DC's Development Pipeline

Ever since the Fenty administration took over development of the District's publicly-owned property, merging agencies and placing them under his direct supervision, it seems development of blighted blocks has been given a new urgency, even compared to that of the Williams administration - itself a great improvement over its predecessor. But despite weekly announcements from the Mayor and the Office of Planning and Economic Development, many of the projects still have to proceed through the District's infamously thick bureaucracy. But if China can cleanse its murky atmosphere in a few short months, there is cause for optimism that change is in the air here in Washington. DCMud has prepared a rundown of the largest projects now underway, properties in need of developers, and solicitations to look for in the future.

The projects listed below are still being refined. The numbers and square footage assigned to each are conceptual and are subject to change.

Projects With Developers

Southwest Waterfront by Hoffman Streuver will offer 539 market-rate units and 231 affordable units. The $1.5 billion project will also include 350 hotel rooms, 700,000 s.f. of office space and 280,000 s.f. of retail space. On July 15th, the DC Council approved a $198 million TIF/PILOT package to finance park and infrastructure improvements. Groundbreaking is not expected any time soon, with construction lasting at least 6 years.

Waterfront, the erroneously named project at 401 M Street, SW, will deliver 800 market-rate and 200 affordable residential units as well as 1.3 million s.f. of office space and 110,00 s.f. of retail space. Mayor Fenty joined SW Waterfront Associates (Forest City Wasington, Charles E. Smith Vornado) in November to demolish the former Waterside Mall. The $800 million project will sit atop the Waterfront -SEU Metro station.

Clark Realty was selected in February as Master Developer for Poplar Point on the east side of the Anacostia. The number of residential and hotel units they will deliver has not yet been determined, however 30% of all residential units will be affordable. The District and the National Park Services held a public scoping meeting last month for the Environmental Impact Statement of the $2.5 billion project.

Center Leg Freeway on Massachusetts Ave, NW between 2nd and 3rd Streets is being developed by Louis Dreyfus Properties into 100 market- rate and 50 affordable residential units. The $1.1. billion project will cap the exposed section of I-395, and include 2,100,000 s.f. office space and 67,000 s.f. retail space.

The McMillan Sand Filtration Site on North Capital Street and Michigan Avenue will be developed into 820 market-rate units, 351 affordable units, and a 100-room hotel by EYA. The $1 billion project will also deliver 700,000 s.f. of office space and $110,000 s.f. of retail space. The project has long been worked over, but don't make plans for moving in any time soon.

In May the District reached a deal with Hines Archstone to develop a 400-room "high-end" hotel and 100,000 s.f. of additional retail space on "Parcel B", a 53,000 s.f. plot of land that is part of the larger CityCenter DC, the development taking up residence on the old convention center site. The entire $850 million project downtown will deliver 539 market-rate units, 135 affordable units, 476,000 s.f. of office space, and 266,000 s.f. of retail space.

On June 26th, Marriot International, Cooper Carry Architects and EHT Traceries presented plans for the Convention Center Headquarters Hotel to the Historic Preservation Review Board. Located on the Corner of 9th Street and Massachusetts Avenue, NW, the $550 million project will deliver 1125 hotel rooms and 25,00 s.f. of retail space. Having been scaled back from its original 1400 bed facility, the project is well past its early schedule, of construction in 2007.

O Street Market at 7th Street and Georgia Avenue will be transformed into a mixed-use development that will include 550 market-rate and 80 affordable residential units by Roadside Development. The $329 million development will replace a current Giant supermarket with a new 71,000 s.f. store and include a 200 unit hotel and 87,000 s.f. of retail space. The District reached an agreement with the developer late last month to kickstart financing. Of the dozens of projects promising to revitalize the Shaw neighborhood, this may be the first large project to actually get underway.

Skyland Shopping Center on Good Hope Road at Naylor and Alabama Avenue, SE will be developed by Rappaport Companies and William C. Smith Companies into a $261 million development with 155 market-rate units and 66 affordable units as well as 230,000 s.f. of retail space. When? Even an estimate will be fine.

City Vista, which began sales in late 2005, will bring 441 condos with 138 affordable residential units to, as well as a separate apartment building, to 5th and K Streets, NW. The project will also include 130,000 s.f. of retail space and will cost $191 million. The first condominium building completed last October, the remaining condominium and the apartment building are nearly ready for occupancy.

