Tenleytown Gets Retail Improvements

Tenleytown is getting upgraded, a bit. Two new projects near the Metro will breathe some freshness into the retail scene in the neighborhood that has seen little new development and lost its library.

The first is a small lot, but above the Metro, and anything that adds retail to the under-served Tenleytown neighborhood gets noticed. The formerly vacant site above the Tenleytown metro entrance, hitherto a loitering spot of choice for American University and Wilson High students, has been fenced off in preparation for construction of a one-story, 3600 s.f. building, with a "decorative cupola" that will serve retail. Keystone Development, representatives of the property owner Circle Management, have begun work on the site but have not yet scored a retail client. Circle Management owned Tenley's Outer Circle theater, before it was demolished. Keystone has hired K3 Construction Group to build the structure. According to K3 representative Kathy McCormick, the site will be "very challenging" work for its proximity to the metro entrance and tunnel, a process that requires WMATA to sign off.

Down the street, Safeway, Inc. is finalizing plans to renovate the Tenleytown Safeway at the corner of Davenport Street and Wisconsin Avenue.   The building, with its back to busy Wisconsin Avenue is often overlooked by passersby and is long overdue for a facelift. According, to Craig Muckle, a spokesperson for Safeway, the company is working with the community to get input and make sure interested parties have a say in the design process. The plans should be finalized by mid-September.

Renovation of the Safeway will not start until the Georgetown Safeway, which started renovation work several months ago, is completed, to avoid closing two nearby stores simultaneously. The Georgetown store is on schedule for completion in March of 2010. Muckle was unwilling to share other details of the project, saying that it would be "unfair" to spoil the surprise. Renovation and design will be overseen by Torti Gallas. The new designs will incorporate Safeway's "lifestyle" branding - the grocer's move to incorporate urban design principles into their stores by improving pedestrian friendliness and adding more diverse retail into the shopping experience.

Washington DC retail development news

Streetcars on H Street

If you were in the H St NE area today, you might have run into a bit of a snag. District Department of Transportation (DDOT) announced in a traffic advisory that construction and installation of street car rails continues along H St NE. The construction is part of an ongoing street improvement through the Benning Road/H Street Great Streets Project. DDOT spokesman John Lisle indicated they are proactively laying the tracks in concrete during the road improvement so that DDOT does not have to dig up the road again once the issues surrounding the street car are resolved. Forethought, how refreshing. So, street cars next week?

Not so much. The street car element of the $65 million Great Streets project still has some unresolved conflicts, and the cars still gather dust in the Czech Republic. According to Lisle, there is still no final plan on where the cars will turn around to continue their loop. Also, the city's ban on overhead wires in the downtown area means DDOT will either have to find a way to power the street cars without overhead wires or have the law changed to allow them. Lisle said the Benning Road project is set to continue for two more years and anticipates the street car line will be running from 3rd and H St NE to Benning Rd and Oklahoma Avenue, NE, by 2011. Others are less optimistic about the timeline.

Today's street closures, with more Friday, will allow workers to lay tracks at the intersections. In addition, the eastbound curb lane on H Street, NE between 3rd and 5th Streets will be closed to traffic for the next day. On Friday, the intersection of 7th and H Streets, NE will be closed from 9 am to 5 pm, as well as the eastbound curb lane on H Street between 6th and 8th Streets. Have patience, its in the name of progress.

New Pentagon Auxiliary Underway Will be Biggest, Greenest

Construction is underway on an auxiliary to the Pentagon, a behemoth that will be one of Northern Virginia's largest buildings. Despite the size of the Pentagon, which holds 29,000 workers, many Department of Defense (DoD) employees have had to serve at a series of temporary locations over the years. With the structural steel frame now going up, the mini-Pentagon, the future home of 6,400 DoD personnel, is on track for completion in September 2011. The 1.7 million s.f. building will sit on 16 acres of land in Alexandria and will include two office towers, 15 and 17 stories, two parking garages, one below, one adjacent, and a public transportation center for employees and the surrounding community, all a mere 7 miles down I-395 at Mark Center. To round it out, Duke Realty, the developer and seller of the land, is hoping to exceed expectations and go for LEED Gold certification, which would make it the first LEED Gold government facility anywhere. The 2005 Base Realignment and Closure (BRAC) recommendation for the U.S. Army's Fort Belvoir provided the impetus for the move and construction of a new facility. The BRAC called for the DoD to move 6,400 personnel from their leased space in Northern VA. After an extensive search the Army bought the property at Mark Center from Duke and will incorporate it into Fort Belvoir. 

