It was announced this afternoon that Mayor Fenty has struck a deal with Hoffman-Struever Waterfront LLC for the redevelopment of the Southwest Waterfront property. As a part of the $1.1 billion redevelopment, the city will be contributing $200 million in public funding for the deal, mostly to pay for public parks, piers, infrastructure, bike trails, promenades etc. Most of the funding will come from tax increment financing as well as ‘payment-in-lieu-of-taxes with the expectation that the ’16 acres along the waterfront’ will increase local taxes sixfold, from $5 million to $32 million. The last announcement of tax increment financing on a development was the 1150 room Convention Center Marriott Hotel.
The project is projected to incorporate “767 housing units, of which 231 will be affordable, 400,000 square feet of office space, 280,000 square feet of retail, 476,000 square feet of hotels and 150,000 square feet of cultural space…including a National Maritime Heritage Museum,” according to the Washington Business Journal. In addition, JBG Companies agreed to offer their land to the partnership in exchange for a 358 room hotel as well as an estimated 45,000 square feet of retail.
The site itself totals 47 acres that stretches from the historic Fish Wharf to Ft. McNair which includes 14 acres of parks and open space. Additionally, according to DMPED,
Neighborhood Investment and Economic Opportunities:
$100 million in infrastructure upgrades, including new parks
New neighborhood-serving and regional retail
Expansion and improvements to the existing fish market to include public seating
Maritime education opportunities
Creation of 1,300 permanent jobs in a variety of industries
Creation of 3,000 construction jobs
Estimated $400 million in total contracts during the next seven years, including $140 million in contracts for certified local, small and disadvantaged businesses (LSDBEs).
Whats great about the project is its proximity to the other larger developments currently underway across the city. If you take a look at the map I have made, the project is amidst the new Half-Street Project from Monument Realty (light blue), the new baseball stadium (green, which incorporates Capitol Yards; four rental buildings and upwards of 1200 residential units, upcoming Poplar Point (pink)and has direct Ferry Access from the proposed route to and from Quantico base.
This coming week, on Wednesday, December 12th, the four remaining Poplar Point development proposals will be presented at Birney Elementary School in at 2501 MLK Jr Ave in SE.
According to the DMPED website, What: The four short-listed teams of developers that responded to the District’s Request for Expressions of Interest (RFEI) to develop Poplar Point will present their proposed vision for the site to the community. The District is seeking a development partner to transform the approximately 130-acre site along the Anacostia River in Ward 8 into a world-class waterfront neighborhood. Who: Development Teams When: Wednesday, December 12, 2007 at 6:30 pm Where: Birney Elementary School
Mayor Adrian M. Fenty
Chairman Vincent C. Gray, D-At Large (Invited)
Councilmember Marion Barry, D-Ward 8 (Invited)
Councilmember Kwame R. Brown, D-At-Large
Councilmember Yvette Alexander, D-Ward 7 (Invited)
Deputy Mayor Neil O. Albert
Clark Realty Capital
Forest City Washington
General Growth Partners, Mid-City Urban, Doracon
2501 Martin Luther King, Jr. Ave, SE
Washington, DC 20020
What: The four short-listed teams of developers that responded to the District’s Request for Expressions of Interest (RFEI) to develop Poplar Point will present their proposed vision for the site to the community. The District is seeking a development partner to transform the approximately 130-acre site along the Anacostia River in Ward 8 into a world-class waterfront neighborhood.
When: Wednesday, December 12, 2007 at 6:30 pm
Where: Birney Elementary School
****If you dont plan to attend but would still like more information, I will be recording the event and will be posting it on here the day after the meeting for everyone to watch****
Thanks to JDLand.com for the notification.
As of last Thursday, the city received seven proposals for Poplar Point, two of which had DC United in mind (see Poplar Point RFEI Draws Seven Proposals).
This morning I had the privilege of attending Marcus & Millichap’s annual Investor Symosium where, surprisingly, both the Deputy Mayor for Planning and Economic Development, Neil Albert, and a Principal for MacFarlane Partners, Bradford Dockser, were panelists, and I had the opportunity to ask, first hand, what the future held for the team and why the team did not submit a bid for Poplar Point. Originally I thought it was the pride of MacFarlane in response to the actions that were taken by Fenty against the team, however Brad’s response to me was actually much clearer than originally thought. The simple fact was that in order to submit a bid, you must be a developer. MacFarlane Partners is not (however, JBG is, and MacFarlane just acquired 50% of JBG’s portfolio. The acquisition could have provided a substantial option for the team but wasn’t utilized).
