Paul Sarbanes Silver Spring Transit Center in downtown Silver Spring, progress on the proposed private development at the site is doing anything but. Despite being awarded rights to pursue three towers worth of mixed-use projects – including a 469-unit apartment building, a 196-room hotel and 25,000 square feet of ground floor retail at Colesville Road and Wayne Avenue - following completion of the Transit Center, developer Foulger-Pratt is tight lipped on exactly when the once project will leap off the drawing boards and into the public realm.

“There are three towers that will be built around the Transit Center, someday…but we’re not exactly sure what the towers are going to be. At one point, it was a hotel, an office building and apartments, then hotel, office building, condos. But at this point, we know one of them will be a hotel and that’s all I can say because we don’t know yet,” said Steve Sowash, Director of Preconstruction and Estimation for Foulger Pratt. “Right now, we’re not even projecting a start date on it.”

Though Foulger-Pratt, also serving as general contractor on the Transit Center proper, were once thought to be planning to dovetail their start on the private portion of development with the projected late 2009 completion of the center, that plan appears to have fallen by the wayside. In a refrain all too familiar to area developers these days, Foulger-Pratt is laying the delay at the feet of Old Man Economy.

“[An early 2010 start] is too optimistic…[Our schedule] is contingent on the market in general.“ said Sowash. “Nothing’s even been submitted [to the Planning Board]. We responded to an RFP several years ago for three towers around the Transit Center. It was something that the County had awarded us the right to do, but, then again, it’s all market driven.”

Architects Zimmer Gunsul and Fransca remain attached to the project and Foulger will once again serve as general contractor if and when the developer gets shovels in the ground. In the meantime, the Transit Center is still on schedule to wrap up construction later this year. Montgomery County’s Division of Building Design and Construction is expected to provide an update on project during the first week of April.

Adams Morgan Renovation Yields New Apartments

Everything old is new again, especially in Adams Morgan. In a timely full-circle, yet another of Adams Morgan's numerous Depression-era apartment buildings will be getting a full makeover in the coming months...just as we coincidentally circle the drain of our own financial crisis.

Starting next month, Ellis Denning Construction and Development will begin a $2 million renovation of Urban Investment Partners' (UIP) six-story rental apartment building at 1921 Kalorama Road, NW. Kunal Shah, Purchasing Manager/Estimator at Ellis Denning tells DCmud that the each of the building's 59 units will be receiving a top-to-bottom facelift with new kitchens, bathrooms, flooring, finishes and paint jobs (now lead-free!).

Ellis will be overseeing the selective demolition of certain internal portions of the aging building, from which they're planning to carve three new apartments out of the current 60,000-square foot plan.

In addition to Ellis, UIP has also taken on Bonstra Haresign Architects to design both the renovations and new construction. Given the structurally sensitive nature of the planned procedures, Shah declined to comment on a timeline for the project, but did note that only thirteen of the building's 60+ residents will be permitted to remain in the building once work begins.

The very same team of Ellis and Bonstra is currently at work on another nearby apartment complex at 2525 Ontario Road, NW, while Ellis has also paired with Hickock Cole Architects for a similar project at The Ritz at 1631 Euclid Street, NW. Both of those developments are owned by affordable housing provider Jubilee Housing, Inc.

Secy. Napolitano Offers Thoughts on St. Elizabeths

Secretary of Homeland Security and former Arizona Governor, Janet Napolitano, toured her agency’s new home at the St. Elizabeths West Campus in Southeast Washington D.C. this week with CNN’s Wolf Blitzer and, in doing so, revealed some previously unheard details regarding the relocation. In her own Special Olympics-like gaffe, the Secretary referred to St. Elizabeths as being in “a very run-down part of the District of Columbia.” Not a Bush league malapropism, but take a cue from Mayor Fenty…it’s “ripe for economic redevelopment.” But Napolitano did reveal news that bodes well for Ward 8. According to the Secretary, the Department of Homeland Security (DHS) is aiming to do the same thing for the surrounding neighborhood that the CIA did for Langley and the Pentagon did for Northern Virginia. Namely, they'll be focusing attention on areas once thought undesirable or outside of the metro area development bubble. In a response to a question from Blitzer, Napolitano said: “I think when the Pentagon was created there were many of the same arguments were made about being a bad neighbor, not helping the local economy and the like and those have not been borne out.” And who doesn't want to live next to the Pentagon now.In the course of the interview, Napolitano also stated that, in addition to the $346 million set aside for the DHS relocation Fiscal Year 2009 congressional budget, the project will be receiving funds from the Stimulus Package - making it the first DC area development to get a boost via the controversial bill. Said Napolitano:

This project [will receive] $650 million and it will equate to 33,000 jobs in this area, $1.2 billion immediate stimulus to the local economy and if you look at this area of the District you’d understand that this will be very beneficial to the overall quality of life in this area of this District.