Peter Sholz, Senior VP of DC Operations for Duke Realty, said Duke secured the project at Mark Center because the location met the stringent requirements needed to house the DoD, and that they offered an appealing "pricing and economics." The Mark Center location provides enough land to allow for a security perimeter (the space was previously an empty lot) and offers proximity to an amenity base, I-395 and, of course, the Pentagon. The design process included input from the developers, project architects HKS and WBA, the Army Corps of Engineers and the City of Alexandria; Clark Construction is the general contractor. Mike Nicolaus, Managing Director of the DC office of HKS, said the City of Alexandria wanted a landmark building for the high-visibility location and the Army Corp of Engineers wanted a structure that was both a high performance work place and somewhere workers could "be proud of." The new DoD home will be fenced with secured access points, meeting setback requirements. The two towers, which will connect on their first 10 floors, will have exteriors of precast concrete and glass, materials that meet federally mandated security standards including blast-resistant glass and preventative measures against "progressive collapse." Asked about design challenges, Nicolaus said "making architecture out of that is a challenge," but added that the building will still have a "higher level of architectural design" than most government buildings. Over 24 different user groups will occupy the space. Currently the floor plans are entirely open, but through the space planning process groups will determine head counts and special needs. The interior of the building will likely use a modular SmartWall system like that of the Pentagon, which allows for flexibility in arranging personnel. Sholz indicated he expects that both Metro and Dash buses will adjust their routes to include a new stop, but a shuttle will run to at least one metro station, as well as to the Pentagon. While the details are still being hammered out, Sholz estimated that employee use of public transit could total $10 million per year in transit subsidies.

Alexandria Virginia commercial real estate news

DC's Newest Monument: Fair Housing?

Ahh, those unforgettable vistas that make Washington DC, Washington DC: the White House, the Lincoln Memorial, the Washington Monument...and the Fair Housing Monument? Yes, if Congresswoman Eleanor Holmes Norton realizes her entreaty to Congress to build a monument to the Fair Housing Act - "the last of the great civil rights acts." "Fair Housing and the movement to bring equal opportunity to the real estate market is intertwined with our nation's history. The federal government has been a part of the problem and an integral part of the solution" said Norton in a press release.

Sure, any DC visitor can tell you there are tributes to wars, presidents, generals and battles, but this appears to be the first memorial by the federal government to, well, itself. If Norton finds support, the battle will still be a long one, with Congress having anticipated frivolous monument building by instituting a bureaucracy as a shield, a stop-us-before-we-commemorate-again approach. The National Capitol Planning Commission, the U.S. Commission of Fine Arts, and the National Capital Memorial Advisory Commission are the three federal agencies responsible for the location and design of any new "commemorative works" on federal land.

Dues for the National Association of Realtors are funding the effort, 100% of which will be paid by the NAR and its dues paying members. H.R. 3425, sponsored by Norton, authorizes the Fair Housing Commemorative Foundation to raise funds for construction and design. If the thought of another memorial in place of a ballfield dismays you, there is no cause for immediate alarm. While staff at Norton's office says the bill will be pushed vigorously in September, and may be ready for mark up by then, it still has to make it through Congress, then through a 24 step process controlled by the various commissions. Of course, the Lobsterman Memorial and Titanic Memorial, both in Southwest, show that there are holes in that safety net.

According to Lisa McSpadden, Director of the Office of Public Affairs of NCPC, the average time for a memorial to go from bill to built is 10 years, mostly due to funding, a large majority of which must be in place before construction can proceed. McSpadden says that the applicant for the memorial typically selects a site and presents the request to the commissions, which then 'guide' the process of design and siting, at which point the memorial becomes inevitable, barring a lack of funding.

At least there may be one new make out spot, unless that's just too creepy.

Monument's Southwest Condo Reboots After Lehman Brothers

In a market lean on financing and glutted with faltering projects, Monument Realty announced Monday that their Potomac Place Tower in DC's southwest will move forward with renovation and sales, having secured the support of a new lender. Potomac Place Tower, a 396-unit condominium at 800 4^th Street in Southwest Washington, DC, has been stalled since Lehman Brothers, the primary lender, filed for bankruptcy last September. Designed by Cloethiel Woodard Smith and built in 1959, Potomac Place Tower and Monument Realty were saved from sharing the same fate as another southwest renovation and (failed) condo conversion, The View, which recently sold at foreclosure.

