Monday, November 15, 2010

H Street's gritty, scrappy texture is giving way. In its place, the northeast corridor's devotees will soon find supermarkets, condos, smart retail, upscale apartment buildings, and trolleys clanging by pricey latte vendors. Long predicted, the year 2011 looks ready to bear out prognostications of a gentrification and resurgence that had seemed, until now, like a mirage, always ahead, always retreating. With last week's announcement that Giant officials had signed an agreement to anchor the northeast corner of 3rd and H, kickstarting Steuart Investment Co's long dormant development and blessing H Street with its first full-sized supermarket, the strip has become one of the hottest sites for development plans.

The Steuart project will add 215 apartments above the Giant, along with additional retail space. Around it, development booms. The District just announced a 16-unit residential project by Wall Development at 12th and H that should kick off next year, and at the eastern end Clark broke ground on a 257-unit apartment complex in October, as did an Aldi supermarket destined for the starburst intersection next year. And the biggest project by far will be Rappaport's 400-unit residence that will fill H Street from 8th to 10th Streets, while Dreyfus' plans for Capitol Place, a 300-unit residence opposite the future Giant, are loaded and ready for the right moment. And the trolleys, of course, are on the way.

Things could have been so different. Just two years ago a New York team went bankrupt betting on H Street and lost their 432-unit building at auction. The Giant will sit on the former BP site, a plot that was intended to house an interstate truck-servicing megaplex. Akridge's dreams to connect H Street with downtown by burying the rail yard at Union Station haven't progressed, and the most consequential projects have not yet broken ground, so the volte-face is not guaranteed, but its looking like its going to be a big year for H Street.

Washington DC real estate development news

Friday, November 12, 2010

The overgrown lots at 1421-1423 Flordia Avenue NW have changed hands several times over the last few years, but finally rest in the palms of a developer intent on moving forward with construction. Originally attracting the interest of Kady Group some time ago, the properties were acquired by Bogdan Builders in 2007 for $550,000, and now the paperwork is all but signed in a deal that sees the vacant lots into the arms of Sassan Gharai, founder of SGA Companies. In September, Gharai presented his plans for a six-story, 16-unit condominium to the Meridian Hill Neighborhood Association, and last month Chris Colross of SGA Architects presented his firm's plans to the Historic Preservation Review Board (HPRB). The Board adhered to assigned reviewer and preservation specialist Eldra D. Walker's recommendation to "approve the proposal in concept, delegating final approval to staff."

Rising 60 feet, the masonry clad apartment building will stack ten 2-bedroom/2-bath units and 4 studios atop an eight-space ground-floor garage. The roof of the garage will support a first-floor terrace garden, and each unit will feature either a full or Juliet balcony. While the proposed setback penthouses and an 8-to 12-foot elevator overrun are not counted toward a building’s height and do not require a zoning variance, the project still must go before the BZA, as the parking garage will require the frequently unpopular curb cut on Florida Avenue, resulting in the loss of one parking space (gasp).

Fitting snuggly into the rapidly transformed Greater U Street Historic District, SGA offers their staple - a traditionally inspired design sampling materials found throughout the storied neighborhood: brick, 2/2 windows, stone accents, and metal panels. "The building’s front, side and rear elevations will be fully articulated with ordered fenestration, brick pilasters with stone caps, and horizontal bands of stone," explains Eldra D. Walker, while "large recessed brick panels and a modern embattlement will crown the new structure." Despite the building's height, Walker found the architectural aesthetic to be "understated, calm, and residential in character."

Gharai seems to have his hands full designing and developing as of late, with news that his long-delayed Ecco Park is "back on track." Since Gharai delivered the Butterfield House in 2008 in the market has seen better days, to say the least, but some developers apparently smell a recovery. Quoted recently in the Takoma Park Newsletter, Gharai explained the significance of his decision to kick the 235 Carroll Street NW project back in gear: “I think what it shows is the market’s finally coming around because the banks are willing to lend again.” His optimism must also be the inspiration behind his plans to acquire and develop the lush Meridian Hill property, and hopefully a sign of more good news and development activity to come.


Washington D.C. Real Estate Development Blog

Thursday, November 11, 2010

Several vacant and blighted District-owned lots on the 1100 block of H Street, northeast are set for considerable improvements, as the Office of the Deputy Mayor for Planning and Economic Development (DMPED) has recently announced their partnership with Wall Development in constructing a five-story residential building with ground-floor retail on the site. Constructed as a matter-of-right project (requiring no Zoning variances), and usurping addresses 1113 through 1117 on the south side of H Street, the 16,000 s.f. building will house 16 one-bedroom units. Approximately 2,000 s.f. of ground floor space will be reserved for a retail component, preferably occupied by a local business.