Early this year, Fenty signed a Land Disposition Agreement with Broadcast Center One Partners LLC, (Ellis Development and Four Points, LLC) that will bring African-American-owned Radio One to the district. The $144 million Broadcast Center One at 7th and S Streets, NW will be a mixed-use project with 135 market-rate and 45 affordable residential units as well as 96,000 s.f. of office space and 22,000 s.f. of retail space. According to Fenty's office, "the deal also sets in motion the $22 million redevelopment of the Howard Theater, a long-shuttered landmark that was the hub of black Broadway." If it gets built; the timeline remains uncertain.

Mt. Carmel (Parcel 51B) on 3rd Street, NW between K and H Streets is being developed by MQW LLC (Quadrangle and the Wilkes Companies) into $130 million mixed-use project with 267 market-rate units, 67 affordable units and 90,000 s.f. office space.

Forest City Washington is responsible for the $120 million O Street SE Redevelopment by the SE Federal Center. It will deliver 354 market-rate units, 89 affordable units and 47,000 s.f. of retail space.

The Village at Dakota Crossing in Fort Lincoln by Ft. Lincoln New Town Corporation will include 327 market-rate and 30 affordable units. It will cost $110 million.

Mid City Urban and A&R Development will bring 216 market-rate and 54 affordable residential units as well as 70,000 s.f. of retail space to the area around the Rhode Island Avenue Metro station with their $105 million Rhode Island Station project. First attempted as a condo project, developers have bowed to the market and substituted apartment buildings - at least in theory, as the project has yet to break ground.

The $100 million Shops at Dakota Crossing on New York and South Dakota Avenue, NE will be developed by Ft. Lincoln New Town Corporation into 29,000 s.f. of office space and 461,000 s.f. of retail space.

Lowe Enterprises and Jack Sophie Development have long had intentions to develop Riggs Road and South Dakota Avenue, NE (Triangle Parcel) into 208 market-rate units, 52 affordable units and 23,223 s.f. of retail to the tune of $75 million. The fate of the project is uncertain, as higher construction costs, shrinking condo prices, and more conservative lending practices - especially in low-income neighborhoods, make such projects harder to justify.

Park Place on Georgia Avenue in Petworth will be developed by Donatelli Development into 161 market-rate units, 32 affordable units and 16,000 s.f of retail space and will cost $60 million. Purchased by Donatelli, along with partners Gragg & Associates, Canyon Capital Realty Advisors and Earvin 'Magic' Johnson, will be one of the few developers delivering new condos in 2009.

In February, the District made a Term Sheet with Parcel 42 Partners to develop 95 affordable housing units and 8,000 s.f. of retail space on Parcel 42, in Shaw at 7th and Rhode Island Avenue, NW for $28 million.

In December 2007, the District selected William C. Smtih Companies and the Jair Lynch Companies to develop the $700 million Northwest One New Community that will deliver 1,600 units of housing on former NCRC parcels as well as adjacent DC-controlled and private properties in Ward 6. Located between North Capitol Street, New York Avenue, New Jersey Avenue, and K Street, the site is in an area that has "long been plagued by high crime and poverty", but is surrounded by the up-and-coming NoMa and Mt.Vernon Triangle neighborhoods. The development team, which also includes Banneker Ventures and CPDC (affordable housing provider), will create apartments, townhouses, and condos for all income levels as well as over 40,000 s.f. of retail and 220,000 s.f. of office space. The development will also offer a 21,000 s.f. clinic.

And further down the road...

The District issued a solicitation in early June for Parcel 69 at 4th, 6th, and E Streets, SW. The $130 million development will be an office and hotel project along the Southwest freeway. Proposals are due by September 15th.

In May, Fenty issued an RFEI for the Hill East Waterfront on Capitol Hill East. The District seeks a developer to create 2,100 market-rate and 900 affordable units with 2,000,000 s.f office space and 67,000 s.f. of retail space. The District anticipates a price tag of $1.1 billion for the development of the 50 acres surrounding the former DC General Hospital. Proposals are due by October 31st.

Proposals were due June 3rd for Minnesota and Benning Road, NE Phase II. The $107 million development will include 60 market rate, 392 affordable units and 40,000 s.f. of retail. No developer has been selected.