Unfortunately, CNN has yet to post video of the interview, which also included a tour of St. Elizabeths landmarks, including future staff offices, including Napolitano’s, and the former cell of poet, and one-time inmate, Ezra Pound. In the meantime, a full transcript is available here.

Washington DC commercial property news

Montgomery Mall Expansion Set for Summer

The expansion of Bethesda’s Montgomery Mall, previously approved by the Montgomery County Planning Board in 2007, will now proceed as early as July. Mall owners the Westfield Group have targeted 200,000 square feet of space in the 40-year-old mall, including the present movie theater on site, for selective demolition, along with the neighboring Westlake Crossing shopping center. In its stead, Westfield and the project’s architects, Gensler, have envisioned a massive 720,000 square foot build out from the current mall complex at 7101 Democracy Boulevard.

At present, the expansion is set to include a new 70,000 square foot multiplex movie theater, an overhauled 20,000 square foot food court, a “fashion wing” devoted to high-end apparel and two new five-story parking garages.

According to the Australia-based Westfield (who also happens to be one of the largest retail property holders on the planet), the “$19 million redevelopment will result in May Company [Macy’s] expanding and remodeling its existing store through the acquisition of the top level of the JC Penny department store. The lower level of the JC Penny store will be utilized to create 5,900 square meters of mall space, including an Old Navy store.” Once completed, the mall is expected to grow to roughly 1.8 million square feet.

The mall’s epically frustrating parking lots, which lure some 11 million visitors to the Montgomery County fortress-like shopping destination each year, will also go under the knife for a transit-friendly makeover. Along with a relocated Sears Auto Center, a new “six-bay bus transit center” will be constructed along the mall’s rear, giving the heavily traversed junction of Democracy Boulevard and Old Georgetown Road a new commuter destination (and for local high schools students to smoke between trips to Sbarro.)

Construction is currently planned to occur in three phases, with the transit center and fashion wing slated to go up first. Whiting Turner will be serving as general contractor.

GMU Courts Commerce in Fairfax

One of the Virginia commonwealth’s largest public educational institutions, George Mason University, will be getting in on a little private commerce this coming May, when it officially breaks ground on its new $30 million hotel and conference center: the George Mason Inn.

Developed in conjunction with University Hotel Partners, the Inn is to be the newest addition to GMU’s flagship Fairfax campus. Once completed, the development will stand between Braddock Road and University Drive on six-acre parcel close to the university’s Patriots Village dormitory complex. Plans prepared by Gensler Architects call for a seven-story, 150-room hotel to be built alongside a 20,000 square foot flex-space conference center that will include a 175-225 seat restaurant, in addition to meeting, banquet, business and lounge areas.

GMU has already taken hotel operators Aramark Harrison Lodging, which operates fifteen similar “collegiate conference center/hotels” throughout the country, to manage the day-to-day functions of the center. The University has stated its intent to use the facility as a “campus living room,” since according to their projections, “university use accounts for 55% of meeting [and] guest room space.” Which isn’t to say that GMU will be hurting to fill the rest of their vacancies; as Virginia’s second largest university, GMU draws upwards of three million visitors per year to the Fairfax campus alone.

It seems logical enough then that provisions for a conference center and hotel at the university have been bandied about since 2002, when they were first included in a County Master Plan governing the site. With seven years of lead time, GMU has had plenty of time to secure financing for the project; its $30 million budget is to be drawn from state-backed bonds and, once open for business in the fall/winter of 2010, the Inn will be owned entirely by the University. Balfour Beatty will oversee construction.

Alexandria "Gateway" to Start in '09

Following January approvals from the Alexandria Zoning Commission and City Council, Bethesda's Green City Development (alternatively known as Tall Cedars Development) is moving forward with their plans to add another landmark to Alexandria, at least in name. The so-named Landmark Gateway project is the Northern Virginian city's bid to redevelop an area primarily known for strip malls and warehouses and, for many local officials and community members, the work can't start soon enough.