Monument obtained the project as the Capitol Park Apartments in 2001, the aesthetically challenged building was registered as historic landmark in 2003, and in 2005 residents elected to convert it to condominiums; sales began back in March, 2006. Monument employed architect Jane Nelson to renovate and redesign the interiors. According to Natasha Stancill, Director of Marketing at Monument Realty, the owner stopped settling units early last fall, but did continue to sign contracts through the spring with purchasers who were willing to wait out the unresolved financing problems. With the recent announcement, Monument expects to have units available for settlement in the next 30 to 45 days.

In a press release, Monument advertised that Potomac Place Tower has units in the $200,000 range available for occupancy in the next 30 days, including studio, one bedroom, one bedroom with den, and two bedroom units. Records show that Monument sold 132 of the units in the North Tower, with an average price of $241,000. According to Stancill, the North tower renovation is complete and 17 units will be available for settlement in the next 30 days, while the remaining 35 units of the North tower should be ready for settlement come the 1st quarter of 2010. The South tower project is not complete; half of the 200 units there should be ready for settlement in the next 30 days, with the remaining 100 ready before the end of the year.

DC's land records reveal that on January 26, 2009 Lehman assigned Potomac Place to SwedBank AB's New York branch. In a statement, Michael J. Darby, founding Principal of Monument Realty, said that Monument worked with the lender (SwedBank) to resolve a "very complicated situation" and was "pleased to be in a position to pay contractors and vendors and to bring the project back to market." You can bet the vendors and contractors are very pleased too.

Post your comments about this project below

Ashton at Judiciary Square

Sponsored Announcement

Ashton at Judiciary Square is the seductive intersection of Manhattan swank and DC power. Ashton, a contemporary upscale building, brings high-end rentals to downtown. A welcome new residential addition to Penn Quarter, the sleek 12-story glass building boasts 49 spacious apartments and a parking garage, with amenities to match: marbled foyer with inlaid tile, 24-hour concierge, nearly 10 foot ceilings, and a choice of interior styles. Ashton comes furnished or not, short-term (3 month) or long-term leases; panoramic skyline views are standard.

Top floor suites are luxury itself: 3 bedrooms, 2 baths, 2700 s.f., and views from far southeast to Rosslyn and everything in between. Beyond lush apartments, life at Ashton means a gourmet catering kitchen, hotel-style guest suites and an HDTV lounge for residents. Walking distance to Judiciary Square Metro and easy entry to I-395, the Ashton offers VIP access to DC and beyond.

Starting at $3,979, contact 877.289.3162 for information, or visit the Ashton website.

New Condos Complete in Arlington

The first 14 of 89 new condos in Arlington's Courthouse section have finished construction, with the remaining units expected by the end of 2009. With neighbors like the Iwo Jima Memorial and views of the National Mall, Reston-based Waterford Development's Rhodes Hill Square condos may retail for up to $1 million.

Designed by Heffner Architects PC, the units are all large, ranging in size from 1,100 s.f. to over 2,000 s.f. The three wood-framed, 4-story buildings stand over concrete underground parking garages. Most units, 73 of the 89 total, are two stories. All first-level condos private terraces while the upper units provide private rooftop terraces, with standardized finishes like oak floors and granite counters.

The condos cover the area surrounded by N. Rhodes St., 14th St N., N. Rolfe St., and 16th St. North, about three blocks from the Courthouse Metro. WCS Construction managed the project. Construction began in June of 2008, replacing what was largely a vacant field. Waterford has also developed several condominiums in Fairfax, VA.

