EastBanc's West End Project Encounters More Legal Hurdles

The redevelopment of West End's library and fire station--that long running saga--has hit another speed bump. EastBanc-W.D.C. Partners LLC, the development team, had spoken optimistically about breaking ground in 2012, but it looks like a lawsuit filed by a library watchdog group will push that back until March 2013 at the earliest.

It's been a long road. The development team--which consists of EastBanc, The Warrenton Group, Dantes Partners, and L.S. Caldwell & Associates--was granted the project in 2007, then lost it due to community outcry that there hadn't been a fair bidding process. In 2010, they won a competitive bid, beating out one other competitor, and since then have held some 70-odd meetings (by their own count) to keep the community abreast of plans. 

The project has always been a complicated one. It includes two separate parcels: one, Square 37, sits at the corner of 24th and L streets and includes the low-rise, funky West End Library, as well as a police operations facility and a parking lot; the other is Square 50 at 2225 M Street and and includes the West End fire station. EastBanc won the project by promising to rebuild the library and fire station; in return, the city gave the developers the land, then valued at $20 million, for free.

And therein lies the problem. The DC Library Renaissance Project, an organization founded by Ralph Nader to improve the city's library system, claims that EastBanc is dodging the affordable housing requirements that exist under the city's newish inclusionary zoning policy by calling the library and firehouse "amenities."

"We don't understand why [the library and firehouse] would count on the balance sheet of the PUD process for the developer," explained Robin Diener, director of the DC Library Renaissance Project. "The city is selling the land to EastBanc. They're not giving money, they're giving new facilities as payment." As a result, says Diener, the developers should still provide a certain percentage of affordable housing in each square as required under inclusionary zoning.

But the DC Zoning Commission agrees with EastBanc. This spring, the commission granted the developer's application for a map amendment for Square 37. And in June, when the DC Library Renaissance Project applied for a reconsideration of that decision, the Zoning Commission denied their effort, writing, "The enhanced level of service that will result from the construction of the new library and fire station so clearly will enhance the neighborhood that they set a benchmark in excellence for any future requests for Inclusionary Zoning waivers through the PUD process."

In response, the library advocates filed a notice last week in the DC Court of Appeals that they intend to appeal the Zoning Commission's decision, not an idle threat since the group has been at least partially successful in stopping the project since at least 2006.

"We're certain there's no merit, but we'll file a brief arguing that no, the Zoning Commission didn't make mistakes in its decision," said Joe Sternlieb, EastBanc's vice president for real estate acquisitions, in response to questions about the suit. "It can take up to a year, and can cost developers up to $1 million to defend. It's really a nuisance suit."  When will the issue be resolved? "The courts will decide," said Sternlieb. "Hopefully before March."

Despite the threat hanging over its head, EastBanc is moving forward. Sternlieb said that the Square 37 project has gathered all the necessary approvals, including from the Commission on Fine Arts, and the firehouse is almost there. The company is currently working out construction documents and getting financing in place, and Sternlieb is hopeful that they could still break ground in March 2013.

The project, which is being designed by TEN Arquitectos, WDG Architecture and Lemay Erickson Willcox Architects, hasn't changed substantially since 2010 (though TEN hasn't bothered to add the project to its website). Square 37 will become a 10-story building with a library and roughly 7,000 square feet of ground floor retail that faces 23rd Street--including a coffee shop on the corner, adjacent to the library--plus 164 market rate units above. That section does not include any affordable housing.

But the fire station portion does; in fact, all 61 rental units will be priced at 60 percent of the area median income. Some of those units are created under the inclusionary zoning policy, but EastBanc said it couldn't afford to make the entire building affordable without assistance, and so the District kicked in an extra $7 million to go the final distance.

Robin Diener and her colleagues aren't happy about that. Given that the two sites comprise some of the most valuable land in the District, they believe the initial development deal should have been structured so that the city made, rather than spent, money on it.

But neighborhood groups, including the West End Library Friends, Foggy Bottom Association, and the ANC covering the region, overwhelming support the project. 

Washington D.C. real estate development news

Morning Real Estate Review

Bethesda's air rights center on the block for $257m (Gazette)  One of the largest office complexes in Bethesda, owned by TIAA-CREF, holds over 700,000 s.f. of office space, and sold for $140m in 2002.