"The Landmark Gateway proposal has been reviewed in numerous community meetings over the past two years as well as by the Landmark-Van Dorn Corridor Small Area Plan Advisory Group," said Department of Planning and Zoning Director, Faroll Hamer. "This project will be an important catalyst for an area that is struggling to turn itself into a vibrant revitalized community, and with the current economic downturn and difficulty in securing loans, it may be the only chance in quite some time.”

Located on a six-acre parcel at South Van Dorn and Pickett Streets, the Gateway will replace the industrial structures on site with a three building “Art Moderne”- style development that will include 431 rental apartments (with an unspecified mix of affordable and market-rate units), 35,000 square feet of retail space and a 544 space underground parking garage. The designers behind the 550,000 square foot project, Architects Collaborative Inc., are currently working with landscape architects, The FAUX Group, to create “a series of urban…lively streetscapes, public plazas [and] promenades linking storefronts to the retail parking areas, public art elements as well as private courtyards…for area residents.”

Green City is currently projecting a December 2009 start for the first two, five-story buildings in the $100 million project. Both are aiming for a LEED silver certification. 

Greater Washington DC real estate news

DC's Palisades Demolition Clears Way for Single Family Homes

Encore Development and engineers Dewberry and Davis are currently on site at 4800 U Street, NW, where they are parlaying the former site of a single-family Palisades home into eight development lots. Encore purchased the property, which stands only a block from MacArthur Boulevard, in 2007 and subsequently razed the home at the site soon thereafter.

“We actually bought a 3.2 acre parcel there and sold half of it to the St. Patrick’s School. We retained the other half for ourselves,” said Encore principal Steve Kay. According to him, though Encore has already received numerous inquiries from other development teams looking to acquire the property, the roughly 9,000 square foot lots will most likely be sold ala carte to would-be owners once work ends sometime in “the May to June timeframe.”

As Encore’s interest in the site will feature no new construction, the developer needed little clearance to proceed with their subdivision. “It’s a matter-of-right project and all of the lots have frontage on either 48^th or U Streets…We did meet with ANC, but there was no approval process,” said Kay. “But there will be 8 houses there, as soon I release the lots for sale.”

Tenley-Janney Loses Apartments, Gains Consensus

In a surprise announcement from Mayor Adrian Fenty at Janney Elementary this afternoon, the ongoing battle between the Tenleytown community and the Office of the Deputy Mayor for Planning and Economic Development over the mixed-use redevelopment of the Tenley-Friendship Library seems to have drawn to a close. The District announced today that it has split with developer LCOR Inc., which had previously been awarded rights to construct the library at the site, along with 174 rental apartments, by the Fenty administration this past July.

The District’s relationship with LCOR, however, went suspiciously unmentioned by Fenty or his staff during the duration of the press conference - an especially conspicuous omission, given that Deputy Mayor Neil Albert had previously reaffirmed his office's commitment to moving forward with the LCOR-led redevelopment as recently as January. Off-the-record sources from inside the District government confirmed that the change of direction at the Janney site had little to do the contentious war of words between the Tenleytown community’s reps on the DC City Council and ODMPED, but that instead, LCOR has been forced to the sidelines due the company’s inability to secure financing in the troubled credit market. For the District’s part, they’re leaving the door to mixed-use development open for the near future.

“There is the possibility that after the library is built, sometime in the future, there may be additional mixed-use on that site,” said Fenty, to a mixed reaction of both applause and boos – an illustration of just how divisive the residential component of the school/library redevelopment had become, even among Janney staff and parents.

With LCOR out of the picture (for now) and no residential units stacked atop of it, the library over the metro station will top out at a simple two stories and measure in at 22,000 square feet, based on designs by the Freelon Group. Forrester Construction has signed on as general contractor and the building will seek a LEED silver certification.

Whether today's deal is a bow to market forces or just public relations peacemaking (or both), ODMPED didn’t end the goodwill there; the schedule for construction of the new library and concurrent renovations to Janney Elementary, it was announced, has been significantly accelerated. Fenty pledged that the new library will be open by the end of 2010, while renovations to Janney, once scheduled to begin in 2014, “could begin as soon as December.” Both Fenty and Allen Y. Lew, Executive Director of Office of Public Education Facilities Modernization, agreed that an architect for the renovation will be selected by June; other details, including whether the school will remain open during construction, had yet to be confirmed. According to Lew, the renovation could take as little as thirteen months.

Coast Guard First to Deploy at St. Elizabeths

With favorable environmental impact and National Capital Planning Commission reports in the bag, the General Services Administration (GSA) will issue a Request for Qualifications on March 23rd targeted at a new 1,100,000 square foot US Coast Guard headquarters at the St. Elizabeths Hospital West Campus.