It is high time the District announced developer for Fifth and I Street, NW. After proposals were submitted in March, the District widdled the teams down to the final four including BG, Buccini/Pollin, Potomac Investment Properties, and a group comprised of Holland Development, Donohoe Development, Spectrum Management, and Harris Development. The winning team, whenever they are announced, will create somewhere around 170 market-rate units, 30 affordable units, 100 hotel rooms and 50,000 s.f. of retail space.

Upcoming Solicitations

The District would like to see 1,469 market-rate and 440 affordable units in Lincoln Heights in Ward 7 at an estimated cost of $576 million.

Barry Farm/Park Chester/Wade Road in Ward 8 will likely include 110 market and 330 affordable housing units and will cost around $550 million. The project is an effort to revitalize low-income properties in the historic Anacostia area.

The issuance of the Park Morton solicitation at Park Road and Georgia Avenue, NW is "imminent" according to the Mayor's office and will cost $136 million with 499 market-rate and 150 affordable units. Axis

Howard Issues RFP for Bond Bread Building

Howard University has issued a Request For Proposals (RFP) for real estate developers to submit bids for a "first-class, mixed-use development" at 2112-2146 Georgia Avenue. Part of the 2.2 acre site at the corner of V St. and Georgia Avenue, the Howard Town Center, was offered to Howard by the District of Columbia just two weeks ago in an exchange designed to facilitate Howard's residential development, and the University obviously plans to waste little time in moving forward with development of the neighborhood.

The project is the site of the Bond Bread Building, a property long contested by its one-time tenant, which lost a legal battle for control of the land. According to the RFP, the development "must include rental apartments, retail (including grocery store) and parking," and is strongly suggested to be LEED certified. Though the site has a maximum floor area ratio (or FAR, which limits the amount of floor space in relation to the size of the lot it is built upon) of 6.0 and a height of 90 feet, but also falls within the districts "Duke plan" (for developing Shaw and U Street), which encourages greater height and FAR allowances. The project is expected to have 300 rental units that will comply with D.C.'s formula for market rate and affordable housing. A mandatory pre-bid conference will be held at Howard on May 15th to discuss the project, the terms of which require that the real estate developer enter into a long-term ground lease with the University and undertake all development obligations. Bids are due by June 10.

Howard Town Center to Finally Take Place of Bond Bread Building

One of the District's oldest property struggles may soon see resolution, ending a dispute that began with a promise by Mayor Walter Washington, DC's first elected mayor. Last week, current Mayor Adrian Fenty signed an agreement saying the District will at long last swap land with Howard University, a deal that will give Howard the property it has eyed since beginning its LeDroit Park Initiative for redevelopment more than a decade ago.

This exchange means Howard will receive the former Bond Bread Building at 2146 Georgia Avenue, NW. The lot provides redevelopment space for the long-planned Howard Town Center: 300+ residence units, 70,000+ s.f. of commercial property, a supermarket, and parking. The District will receive in exchange, the site at Florida and Sherman Avenues, and will solicit bids for a mixed-use project to include at least 300 housing units (30 percent affordable). Both Howard University and the District have wanted to complete this seemingly simple exchange but had been foiled by a legal conundrum dating back to Mayor Washington's promise to the Peoples Involvement Corporation (PIC), a 30-year tenant in the Bond Bread Building.

PIC, a federally funded nonprofit focused on community development, was founded in 1968, the year after DC Mayor-Commissioner Walter Washington took office. Washington, who became the first Mayor of the District under home rule, supported PIC, and verbally promised the organization that if it retained tenancy for two decades and made improvements to the property, the District would turn over its ownership of the Bond Bread Building. But, as any first year law student will attest, exchanges of lands do not meet the Statute of Frauds if not in writing.

In relying on the District's promise, PIC renovated the crusty digs, somewhat, and occupied the building for the requisite term. When the District announced its intention to swap the Bond Bread Building with a property belonging to Howard University, the PIC learned that it risked losing what it had seen as a multi-decade investment. The organization sought and received from Mayor Washington a written statement from the former mayor confirming his verbal promise to give away the site. In 2003, to protect its interests, PIC filed a lawsuit with the D.C. Superior Court against the District.