MoCo's Largest Residential Building is Capped

Montgomery County's tallest residential tower is now in North Bethesda, a 24-story highrise across from the White Flint Mall that earned the distinction just yesterday. The JBG Companies capped the residential portion of the North Bethesda Market on Thursday with the pouring of concrete on the top floor. In addition to the 187-unit tower just off Rockville Pike, North Bethesda Market will feature a new 6-story, 210-unit apartment building and 200,000 square feet of on-site retail space, including Whole Foods (expected to open next summer / fall) and L.A. Fitness, the only retailers to sign up, to date. All the buildings will face an interior courtyard raised above street level. All of the 397 units, about 15% of which will be affordable, are intended to be rental apartments, according to JBG. Despite yesterday's milestone, future residents will have to wait another year to enjoy its "upgraded amenities," if the developer's construction assumptions are correct. JBG says amenities for the new building include a swimming pool, fitness center, billiards lounge, Wii, theater room, and an "exquisitely manicured rooftop courtyard with stunning panoramic views." Completion of the project will also extend Executive Avenue to Rockville Pike. 

HKS Architects was responsible for the design of the overall project. Mike Nicolaus, Managing Director of the DC office of HKS, said the project has been in the works since 2004, highlighting the complexity of zoning approval on the busy corridor. Nicolaus said height was important because the county was looking for a 'gateway' to North Bethesda from the south. "That was part of the rationale for approving something of this height; an important part of the approval process." Regarding the future of the area, Nicolaus thinks Rockville Pike will be much like the Rosslyn-Ballston corridor in density and texture. "Someday soon that that entire neighborhood is going to be very dense." HKS has designed numerous large scale projects in the area, including Waterview in Rosslyn and Gallery Place in DC's Chinatown. Torti Gallas performed initial site designs, Clark Construction is the project's general contractor. The project, then in the planning stage, was recognized in 2005 by the Washington Smart Growth Alliance. JBG is one of the largest real estate developers in the DC area.

North Bethesda commercial real estate news

Southwest IM Pei Apartment Sold at Foreclosure

The View from SW waterfront is slightly less auspicious now for Fairfield Residential. A source familiar with the project has confirmed that The View, designed by IM Pei in the '60's and purchased by Fairfield in 2003, has been sold at foreclosure to Titex Marina View, LLC, an Atlanta, GA based LLC and subsidiary of Titex Real Estate Advisors of Delaware. According to SWDCBlog, in a late night, covert lit drop (notes slipped under residents' doors), Fairfield notified current residents of the ownership change and assured tenants they could continue to rent, for now.

Fairfield purchased The View, located at 1100 6th Street SW, and the adjacent parking lots neighboring the Southwest Waterfront project, and hired Esocoff and Associates to redesign the aged building as a mixture of new construction and interior renovations on the two landmarked forty-six year-old I.M. Pei towers. Another residential tower (see rendering below) was to have replaced the surface parking, but that never quite got off the ground and the parking lots are still going strong.

Fairfield modified its PUD in late 2008 because the south tower of the project had initially been planned as a condo, but market forces required financing as rental apartments. At the time, Graham Brock of Fairfield discussed the limitations of the financial system and how they had affected the project. Brock said the "existing residents in the Pei towers wanted the option of home ownership, but then we struggled to find ways to finance that building and get those residents to qualify for loans. The market changed and the deal we had come up with wasn't as strong anymore." It would appear even the rental option was not strong enough to sustain Fairfield's hold on Pei's work. In retrospect, maybe condos, now scarcer, would have been the better option.

Beginning in mid-April 2008, Marina View Trustee LLC and Marina View Towers LLC (co-grantors of the property with Fairfield) refinanced their $14.5 million loan with Wachovia Mutlifamily Capital, Inc. The next day, Wachovia signed over its Deed of Trust with Marina View Towers for the sum of $10 to Fannie Mae, and with it the first lien of the Deed of Trust. On July 14th of this year, Fannie Mae signed over the Deed of Trust to Tritex Marina View. On July 28, Tritex designated substitute trustees from the law firm Lerch, Early & Brewer, Chtd. Tritex has been involved in a series of large real estate transactions over the past few years, taking advantage of a commercial market that is weak, and getting weaker.

DC v. Federal Tax Credits

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

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

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

Columbia Pike Construction Commences

With big changes ever promised for Columbia Pike, evidence of actual progress is worthy of comment, especially when that progress is on schedule. Such is the case of Penrose Square. The only remnant of the former tenants at 2405 and 2501 Columbia Pike is the sad Giant Food sign surrounded by trailers, fences and barbed wire, but the project is on track for its scheduled delivery of late 2011.

Back in March, Foulger-Pratt Contracting won the $79 million construction contract for the building, and construction is now underway; Heffner Architects of Alexandria, Virginia have designed the project. There is little else new on the nearby strip, but Arlington continues to see the slow transformation of Columbia Pike with future plans for a street car with a stop at Penrose.