Bidders on the design-build contract will be expected to meet “high performance green building design criteria” and to include provisions for a 990-space parking garage. Also of note, though the Coast Guard facility has been bundled together with the federally-owned West Campus, part of it will actually be erected on a northwestern piece of the DC-owned East Campus – a compromise resulting from the 1987 land transfer that the ceded the East Campus to District control. At present, the Office of Planning is proceeding independently with their plans for 2 million square feet of private sector, mixed-use development south of the Coast Guard site.

Funds for the new HQ will be drawn from the $346 million allotted to the GSA specifically for the St. Elizabeths redevelopment by Congress in the Fiscal Year 2009 federal budget. GSA spokesman Mike McGill told DCmud last month that “In terms of putting people in place on campus, the Coast Guard is going to be the first tenant. We anticipate that to be far enough along for them to begin moving in 2013.” GSA is currently projecting a April 2010 start for the Coast Guard project.

JBG Lays Out Plans for U Street Hotel

JBG has made public more of the details planned for the hotel it intends to build at U and 13th Street, a 10-story, LEED-certified hotel with stacked parking, art gallery, green roof and fitness club.

Matt Valentini of the JBG Companies and Michael C. Swartz of David M. Schwarz Architects met with the Cardozo Shaw Neighborhood Association (CSNA) last night to present plans for their proposed 250-room hotel at the current site of the Rite Aid at 13th and U Streets, NW.

The team began their presentation describing the current Rite Aid-dominated single-story strip mall on site as a "suburban building type" that under-utilizes its prominent location. "The Metro being at the corner of 13th and U really makes this a focal point not only for the neighborhood by the historic district as a whole,” said Swartz. The architect’s stated goal in designing the hotel is to make something more “iconic and memorable,” who went on to identify numerous area precedents for the bayed brick design, including the Dunbar and Whitelaw Hotels.

Their current plans call for the building to top out a 10-stories, though they are alternatively exploring the possibility of limiting it to nine. A final determination on the building's height will be made once the development begins the approval process with local governing bodies such as the ANC 1B, the Historic Preservation Review Board and the Office of Planning.

At its’ current 90 foot height, the proposed hotel would require multiple variances in order to exceed the by-right height limit of 65 feet. Valentini countered criticisms that the hotel was a “colossus” by outlining the various benefits the project would offer: one hundred and fifty permanent jobs (sold!), a gallery showcasing the work of the local artists, future contributions to local community organizations, a public pool and spas, and guest vouchers to promote Metro use were among the items cited. “All those things are out there to be publicly consumed,” said Valentini.

According to the JBG representative, a project at the permitted 65 feet would not be economically feasible, especially considering that the developer must accommodate Rite Aid, which has leased the site until 2026. The hotel will retain the 25,000 square feet of retail presently available, though most of it will be devoted to the pharmacy. The remaining ground floor space will be allotted to glass-fronted retail and Valentini told the audience that JBG is “considering people on U Street today” as possible tenants.

Amenities planned for the hotel include the aforementioned gallery and pool, as well as a hotel restaurant, rooftop bar, meeting space and green roof – in keeping with the project’s pledged LEED silver certification. Furthermore, the development team stated that they had already amended their design to address a primary community concern: parking along already congested U Street. The current design features an all-valet two-story garage that will utilize mechanical stacking devices to far surpass the amount of spaces required by zoning.

JBG has yet to formally announce a flag for the hotel, but did say that they have reached out to hotelier Denihan Hospitality Group about the U Street project. “They do smaller boutique hotels, but we like their style and one of the things we’ve really talked about is this idea of a hotel club,” said Valentini. “Whereby, when we a build spa, when we have a pool, when we have a fitness center, that’ll be open to the public too.”

Following the meeting, CSNA President Bryan Martin Firvida told DCmud:

While JBG was able to speak to many of the questions and concerns raised during the meeting, there are a still a number that will need to be addressed as the plans move ahead...Even though we're only in the concept and planning stages today, this project has already made an impact on our neighborhood, and will continue to do so, during planning, construction, and most importantly, long after the front doors of the hotel open for business....The end goal of course, is to ensure that once complete, this project makes a positive impact on our already great U Street neighborhood.