If PIC won its suit, Howard University stood to lose its planned project. The university had already hired Trammell Crow Company’s subsidiary, High Street Residential, and alumna Michelle Hagans to develop the property. The Howard Town Center project had received press coverage from the Washington Business Journal and other local publications as part of its plan to transform the neighborhoods surrounding the university. But Hagans, High Street, the architects, the construction firm, and planned lessees such as Fresh Grocer were now all put on indefinite (or potentially permanent) hold as they waited for the Bread Building dispute to rise.

And rise it did, doubling in size; the District decide to instigate its own suit, and it sued PIC to establish itself as the rightful owner of the property. Legally, Washington’s verbal property promise did not pass muster with the courts. In what would make a picture-perfect law school exam over tenancy rights and verbal promises for land subsequently written, PIC lost both cases, concluding that a Mayor's verbal promises could not be relied upon (duh).

In 2006, the D.C. Council considered the issue, first in a bill sponsored by Councilmember Jack Evans that would have halted the swap, but finally approving the exchange of the Bond Bread Building with Howard University’s 63,400-s.f. property at Sherman and Florida Avenues.

As DCMud reported in June 2007, legislation sponsored by D.C. Councilmember Jim Graham was supposed to get Town Center construction moving that year, with possible completion projected for 2010. Now, almost halfway through 2008, it looks like Howard Town Center may soon get out of its jam and into the Bread Building. The Mayor has said he intends to issue the solicitation for a development partner later this year.

Industry Insight: Armond Spikell of Roadside Development

Armond Spikell started Roadside Development more than 11 years ago, after taking the reigns on a retail center development in what he likes to call "Sleepy Hollow." His projects caught many a retailer's eye, and Spikell found himself soon on his way to abandoning the brokerage business, and taking on the development world head-on. With real estate experience aplenty, and a collection of neighborhood-altering projects along the way, Spikell agreed to talk about his new projects, architecture and the pitfalls of developing in DC. 

DC MUD: What made you enter the real estate development business and how has it changed since then?

Spikell: I had been developing some smaller projects on the side while being a broker, and found one project that my partner Richard Lake had been working on for several years, a piece of land in Virginia owned by a family that was very involved in real estate, but not retail. Someone had brought them an offer to lease the land and develop something we thought was an awful project. Richard showed it to me and I said, ‘don’t let them do that, that would really be a shame. Maybe we ought to develop something for them.’ So we put together a development plan and a pro forma and brought in a fellow that had been one of Richard’s first clients in the leasing business, Todd Weiss. The three of us met with the land owners and showed them our plan and they liked it. We said, 'we’ll joint venture this and build it.' So we built this shopping center, and one of the anchors was a CVS drug store. CVS started talking about having a preferred developer program and asked if we would be interested in participating. So we met with CVS, helped them fashion a preferred developer program, and we started building drugstores. That’s when we named ourselves Roadside Development; since we were building small strip shopping centers and drugstores, we thought it was a perfect name. 

DC MUD: Have things changed much since then? 

Spikell: I guess in ten years a lot changes. One thing that changed is that the shopping center development business became a lot more competitive than it was when we started. It was a couple of companies that were driven by large investment funds that seemed to dominate that business. That wasn’t us. We’re different – some developers, their goal is to put money to work. When they look at a potential project the goal is how much can we get invested, and how much return can we get? We’re a little different. Every one of our projects that we’ve done so far, we’ve done with a different partner, and they’ve all been good partners, but we pick the partner to match the deal, not the deal to match the partner. It gives us a lot more flexibility. 

DC MUD: So would it be fair to say that you try to see where you can have the greatest impact? 

Spikell: I think our approach is more of creative problem solving. Starting with the needs of a land owner or retailer, and sometimes an investor, but in the case of our Potomac Town Center project, there an investor was anxious to make an investment in that market, bought the land along with a development plan and then brought us in to modify the plan to make it work more profitably, then carry it out. So our approach is more problem solving.

DC MUD: So how do you make decisions on what’s worth developing and what’s not? 

Spikell: We look at sites and we think ‘Is there something we can do that’s creative and productive?’ The other thing is, since we don’t have a particular product type that we feel we have to build, a lot of it is looking for opportunities to build projects that are in tune with the community. What we find is, when you go into a community, they’re your customers, and if you want to bring retail, you want to bring retail that your customers want and will patronize. And so there’s a certain synergy there that makes a lot of sense. Purcellville (one of Roadside's retail center projects, pictured above) is a great example. Maybe it would have been more productive for that land to build fast foods and gas stations, but it’s really not what people wanted. What they needed, what there was demand for, was some upscale retail, so that everyone didn’t have to get in their car and drive out to Leesburg. So, it worked out great for us.