Carbon Thompson and B.M. Smith Associates will complete Penrose Square as a mixed-use development to include 325 rental apartments, 97,000 s.f. of retail space, and three levels of below-grade parking. Included in the retail space is a rebuilt, 57,000 s.f. Giant supermarket, with the residential units built above. The developers have also donated a parcel of land in front of the development for a new town square for pikers, also called Penrose Square, though right now it's all just one big hole.

The property is bordered by Columbia Pike to the south, Adams Street to the east, 9th Street to the North. Despite the new density, the height will remain low; 6 to 7 stories along Columbia Pike tapering to 3 1/2 stories along 9th Street.

DC Opens Ballpark Pier to Water Taxi

The District of Columbia announced today that it is ready to open water taxi service to the ballpark. The small Anacostia River pier, part of Diamond Teague Park, is adjacent to the Nationals ballpark, and will accommodate water taxi service to Maryland and Virginia, though not to other points within DC. At least not for now.


According to the District, six charter companies will operate up to a dozen different vessels, ranging in capacity up to 149 passengers, that will operate between the new pier, National Harbor, and Old Town, Alexandria. Service will be made available for all Nationals home games and "special events." But don't go queuing up for taxi service just yet, because its not available. While the pier is "open," that applies only to charter services that choose to operate. While the District-owned pier is technically available for taxi service, potentially to Georgetown and Southwest, operators that choose to establish service have not yet begun regular service, though individuals associated with the project expect that will happen for next year's games.

The surrounding park is not nearly complete, and isn't expected to be substantially complete until well after baseball season, leaving the District's announcement, following a canceled press conference, seeming in haste. The District government paid $8.5m for the new piers, the pier will be administered by the operators of the Gangplank Marina in Southwest DC.

The District government is also building a second pier at the same location, for "environmental education" and for smaller boats, which are expected to offer ecotourism up the Anacostia River.

DC Property Tax Auction: All Inventory Must Go!

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

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

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

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

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

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

Streamlined Bus Terminal at Union Station?

Congress is mulling big changes for Union Station including a new intercity bus terminal, improved rail passenger access and reduced congestion via two new concourses, proposed reinforcement of the H St bridge, altered and additional metro entrances and the renovation and expansion of the north station entrance. During a July Congressional hearing, lawmakers urged project officials to create a master plan so the Members could seek funding from their Congressional colleagues. The project could move forward with as soon as this fall.

The plans seek to streamline Union Station's role as a transportation hub with an intercity bus terminal. The current Greyhound Bus station is separate from Union Station, requiring passengers to walk outdoors for several minutes through a less-than-ideal area in terms of safety and accessibility; Greyhound has recently pursued moving into the train station. The bus terminal may be home to other bus lines including Bolt Bus and DC2NY among others. In addition to the connected bus terminal, two new metro entrances may be incorporated in the redesign.

Initially, the Union Station Redevelopment Corporation (USRC) would not allow buses to use the station as a hub. But after several letters from House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) and Subcommittee Chair Eleanor Holmes Norton (D-DC), the USRC and Greyhound began cooperating and testified before the Committee in 2008. This most recent hearing was meant to update Congress and expedite the process.

Chip Akridge, Chairman of Akridge Development, which purchased the air rights of Union Station's train lines in 2006, called the plan a "vast improvement for intercity bus passengers" because it offers a safer and more direct transfer. The developer plans to build the gargantuan 3 million-s.f. Burnham Place, named after Union Station's architect, which will extend north of Union station, past the Hopscotch Bridge on H Street, and house a 400-room hotel, residential towers and first-class office and retail space. Akridge requested $40 million for a new bus terminal and two new metro entrances. The metro access points would be at 1st St NE below the H St overpass, with a connecting walkway to the existing metro ticketing area, and at H St. NE, directly adjacent to the planned terminal. In a statement, David S. Ball, President of the USRC, said the group will be able to move forward with plans pending a study of the physical limitations of the existing parking deck, which has been suggested as a location for the bus terminal. The 42,000 s.f. of space, a portion of the total 140,000 s.f. current parking deck, is being evaluated for the cost of delivery of utilities as well as its structural carrying capacity. The study will help determine the cost of building the terminal, allowing the involved parties to make end user, design, construction, financing and scheduling decisions as early as this fall.