U.S. home prices post first year over year gain since 2010... (Associated Press) June prices were up, according to S&P/Case Shiller index, the first year over year increase in 2 years.  While far from a trend, policy makers are reaching for any sign of a bright spot in the housing market.

...but the U.S. housing market may be due for a stumble (Forbes)  The market may (or may not) have hit bottom, but the real question is how long it will stay there.  Some evidence indicates that the positive forces halting declines may be unsustainable.

Housing recover moves to the suburbs (Washington Post) Unlike the rest of the country, home prices in DC have been up 29 of the last 33 months, but prices rises have been much more common in the core areas, though suburbs are now showing some resilience as well.

Office of Planning rejects Adams Morgan hotel (Washington Business Journal)  For the second time, the District's Office of Planning says no to the sole hotel in AdMo, despite a strong endorsement from the ANC.  The Zoning Commission now has final say.

Douglas to Seek Second Extension for Uline Arena Redevelopment

With their two year extension on the Uline Arena entitlements running out in mere days, Douglas Development has made a decision - they're sticking with the oft-delayed, complicated project.
"No way are we walking away from this," says Paul Millstein of Douglas Development.  "We're going for an extension as a commercial mixed-use development.  We're still working very aggressively with prospective users.  Thing is, we've got Central Armature right across on the other corner, and it's ugly.  That doesn't help.  And the other corner, catty corner across, isn't developed at all, that doesn't help either.  But we love the site, we believe in it.  We committed early, before they did the grocery store site and the residential. We've put a ton of time into meetings, architecture, planning."

Since purchasing the property in 2004, there has been much speculation, but little certainty, about what Douglas has planned for the historic space.  The space had been used as a trash transfer station, and is now an indoor parking lot - a long way from its auspicious past as a venue that once featured the Beatles, Bob Dylan, and the Temptations.  (Though not all on the same night.)

Part of the problem is that while the space is on the National Register of Historic Places, meaning it can't be demolished as part of any redevelopment, it's not, well, very good at its intended purpose.  When a local arts group put on a drama performance at Uline in early 2011, reviewers noted the poor acoustics of the space, a complaint that some local historians claim has echoed (see what I did there?) through the ages, right from Uline's opening.  Still, the poor acoustics could be remedied, at least in part, by a redevelopment, preserving Uline as an arts performance space - a prospect that is still very much on the table, according to Millstein.

"We're still looking at an entertainment component on the ground floor," Millstein says.  "Something, for example, like the Fillmore in Silver Spring, or maybe an even larger venue.  Retail use could also do extremely well."

The HPRB approved Douglas' preliminary plan in 2008, a GTM Architects-designed concept that keeps the familiar Uline facade intact and preserves the cavernous interior as a multi-level atrium, into which extensive skylights would admit natural light, giving the shell the illusion of transparency.  Those plans - which remain very much in flux - would incorporate 290,000 s.f. of commercial office space, 75,000 s.f. of ground floor retail space, and up to 225 residences.  That design received one two-year extension already, in September 2010, which brings us to the present day.  That extension expires next month, though Douglas has every intention of applying for another.

So what's the next step?

"The next step is to file a request for extension, and get those entitlements extended," says Millstein.  "There will be a hearing, but I think we'll be successful in our extension.  The last couple - three years, nothing much has happened in the area, though now there's a lot of residential stuff popping up, even some office.  But the area's still got quite a ways to go.  I would hope that in the next cycle, the next 24 months, Uline will really take off, and I think it will.  I think our time has come."

Washington D.C. real estate development news

Morning Real Estate Review

Akridge takes on new partner at 1200 17th Street (Herald Online)  Akridge announces that Mitsui Fodusan America has bought out First Potomac Realty Trust on its portion of Akridge's office development.

Bob Peck joins Gensler, expanding consulting practice (Washington Post)  Peck, who formerly headed the GSA's Public Building Commission, will serve as a regional head of office design consulting.

Trumps' rejuvenation of Old Post Office recalls Willard renovation (Washington Post) The resuscitation of a historic hotel draws comparisons to Oliver Carr's work reviving the Willard in 1981, though 30 years ago Pennsylvania Avenue was a much different place.

Repeated home refinancing: how low can you go? (Wall Street Journal) Homeowners are repeatedly financing as incentives go up and costs go down.

As housing recovers, will apartment boom end? (CNBC)  With housing showing early (though not consistent) signs of recovering, will it have an effect on the high rents being demanded by apartment builders?