Still very much in the preliminary conceptual stages of design, H-Street based firm Norman Smith Architecture have offered basic drawings of the planned building but continue to fine-tune their renderings in response to community input. Aside from architectural preferences, community members have communicated concerns about needed repairs to the currently existing drainage system and rear alley. They've also voiced their wish to avoid the likely frustrations of development-generated traffic in the alley. Furthermore, local residents have expressed a desire for additional neighborhood-serving retail beyond new restaurants or bars (of which there are a growing number).

Taurus Development Group will serve as general contractor, overseeing construction that is expected to result in a LEED Certified (the base level of certification) status at completion. Estimated development costs are anticipated to total roughly $4.3 million (including land acquisition costs), according to Stan Wall of Wall Development. Subject to DC Council approval, the official land disposition should be finalized in December. But it will take almost another year to finalize the land purchase and financing, with a groundbreaking following shortly after, and construction completion expected in December of 2012.

Although a ribbon cutting lies at least two years off, developers are still giddy to get the ball rolling, as H Street continues to sprout new projects. Wall explains: "I am excited to have the opportunity to build upon the momentum of redevelopment that has been occurring in the H Street corridor over the past several years." Unlike some of the monolithic super-blocks developed downtown, H Street has been slowly but surely revitalized in what seems to be a more organic fashion. Wall says he's proud to further develop what he articulates as H Street's "own unique look and feel that is eclectic and exciting."

While the development itself will be a much-need community benefit, the District will also require the project to achieve minimum targets for CBE business participation. Wall says he is delighted to cooperate to these ends. Providing affordable housing is also an ever-present and important component: there will be two units at 80% AMI and two units at 50% AMI. Additionally, the development, design, and construction teams plan to partner with Phelps Architecture, Engineering, and Construction High School in order to utilize the development process for valuable learning opportunities (site visits to the project, guest speakers at the school, donations of surplus construction materials, etc.). Sounds like a win, win, win.

Washington D.C. Real Estate Development News

Wednesday, November 10, 2010

In June 1866, a 24-year-old African American seaman named Benjamin Drummond became the first patient to be treated at what was then the state-of-the-art Naval Hospital (more recently known as the Old Naval Hospital). Having escaped from a Confederate prison in Galveston, Texas, Drummond attempted to return to duty as a Union sailor, but complications from a gunshot wound suffered three years prior while serving in the Gulf of Mexico forced him to seek medical attention in Washington DC. Drummond was discharged in 1868 with a government pension. The Old Naval Hospital has served many purposes since it first served Drummond in the 19th century, but until recently the stately structure has sat lonely, abandoned, and slowly rotting. Now, after a festive groundbreaking in July, the historic landmark is roughly halfway to its completed $10 million renovation and highly anticipated reincarnation as the community-oriented Hill Center at 9th and Pennsylvania Avenue, SE.

In 2002 the locally-spawned Old Naval Hospital Foundation (ONHF) submitted a comprehensive plan for the property's renovation and reuse as an "educational center for children and adults and a gathering place for community residents" to the city. After earning the endorsement of the Historic Preservation Review Board in 2009, and following the culmination of several years of securing federal grants ($5.5 million of District funds, and $2 million from the federal government), the ONHF is currently moving swiftly forward with plans to open the Hill Center by next summer.

David Bell of Bell Architects PC, a local firm specializing in historic preservation and adaptive reuse projects, helped draw up design plans for the renovation, and continues to work closely with the Foundation. Rosemary Freeman, handling public affairs for the Foundation, explained that her community and the ONHF wishes to "blend the old with the new, so to leave this historic property to our children and future citizens, as well as save lots of energy dollars going forward." In tandem with the development team and architects, the community endeavored to these ends, ensuring that several "nifty, environmentally sustainable, energy-efficient components" were included in the design plans. Two of those gadgets were recently installed, as 32 150-feet-deep geothermal heating wells are nearing completion, and an energy saving machine-room-less elevator was recently shafted into the structure. "We feel it is a model for historic renovations using 'green' technologies," Freeman boasts. Architect Bell believes the geothermal wells to be the "first ground source heat pump of this scale in an historic building in Washington DC."