Additionally, after meeting with Brad, I approached Neil and posed the same question about the site regarding the proposals that were submitted. His response was that they are reviewing four of the seven in serious consideration for the project and that two of the four did incorporate DC United as the main attraction for the site.
Only time will tell where DC United chooses as their new site. In my opinion, DC Government would be ridiculous not to choose to incorporate the team at the new site, risking not only losing a main attraction to the city but upwards of hundreds of million dollars in tax revenue from the ticket sales of the team itself.
As many have been following the recent stories regarding the fate of one of DC’s last 100+ acre sites, Poplar Point may not turn out the way many had originally thought. For three years now the owner of DC United, Victor MacFarlane, and city officials have been negotiating the price the owner would have to contribute to develop the site DC United’s new stadium. At least until Fenty. Months ago, when Fenty and MacFarlane were unable to come to common terms as to the cash input MacFarlane would need to contribute to develop the site, Fenty publicly announced his intent to allow other developers the opportunity to submit their proposals for what they would do with the prime piece of property. As of this past week we have seven interested parties. According to the Washington Business Journal, those parties are:
- Archstone-Smith, one of the developers of the old convention center site, and D.C.-based Madison Marquette
- Clark Realty Capital, based in Arlington, which has done mixed-use developments at Fort Totten and the Vienna Metro station
- Forrest City Enterprises, based in Cleveland, developer of the Yards in D.C. and other property around the Washington Nationals ballpark
- A three-member team formed by General Growth of Chicago, Mid-City Urban LLC of Silver Spring and Doracon Contracting of Baltimore
- City Interests
- Urban-City Ventures LLC
- Capital Area Regional Center Jobs Fund
As you can see, MacFarlane is not on the list. Now, council member (and former mayor) Marion Barry, wants his voice heard. He feels that the cities long-term negotiations with the team should continue and the new site would be ideal not only for the team but for the economy of Anacostia.
As a result of the RFEI, MacFarlane met with the comptrollers from both Virginia and Maryland in an attempt to find a more suitable site outside the city. No information has risen as to whether or not his plans to leave will continue.
In an article released by both the Examiner and WUSA9.com, apparently Ward 8 Council Member (and former Mayor) Marion Barry shunned Fenty for his rebellious actions in submitting an RFEI, request for expressions of interest, globally for developers to submit proposals for the development of Poplar Point. As mentioned in two previous blogs, Poplar Point is a 150-acre site, of which 130 acres are available for the RFEI and 110 acres are able to be developed. For years the site has been set to be turned over to the owner of DC United and nationwide developer based out of California, MacFarlane Partners, until recently. According to both articles, neither Barry nor Ward 8 (where the lot is located) will support anything but the new DC United stadium on the site, which was previously believed to be at a total development cost of nearly $150 Million. Recently, however, Fenty has had a change of heart when he released the RFEI, requesting developers to submit proposals totaling no less than $200 Million, which will include at least 30% affordable housing units and 20 acres of protected park land.
The Poplar Point project is part of a $10 Billion project named the Anacostia Waterfront Initiative.
Poplar Point also happens to be just 2/5ths of a mile from Stuart Kushners proposed project on Pomeroy Rd SE, known for his recent condo conversion at 1817 24th Pl SE. The proposed project will most likely include 12 duplex 2 bedroom condos at 1000 sq ft each with parking. Plans will be upload soon.
For more information about the Poplar Point Project click HERE.
This morning, a joint venture between a locally based investment group, JBG Companies, and a California based company, MacFarlane Partners was announced. The announcement forms the newest DC based investment company Urban JBG LLC, an alliance of two development superpowers into what could currently be the most stable real estate market in the country. According to the Examiner.com, the partnership has been designed to develop or redevelop 93 sites in the area over the next five years, the largest investment of either company to date. Of the 93 sites, it is estimated that nearly 60% are at or near major mass transit locations including the DC Metro or traffic thoroughfares, only increasing the opportunity for expansion and success for both companies.