According to Ball, the engineering firm has promised delivery of their evaluation of the parking deck this week. Ball also indicated that the current plans and numbers are very fluid; the actual amount of space devoted to the bus terminal may change pending the report.

Capitol Quarter's LEED Silver Townhomes Open Next Week

Next Wednesday, Washington DC officials and developers will celebrate the first occupancies of the Capitol Quarter community of new market-rate townhomes, affordable workforce homes, and public rental apartments in the Capitol Riverfront Neighborhood. The 208 townhomes along 7 city blocks are walking distance from the Navy Yard, Capitol South and Eastern Market Metro stations. The townhomes achieved Silver LEED for Homes certification and together make up the nation's largest "LEED for Homes" community.

The construction, which began in mid-2008, proceeded in two Phases, the first covering four blocks, the second covering the remaining three blocks. Phase I should be completed in May of 2010 according to Jennifer Hebert, Director of Marketing for EYA. This first phase consists of 77 market-rate townhouses, 36 work force homes, 39 public housing rentals, and 8 Housing Choice Voucher (HCV) units. Only the market-rate and workforce homes are LEED for Homes certified. For Phase I, 53 of the 77 market-rate townhomes are sold (22 are settled), all 36 workforce homes are sold (7 are settled), and Hebert indicated the District of Columbia Housing Authority (DCHA) has been filling the rental units as quickly as they can be built. Phase II will begin after Phase I is complete and EYA expects Phase II to finish some time in 2012.

DCHA, DC Mayor Adrian M. Fenty, and EYA will attend the ribbon cutting ceremony scheduled for Wednesday, August 26 at 10:00 AM to celebrate the first occupancies in the neighborhood. Capitol Quarter was developed through a public/private partnership among the US Department of Housing and Urban Development, DCHA, the District of Columbia government, Forest City, Urban Atlantic and EYA. According to Michael Kelly, DCHA Executive Director, DCHA and EYA have committed over 40% of labor contracts for the construction work to local and small businesses.

The two, three and four bedroom units were designed by Lessard Group. Each home has ENERGY STAR appliances and other green amenities, such as high-efficiency cooling units and low flow plumbing fixtures. The market-rate townhomes range from $635k to the mid-$700s. The workforce homes were sold in two releases; the first ranged between $295k and $350k and the second ranged from $350k to $450k. Finally, the rental unit rates are set by DCHA, but generally ask the occupants to pay 30% of their income towards rent.

Tax Credit: Buy Now! Or Wait...

Fence-sitters beware: The $8,000 first-time home-buyer tax credit is about to expire, leaving one of the nation's best giveaways (unless you're a GM union worker, or banking exec, or car salesman) near its end. The tax credit, signed in February, was one of President Obama's initiatives to jolt the economy, and provides an $8,000 credit back - not just a deduction - regardless of the amount of taxes owed, leaving the purchase of a home a huge, legal income tax refuge (see your accountant for details). But the tax credit expires November 30, 2009. Assuming a typical 30 day settlement on the purchase of a new property, buyers have only until October 30th to have a real estate contract in hand. So, assuming you are a first-time homebuyer that makes less than $75,000 ($150,000 for couples), run, don't walk, to your local agent, and begin finding the right home today for the season's best tax dodge. Unless you're a gambler, that is. The income tax credit has been politically popular, and several bills moving through Congress aim to extend the deadline - or even increase it. One such bill, S. 1230, sponsored by Senator Johnny Isakson (R-GA), would replace the current credit with a $15,000 credit, not restricted by income or to first-time home-buyers. "The problem is in the move-up market, not the first-time home-buyer market" explains Isakson's Deputy Press Secretary Marie Gordon. Hence the extension and expansion. Isakson's bill has 14 Republican and 2 Democratic cosponsors, and was only narrowly defeated (47-50) in a recent floor vote. Gordon says the bill will come up again, and feels optimistic that the concept is gaining support. The NAR and NAHB have both enthusiastically supported it - no surprise there - and are working toward its passage. But will it pass? Congress might just be too engrossed in health care to make it happen any time soon, or find the budget numbers so staggeringly lopsided that they cannot afford it, leaving passive buyers wishing they had acted sooner. Then again, it might pay to wait.