The Center will offer nine fourth-floor offices, rented to local non-profits hungry for affordable operating space. The rest of the building will offer classrooms and multipurpose meeting spaces (one room will hold 100 people) for "activities, learning, meetings, lectures, classes, exhibits, performances, and civic and social functions for people of all ages and interests." Once the doors are reopened, visitors can expect "drawing and painting, music, parenting, creative writing, cooking and more." A portion of the building will serve to commemorate the proud history of the Naval Hospital, and the Carriage House will be transformed into a "family-friendly cafe." The Foundation is leading mid-construction tours this afternoon for savvy journalist-types to show off their achievements.


Washington D.C. Real Estate Development News
Today it all becomes double super official, as suits and helmets mix it up at the site of the future convention center Marriott Marquis hotel this morning for an official groundbreaking. Construction began last month to build the 1175 rooms that will be owned by The Washington Convention and Sports Authority (WCSA), operated by Marriott, designed by TBS Architects and Cooper Carry Architecture, developed by Quadrangle Development and Capstone Development, on land owned by the District of Columbia. Got that? Okay, for those attending today's event that want to keep the players straight, here's a recap of the last decade of the ups and downs that got us here:

In 2001, the city issues an RFP for construction of a convention center hotel, with the Convention Center then just starting construction; the city calls for a privately funded hotel. DC chose neither of the proposals submitted by Marriott or Hilton, but subsequently announces it has chosen Marriott as a partner. Spring of 2003, the Convention Center opens amid high expectations and early success, but over time conventioneers have difficulty securing large blocks of rooms and opt for other locations; hopes of a post-construction neighborhood renaissance are unrealized. The Washington Convention Center Authority Act of 1994 is amended to further fund the Authority to build a hotel to service the convention center and add yet more convention space. Initial plans call for 1400-1500 rooms in a building that would span both sides of L Street and become the largest hotel in the city.

By early 2007, after numerous iterations of design and location, the District swaps its old convention center site for Kingdon Gould's site at 9th & Mass., Gould retains the northeast corner of what may one day become the CityCenter project. In September of 2007, Mayor Adrian Fenty announces that DC has signed a new agreement with Marriott for the hotel, now dialed back to around 1100 rooms on only one block; Marriott, which does not own the hotels it operates, agrees to lease the property for 99 years. The hotel will feature additional meeting space, an underground tunnel connecting to the Convention Center, and a glass canopied courtyard. The building will feature over 100,000 s.f. of meeting and ballroom space, 25,000 s.f. of retail, and 385 parking spaces. Marriott agrees to earn a LEED Silver rating and hangs on to the land north of L Street, now a decaying row of storefronts.

In June of 2008, HPRB considers plans for an 1100 room hotel, ultimately approving it as long as the American Federation of Labor building (pictured) is spared. With a deal inked involving Quadrangle and Capstone, construction seems near at hand, but the unfolding financial crisis drains developers of financing, halting progress.

In April 2008, the Gaylord National Hotel & Convention Center opens just south of the District inside a $2 billion project with 5 new hotels, a serious competitor for DC's convention trade. In 2009, an agitated Mayor Fenty pursues a public financing option that would have committed the Authority to picking up the $530,000,000 tab in full and proposed legislation that would have removed Quadrangle in place of a city funded program. The Council balked at the cost, and in July of 2009 the Council passes legislation, the New Convention Center Hotel Amendments Act of 2009, granting the WCSA authority to spend more than $200m to go toward construction, up from the previous $135m, with the rest to come from developers.

In August of 2009, Fenty signs the bill with much fanfare, construction of an 1175-key hotel appears imminent, but just two months later, a JBG-controlled company sues the city to delay consummation of the deal, alleging impropriety in DC's awarding process, in what some suspect was related to JBG's disagreement with Marriott over development of their Woodley Park project. JBG contends the city gave the development team a sweetheart deal financed by the city that it never offered the competition. In January of 2010, the Authority countersues JBG, alleging JBG intended to "extort" the city. JBG's suit was dismissed by a Superior Court judge in March.

In July, Marriott, the city and JBG said they had reached a deal to end the stalemate, planning then goes into high gear. By September of 2010, the city authorized WCSA to release $250m in bonds, and in early October preliminary groundwork gets underway. On October 20th the Authority announces it has sold its entire $250m bond release, clearing the last foreseeable hurdle. Today at 11, with speeches that seem longer than the planning, the parties will officially break ground on the hotel.

The four-star hotel is expected to be complete by the spring of 2014.