Though JBG has yet to formally submit their application to the Office of Planning, the development team projects that the PUD process will begin in “late spring/summer.” At present, construction is tentatively scheduled for 2011, followed by a 2014 completion. In the meantime, the CSNA has opened up a website devoted solely to JBG’s 14th Street Hotel project: http://ustreethotel.csnadc.org/

The Residences Delivering on Georgia Avenue

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

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

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

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

Washington DC real estate development news

Waterfront Station 1 Tops Out in Southwest

Waterfront Station officially topped out today, and while that alone may be cause for celebration, backers must be more pleased that the office building is entirely leased. Once completed, the Southwest Washington, DC development - a joint venture between Forest City Washington, Vornado/Charles E. Smith and Bresler and Reiner, Inc. - will add 2.5 million square feet of office, residential and retail space to the former site of the Waterfront Mall at 4th and M Streets, SW.

District authorities, in particular, have reason to commemorate the project's construction milestone. City agencies, including the Office of the Chief Financial Officer, Office of Planning, District Department of Transportation and Department of Consumer and Regulatory Affairs, have already leased the entire 628,000 square feet of phase one’s Shalom Baranes-designed dual office buildings and are currently scheduled to move in once construction ends in March of 2010. The towers, which abut the Waterfront/SEU Metro station, will also include new space for the present Safeway, CVS and Bank of America locations on site, as well as an additional 85,000 square feet for restaurants and “neighborhood service-related” retail. Both buildings are aiming for a LEED silver certification. Clark Construction is currently serving as general contractor on the project.

Mayor Adrian Fenty, on hand to officiate the proceedings, also took time to wax nostalgic about his history with the project. “I’ve been the mayor for twenty-six months and ten days and I can tell you that this has been a priority of our administration for that entire time," he said. "I was on the City Council before that and I followed, as an interested appropriator, all of the discussions around Waterside Mall."

Meanwhile, Ward 6 Councilman Tommy Wells and Councilmember-at-Large Kwame Brown applauded the project for revitalizing a long-neglected Southwest site and proceeding as planned, despite the current state of the real estate market.

“I believe the financing [for this project] was closed on the day the Dow dropped 700 points [on September 29th, 2008]. This team saw it through,” said Wells. “You may see other cranes that have stopped working, other places that they stopped digging, but these guys are work because of this great development team.”

In between accolades, not much mention was a made of the development’s projected phase two component, which is intended to include nearly 1,000 residential units, along with more retail and office space, to fill Waterfront Station’s eventual 2.5 million square footprint. The current timeline calls for design work on the next phase of development to begin this coming May and Deborah Ratner Salzberg, President of Forest City Washington, Inc., was optimistic that the project will a be success based on its convenient location and the inroads made so far.

“People are going to come up from this Metro, they’re going to head home, they’re going head to school, they’re going to go to work and they’re going to shop. Waterfront Station will be an active retail hub,” said Salzberg.

Washington DC real estate development news

Unwanted Condos Get Affordable in Germantown

Prolific affordable housing providers, AHC Inc. - whose resume includes developments such as The Shelton and Macedonia in Northern Virginia - have just inked their first deal with Montgomery County. Using a total of $5.4 million in loans from County's Housing Initiative and Community Development Block Grant Funds, AHC has purchased 29 new condominiums at Fairfield Residential's Ashmore at Germantown development for the purpose of converting them in to long-term affordable rentals. According to the developer, "After the units are leased, AHC will refinance the property and return a portion of the funding to the County to be recycled into additional affordable housing initiatives."

While certainly not a boon to the development’s marketing strategy, the sale is certainly a relief for Fairfield; this past November, when faced with a declining market and a glut of unsold units, the developer put 45 two and three-bedroom units at the Ashmore up for auction - with some going for as little as $140,000, or one-third of the initial asking price, for those counting. Despite being sold to AHC at well below original point (the developer picked them up for approximately $186,000 each), the units at the Ashmore still boast standard amenities, including “custom cabinetry, ceramic flooring, crown molding” and a community center with a pool and fitness center.

For the County’s part, they seem pleased to have funded an arrangement that will provide affordable housing, while sidestepping the obvious the downsides of providing for a ghost town smack in the middle of the County (see the current market conditions in Florida for numerous examples of less fortuitous outcomes).

“Creating and preserving affordable housing is one of my highest priorities,” said County Executive Isiah Leggett in a statement announcing the sale. “I am pleased that the Housing Initiative Fund is being used to acquire more than two dozen condominiums and make them affordable for eligible residents.”

Maryland real estate news

Georgia Avenue Parcel and Plans Up for Sale

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

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

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

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

Washington DC commercial real estate news