Brookland's Colonel Brooks' Tavern Demolition Within the Month

Despite significant pushback from some locals, Colonel Brooks' Tavern in Brookland is set to be demolished in the next month, marking the end of one of the neighborhood's most recognizable landmarks.

"We anticipate the raze permit coming in the next thirty days," said David Roodberg, President at Horning Brothers.  (The application was filed on August 7th.)  "Of course, it could come sooner.  At this point we're thinking about when we're going to do the work.  We'll probably raze in October and then start in immediately on construction, which should take about two years."

The five-story project at 901 Monroe Street slated to replace the tavern will feature 220 residential units over five stories.  Jointly developed by Horning Brothers, The Menkiti Group, and owner Jim Stiegman, the Esocoff and Associates-designed project is said to be designed to blend in with the neighborhood's brick townhouse aesthetic, and will offer 12,000+ s.f. of ground floor retail space.  (And thanks to an agreement with the ANC, these commercial spaces will be leased to small- to medium-sized stores.)

The project has had a sometimes-rocky road to fruition, though, as community groups feared the new building would usurp the intimate scale of Brookland's commercial strip.  In deference to these concerns, developers revised their plans to shrink the new building's footprint by 12%, reducing its footage down to 197,000 from an original estimate of 220,000 s.f.  The development will also create 150 below-grade parking spaces and 66 bicycle parking spaces, as well as much wider sidewalks, thanks to 15-foot setbacks.

While the tavern will certainly be missed, tavern owner Jim Stiegman has said that business dried up after the tragic robbery/murders in 2003, essentially forcing him to sell.  Rumor has it that Stiegman proactively approached the Menkiti Group about development, and that Horning Brothers were brought in shortly after.

Brookland has seen a surge of development as developers woke up to the potential of a walkable, small scale neighborhood in such close proximity to transit and Catholic University.  The 901 Monroe project follows on the heels of Bozzuto's $200 million Monroe Street Market project that broke ground in late 2011.

Washington D.C. real estate development news

Morning Real Estate Review

A brief history of urban planning (Atlantic Cities)  Now a century old, urban planning has become more about people than about design.

Pushed out by foreclosure?  You have until the end of this year to try and reverse that (Washington Post)  The federal government has given buyers whose houses were foreclosed by banks until July to apply for a review of the foreclosure, but just extended that until December 31.

New Fannie Mae guidelines streamline short sales (Examiner)  The new guidelines follow the FHA's recent rule changes, rules that the government says will help avoid foreclosures by helping borrowers meet easier paperwork requirements.

Carlyle faces suit by Middle East investors (Washington Post)  After losing bets on real estate investments with foreign capital, local real estate investor Carlyle is being sued by its former partners.

Fairfax County approves 8-story apartment building (Patch)  The approval allows A&R Development to move forward with its 173-unit project in Huntington.

Georgetown U. takes on Forest City to help in expansion plans (Washington Post)  Developer of the Yards in southeast DC is tapped to find space for Georgetown's expected expansion in the future as it tries to provide more housing on campus.

Your Next Place

First impressions are vital, and this duplex co-op impresses from the moment you walk in, the foyer lit from far above by a huge skylight.  It was a lot like that time I met my girlfriend's parents and refused to take my sunglasses off the entire meal (what, I was hungover!), except, you know, the complete opposite.

From the entry level you ascend to the main level, which features a huge triangular living area.  The skylit dining area is next to a wall of french doors, which open onto a panoramic view of the city.  Next to that is the superlative kitchen.  Look at that diamond-shaped, marble-topped island!  Look at the custom cupboards, the commercial-grade appliances, the six-burner stove that comes equipped with a griddle!  The gap between the quality of your cooking and the quality of your kitchen will never be larger.  There's also a beautiful study, for your studying (just kidding, being an adult means not ever learning anything ever again), and a truly fine master bathroom that's far too nice for the disgusting things you're going to do in there.

The unit comes with a parking space (indispensable in Adams Morgan) and storage.  Also, the prospective owner will have the rights to build a private roof deck.  I don't know about you, but designing and building your own roof deck sounds like a no-brainer.  I'd just cover the entire roof with Slip-n-Slide material, put up a padded barrier around the edge's perimeter, and let loose.  Yes, I'm 33 years old.

2370 Champlain St. NW #34
3 Bedrooms, 2.5 Baths
$775,000