DC MUD: Let’s talk about some of your projects; they always seem to be near or around Metro stations, that’s not a coincidence is it?

Spikell: No, we’re big believers in Smart Growth. Since we work in the greater metropolitan area, we work in Howard County, Prince William County, Loudon County, Fairfax, Arlington and Alexandria. And when you have a regional perspective, it becomes all the more clear that for our quality of life and our ecology in general, Smart Growth is very important. It’s very important to have clustered growth where we have the infrastructure in place already. Sprawl is something that should be discouraged. And if you look at retailers that serve urban communities, oftentimes they’re in locations that they secured years ago, and then everything filled in around them. Now when they need a modern facility, they don’t have the space to put their typical prototype, so you have to be very creative. And if you’re near a Metro Stop, it allows you then to build valuable residential that’ll pay for some of the outrageous costs. Like in the case of our O street project, we’re putting all of the truck loading underground. Now a retailer, by itself, could not afford to pay for that. But the fact that there’s residential in a fabulous location within walking distance to gallery place and downtown and has the metro, the residential is paying for that. It’s great synergy. Everybody wins.

DC MUD: Back to O Street Market, we got some questions from some of our readers about whether the Giant Market will be closed during the time construction. Will it?

Spikell: You know, we figured out this very clever phasing plan for Giant, where we could work around them, and then open the new store and close the old one. And they looked at the plan, and they said given the size of this project, where we’re going to be digging this very deep hole and taking out tons and tons of mud out of the ground right in front of our store, it’s not a great environment for our customers, and it’s not a great environment to sell food. So they decided that it probably would make a lot more sense to close down. So the deal we have is that we must complete the store in no greater than two years from the date they close the doors. So in the meantime, we’ll be running shuttle buses to the nearest Giant.

DC MUD: How about architecture, when you’re seeking an architect, what do you look for most?

Spikell: It depends; sometimes we look for an architect who has a lot of retail experience, who kind of gets it and understands the needs of the retailers because retail is a function of business, and the buildings have to function properly, otherwise it’s very expensive and has a significant impact on the bottom line. The other thing is having somebody who designs interesting and high quality projects. It’s a little different; some developers may look more at cost effectiveness and productivity. Those are important, but they’re not the most important things for us.

DC MUD: Are there any architects that you particularly like?

Spikell: The team that we work with most is Shalom Baranes and Rounds VanDuzer. Rounds VanDuzer is, I think, one of the best retail architecture firms in the area. They are very creative, they do attractive buildings and they are very, very experienced with retail.

DC MUD: What about the current market conditions. Do they have an affect on your operations?

Spikell: I mean if you’re talking about the Washington market on a general basis, it’s a terrific place. The local economy is healthy, it’s still producing jobs and the oversupply of housing will get absorbed, and the demand will create a market for new housing. It’s a matter of time. Now we see something very interesting happen in retail. Whenever there’s a slowdown nationally, we get more interest in Washington for retail. The reason is, retailers are driven to expand, and public companies always want to show growth. Now if you have to open stores, where do you look? Well you say, ‘what are the strongest markets, and who’s doing best?’ Washington’s always on that list, and so all of a sudden they always focus more on Washington. Retail can be a little counter-cyclical here, that’s why we get more interest when the rest of the nation is ‘soft.’

DC MUD: Why Shaw, and do you think your timing is good there?

Spikell: Yeah I think our timing is excellent. Even with the current softness of the market, I wish our building was done already – it’s a fabulous location. Already some of the great restaurants are moving in, and I think there will be a lot of new shops opening, and there will be the best grocery store in the entire eastern United States, I think. It’s going to be the biggest grocery store in the city. That being said, if you walk a block, east or west, from our location, you’re on beautiful streets that have wonderful bones. You know, Shaw had its problems with crime, but I think the way you get rid of crime is to get rid of blight. Unfortunately our market building caved in, but we’re going to fix that and I think it will have a real positive effect on the neighborhood.

DC MUD: If you could change one element of the development approval process, what would it be?