Washington DC real estate development news

Tuesday, November 9, 2010

In the works since 2007, Silver Spring Park, formerly known as the Moda Vista Residences, is moving forward in the good graces of Montgomery County Planning Board after the board approved the developer's final Site Plan last week. Fenton Group, LLC's application offered a bet-hedging vision that includes office, retail, apartment, and hotel components. The local Silver-Spring firm, headed by Ulysses Glee, has some twenty years of residential development experience, but this ambitious project will be by far their most significant to date.

The one and a half acre site, a consolidation of seven lots located at the northwest corner of the block bounded by Silver Spring Avenue and Fenton Street, and popularly known as the former location of the Fenton Street Market, will make way for a 59,870 s.f., 60-foot-tall Fairfield Inn & Suites hotel with 110 rooms, a 28,170 s.f. office building, and a 58-unit apartment building. A total of 9,234 s.f. ground floor retail will be split between the hotel and office building, while the hotel and apartment buildings will share underground parking facilities. Developers explained that the retail spaces will likely house boutique-sized businesses.

To satisfy County zoning requirements, seven of the proposed apartments will be moderately priced (or MPDUs for jargon junkies), five will be reserved as workforce housing. The streetscapes fronting Fenton and Silver Spring Avenue will get a full makeover as proposed by the developer. Fenton has also committed to earn LEED Silver certification for each of the new buildings. LEED-lovers and the County Arborist might be upset that three trees exceeding 30 inches in diameter will be lost during the necessary bulldozing during construction, but don't fret, as developers are including 14 newly planted canopy trees and 22 mid-story trees as part of their landscape plan.

But these concessions weren't quite enough to please County planners, as the 20% on-site public-use space obligation still needed fulfilling. Fenton's proposed 8,543 "pocket-park" only satisfies 17% of that requirement; as a result, developers will hand over $152,728 to Maryland-National Capital Park and Planning to fund the design and construction of a new bike station at Gene Lynch Urban Park, adjacent to the nearby Silver Spring Transit Center.

Gordon & Greenberg Architects provided architectural designs for the new buildings, while Burgess & Niple shouldered all of the site planning work. Developers expect another six months to finalize construction plans and secure building permits, with construction completion anticipated to arrive 12 to 18 months after the optimistic Spring 2011 groundbreaking.

Silver Spring, MD Real Estate Development News

Monday, November 8, 2010

Call it delicious irony. The U.S. Secret Service, the organization that has seemingly unchallengeable power to take over sites - land, buildings, streets - that it feels it needs to protect the POTUS, are finding it difficult to take over a single building for office space in downtown Washington DC. The building - the historic Webster School - has remained empty for a decade while the agency has been unable to afford renovation, despite its enormous budget and long term lease of the property.

DC residents boxed out of the botched 2009 presidential inauguration and suffering from an ever widening security perimeter around the President may be forgiven a bit of spite toward the enigmatic agency (not that we aren't happy idling in our car for 30 minutes in advance of a Vice Presidential motorcade, and don't even get us started on the Salahi debacle). But the Service says "financial constraints" prevent it from renovating the skeletal eyesore located across the street from the Old Convention Center site and has no plans in the works for the darkened building.

The school, built in 1882, was used to educate naturalized citizens and by DCPS for many years, but saw its last use in the '90s. The National Treasury Employees Union bought the building for $2m and sought to demolish it (claiming special merit for its needs) to make way for a new headquarters, a move thankfully checked by the Historic Preservation Review Board, which then landmarked the building. GSA subsequently exercised eminent domain on behalf of the Secret Service, which hoped to renovate the school as an adjunct facility to its headquarters next door amid rumors of a pending museum for the site. The Service, with an annual budget this year of $1,500,000,000, says it lacks appropriate funding but needs the space for its 7,000 worldwide employees (it won't give the number of employees in DC). "We have plans to make it usable space for Secret Service employees" says Robert Novy, a spokesperson for the Service, dismissing museum theories.

Legally protected from demolition, the building is also being protected from death by natural causes with a minor structural renovation. But with the hole-plugging came exterior scaffolding and plywood sidewalk canopy that has lasted for several years, annoying neighbors, and the Service says it has no immediate intentions, or even designs, to change that until it receives dedicated construction funds. In the interim, the building has been vacant since the Clinton years, a fact that may be noted by an administration that hopes to stanch charges of fiscal profligacy by cutting its inventory of vacant office space, not to mention ax-wielding Republicans that will begin arriving in town over the coming weeks.

So for the time being the corner of 10th and H will remain dark and fenced off, a less-than-inviting streetscape at night, unless the Secret Service can find a way to make money out of a public nuisance. Perhaps they should ask the Salahis.

Washington DC real estate development news