Whats more interesting, Victor MacFarlane is the principle investor for DC United, Washington DC’s soccer team and the major investor associated with DC’s newest RFEI, Poplar Point in Anacostia, that 130 acre site MacFarlane has been trying to get his hands on with his $150 Million, $50 Million short of the Cities required $200 Million bid for the site.
MacFarlane currently has relationships with one of the most well known developer based real estate companies, Monument Realty, who I would expect will be associated with their release of Residential, Commercial, Retail and Warehousing in their expected development of the area.
Damn sources….this past week the Office of the Deputy Mayor for Planning and Economic Development announced their RFEI, thats request for expressions of interest, on the infamous 150 acre (as per the RFEI) site Poplar Point. According to my original blog, nearly two and a half weeks ago, I offered the confirmation that Poplar Point had received and accepted a proposal for the development of the site and DC United was one of the main attractions to the area. I stand corrected.
In the RFEI, released August 10th, the city formerly announced that they were looking for world-class investors with a proven track record for waterfront development who had strong financial backing to submit proposals for the site. Additionally, the RFEI requests for the use of the new DC United stadium but explicitly states that its not required.
So I read the RFEI and its detail far surpasses the expectation I would have for the cities effort for a proposal such as this. Its worth the read if you have about 30 minutes and it can be found by clicking here.
One of the statements made in the RFEI was Fenty’s mandate for 30% of the units consisting of affordable housing. If you take a look an my blog on affordable housing, you will understand this is the first exposure Fenty has had to support his position on the cities effort to maintain affordable housing throughout the development of the city.
By the way, if there is any interest in this $200 Million dollar investment, the due date for expression of interest is October 19th, 2007.
According to an article published today by NBC4.com, the DC United stadium, originally headed for the 110 acre lot in Poplar Point, may be in a state of scrutiny. According to my original research (and unreleased sources) Poplar point had gotten the contract to be developed. See my previous blog here.
As of yesterday, this may not be the case. Yesterday Fenty publicly released that they are seeking alternative development proposals for the same lot. Why the cause for Fenty’s change of mind? What else but MONEY?!?!?!?
The owner of DC United is only willing to pay $150 Million but the city wants $200 Million for the lot now that the city has realized the potential of profitability. The city wants to initiate a publicly available competitive bidding process for what many would consider one of DC’s last & most valuable assets.
I just came across an article by DCMUD, a publication by dcrealestate.com, that stated their prediction is that condo developments may be cut in half during the next two years when compared to the last two years. What does this mean? Well the simple answer is that an investment in SE DC will reap significantly more benefits than an investment in NW DC. Conisdering the article published last week, “Anacostia from Buy to Strong Buy” I cannot help but support the development of the cheapest land in Washington DC.
According to the estimates stated in the report, only 7600 condos will become available over the next 2 years, versus 13000 in the previous two. My impression of this downturn in release may come in part from a number of reasons:
-DCRA is horrible at aiding the process of condo conversion in Washington DC and based on my interation with many local developers, has scared many developers to maintain their development growth in areas outside the city.
-The real estate market has maintained steady but is unable to provide the growth rates once offered to any developer.
For those of you who are considering investing in our city or developing condos or townhomes, consider the SE Market. Even with sceduled production of unit releases, the earliest a development begun now would be sold is early spring next year. GET STARTED!
Just got out of a meeting with a friend of mine who informed me that there is rumor that the new DC United stadium is going in over on Poplar Point in a 9 acre site. The only reason this land is available is because our president just released the land to DC Government for development. Its going to be an incredible opportunity and I would recommend to any investor, buy in Anacostia! Anywhere!
On the same site will be the new Anacostia waterfront as well as mixed use development including, but not limited to condos, retail storefront, and apartments.
Many would argue against it but I say Yay…it is. Thanks to sellers Darcy & Jake, basically an entire square block in SE DC has been purchased and subdivided into one large lot. My vision for the property would be 60 town homes similar to that of Dakota Crossing and 20 more town homes, each of which is four levels, containing two duplex condos, which would allow for your affordable housing quota. I have already run the numbers and the pro-forma is ready to be shipped. Our friends downtown say the waiver is possible…what do you think? Margins are in the 30%’s
For a copy of the pro-forma please email me at email@example.com.