Alexandria Workforce Housing Opens Sales Today

Developer EYA will hold a grand opening today for Alexandria Crossing, its workforce housing project in Alexandria, Virginia. These new homes will be priced from $300,000 to $365,000, and will include as much as $20,000 in purchase assistance subsidies from the City of Alexandria's Moderate Income Homeownership Program. Employees of the city and its public school system are eligible for an additional $10,000 in assistance from the city.

Applicants must live or work in Alexandria, and qualify as a first-time homebuyer with an income of less than $71,900 (for an individual) and less than $102,700 for a family of 4. The project is located between Mt. Vernon Avenue and W. Glebe Road - in the words of the developer, "walking distance to countless restaurants and shops."
The 18 new townhouses being offered are part of 102 units of new and converted housing that EYA is building at the site.

Office Condos Beat the Trend in NoMa

It has been almost 20 months since J Street Development and equity-partner Westbrook Real Estate Partners broke ground at 111 K St, NE, one of the city's first office condos, but the NoMa building is approaching the finish line. As pictured below, the low-energy glass curtainwall side is now complete through the 4th floor, thanks to Clark Construction. According to Colleen Scott, the project Senior Construction Manager at J Street, the developer should finish construction this year.

The 11-story, 90,000 s.f. office condominium building, designed by Gensler Architecture Worldwide, offers a quick escape from DC - just a block away from Union Station. The idea of office condos - sold as shells - will catch the ears of residential developers accustomed to spending a third of their time on selection and installation of finishes, nevermind post-settlement warranty issues. Or calls from cranky homeowners. Or replacing barely-knicked wood floors. Or arguing over color selections made two years before. Oh yeah, anyhow, Scott says the units are selling between $550 to $650 per s.f., which compares favorably to the normal range of new condos. The 111 K St building is the only new office condo project in D.C. at present.

Currently five of the eleven floors have sold, tenants include the Sierra Club, the YWCA, and the National Association of Student Personnel Administrators, non-profits all. Scott suggests one of the reasons for non-profit interest is the availability of bond-financing for these tax exempt organizations at a time when regular mortgages are difficult to obtain.

The builder will not attempt LEED certification. Though Scott was quick to point out that their Gensler architects are LEED accredited and have included many "notable green elements" including a green roof, bicycle storage and shower facility (for bike commuters, so yes, that gives you green points) and landscaping that does not require watering.

DC Officially Gets its Convention Center Hotel

Washington DC Mayor Adrian Fenty will hold a very public ceremony this evening to officially ink the legislation that will kick-start, finally, the District's Convention Center Hotel. In a 5:30pm ceremony, the Mayor will sign the New Convention Center Hotel Amendments Act of 2009, granting authority to spend $182m in TIF funds and $35m in bonds to go toward the construction, operation, and maintenance of an 1160-room, 14-story hotel opposite the lonely Convention Center. Technically, the bill amends the Washington Convention Center Authority Act of 1994 to further fund the Washington Convention and Sports Authority (WCSA), which will own the hotel, and instructs the WCSA to contract Quadrangle Development to get it built, and with Marriott to operate the new hotel. The Act authorizes Tax Increment Financing (TIF) and the issuance of bonds, to fund up to $206m in construction and operational costs. The remainder will be paid for by private developers. Funds derived from bonds and TIFs will go solely toward hotel expenses, and not into DC's General Fund. The District government has actively conspired to get the new beds as a rebuttal to National Harbor, which hosts a larger convention center and five, count 'em, five hotels surrounding it. Not to mention that a nice river runs by it. But back to DC, where the massive hotel will serve the convention center, and ensure the success of the convention center. Of course, it was the convention center itself that was supposed defibrillate the moribund Shaw neighborhood and spark development of the area, expectations that many of the convention center's original backers feel have not been met. Officials have maintained that construction could start as early as October, with about a three-year time frame for completion. Plans for the hotel went through many iterations before today, beginning with an even more ambitious plan that would have stretched the hotel over L Street and onto the next block for more than 1400 rooms. The city had also pursued a public-financed option that would have committed the Authority to picking up the $530,000,000 tab in full. The current version incorporates the historic American Federation of Labor Building (pictured) into the Marriott, which will otherwise overtake a swath of surface parking lots. The hotel will become the third largest in DC, and fourth largest in the region. The largest, at 2000 rooms, remains the Gaylord, at National Harbor.

Washington DC retail and commercial real estate news