Spikell: I think it would be better if we could get the scope and density of a project entitled, separately from having to provide all of the detail and design. In a P.U.D. you’re really answering a lot more questions than I would like to answer before you know whether or not you’ve got something that’s viable. What would be best is if you could go in to a zoning commission, or whichever agency, and say ‘here’s the concept of what we want to do, here are the major elements, here’s the amount of density, here’s how tall the buildings are going to be, and here are the benefits.’ And get them to entitle that before you have to design it and show where every window and every door is, because that’s a different level of design. And I think it’s a detriment to have to go to that extent of design, just to find out whether or not the density and the height is going to be acceptable. And after spending all of that time and money and getting guidance from the Office of Planning, you could go to the Zoning Commission and then get shot down, and I think it would be better of this staged it.

DC MUD: Stage one for functionality and stage two for the design details. 

Spikell: Yeah. And in suburban life they have a site planning process, and you do that first. And once you’ve gone through the site planning process and you get entitled, then you go and you do the rest of the design. That I think would be an advantage. If it could proceed quickly and allowed for reasonable flexibility.

DC MUD: What do you think is the most important aspect in developing a successful project?

Spikell: I think it’s producing something that the market will accept. That’s got to be the most important.

DC MUD: If you had to pick one area in DC with the most economic potential, which would it be?

Spikell: Oh Shaw. Although I will say, you know Shaw is realizing its potential now, but I think there are areas in DC that are just, just beginning. I mean everywhere there’s a metro station, you look at Rhode Island Avenue and Fort Totten. Rhode Island Avenue is a good example; you’ve got industrial uses clustered around metro stations close to downtown. You know that’s not going to last. Fort Totten has major projects already underway. Same thing with Petworth is already underway, and along the green line. No question that those are the places where the greatest opportunities are. And I hope they all develop as good walking neighborhoods.

DC MUD: Your next generation of buildings, will they all be green?

Spikell: Yes. They’re going to be green to the greatest extent that we can make them green. We’re looking at doing a couple of things that are unusual, we’re trying to study new ways that we can do mixed-use. We learned something interesting with Cityline, we never took advantage of it, but I wish we had. We had a retailer there, Best Buy, who never turns on the heat. In the coldest days of the winter, they don’t need heat because they have all these electronics in the store that create heat. And I wish we had a way of utilizing that. So what we’re doing in both our Glebe project and our O street project is: the grocery stores have refrigeration systems that take heat out of the freezers and coolers. What do you do with that heat? In a typical suburban grocery store, they take it up to a unit on the roof that blows it out into the air. We’re looking at ways that we can reclaim that heat that’ll make a difference. The other things that we’re planning on doing are out there already, you know, green roofs and energy efficient appliances and lighting. Both of those grocery stores are very likely to be LEED certified, and we can’t take all of the credit for that because both of those companies, a lot of retailers, are getting on the bandwagon, because its smart. Its smart business.

Howard Town Center to Move Forward Slowly, but Surely

Redeveloping almost an entire city block at Georgia and V streets, Dallas-based High Street Residential, a wholly owned subsidiary of Trammell Crow Company, is planning Howard Town Center, a mixed-use project that will include 70,000 s.f. first-floor retail that may include a Fresh Grocer, 322 market-rate apartments, and a parking garage that will hold approximately 500 spaces at its completion. Designed by Michael Marshall and Gensler and co-developed by Michele Hagans, the $75 million project was announced by developers in April 2003, but has been on hold ever since.

According to Ed Morgan, a Principal at Trammell Crow, developers have been awaiting a final land swap of the city’s Bond Bread Building for the university’s land at Sherman and Florida Avenues. The end may, however, be in sight. Morgan said applications for permits are expected to be submitted in the spring of next year.

While Morgan did not comment on the lawsuit, the Washington Business Journal’s coverage of the suit reported that People’s Involvement Corp., a community development company filed a lawsuit against the city stating that the Bond Bread Building had been promised to the company in the 70’s. That same building was a key component of the aforementioned land swap. A D.C. Superior Court judge ruled in favor of the city in September of 2005, PIC responded with an appeal. In December 2006, D.C. Councilmember Jim Graham introduced legislation to finally begin the construction of the Howard Town Center in 2007.

If permits are obtained in a timely matter, Morgan said the project could be completed as early as 2010.