Housing Complex

Douglas Finally Moving Forward With Mount Vernon Square Projects

VERY APPROXIMATE locations of new Douglas buildings.

Douglas Development has made promises before to Mount Vernon Square, but this time the company says it has one deal signed and another all but done for two large parcels on New York Avenue between 6th and 7th Streets NW. Douglas executive Paul Millstein dropped news of both at an ANC meeting last night.

The first has been hinted at before: A 200-unit, Shalom Baranes-designed rental building on the site where the Fringe Festival has been allowed to stage for the last few years, to be built in a joint venture with residential giant Kettler. That one's in the bag, and Millstein says he hopes to break ground within 12 months.

The second is newer. Douglas plans to sign a lease this month with a large association headquarters that will take the entirety of a 300,000 square foot office building, with ground floor retail. The mystery entity looked at 24 sites in the region, Millstein said, and chose square 451 for a flagship location. He expects a groundbreaking next year.

What did Millstein want from the ANC, then? Approval of a few formalities, like a small alley closing. The stickier request, though, was support for relief from the blighted tax rate on the historic Hodges Sandwich Shop building, which the company agreed to move to the north side of New York Avenue as soon as the residential development began. In the mean time, the little building has deteriorated to the point where it would be taxed at the new ten percent rate–which would cost Douglas $92,000. Millstein said he would ultimately spend $30,000 to fix the building enough to avoid the blighted class, but considering that development was about to begin, thought he should get a pass on this one altogether.

"We have been actively trying to lease, develop, and market this for three years now," Millstein said, before pointing out the flu shots, band uniforms, and thanksgiving turkeys the company had handed out in the community. "We try to be good neighbors. But we really feel that it's an unfair shot to us under these circumstances to be taxed at that rate."

Douglas Development always has to deal with skepticism from a community that has a goodly chunk of the many run-down buildings that the company bought before the boom and was then unable to develop when the market fell apart. Douglas has failed to pay property taxes on its massive portfolio, half of which–some five million square feet–stands vacant.

But ANC 2C chairman Alex Padro, also the man in charge of Shaw Main Streets, came to Millstein's defense. Community groups opposed a similar request from Shiloh Baptist Church last year, he pointed out, because the church hadn't been making efforts to put its many properties in the neighborhood to productive use. Douglas, on the other hand, was honestly a victim of unforseen economic hardship.

The ANC supported the tax relief, for a period of one year, by a vote of two to one.

  • JTE

    "Douglas Development always has to deal with skepticism from a community that has a goodly chunk of the many run-down buildings that the company bought before the boom and was then unable to develop when the market fell apart."

    That's a charitable description. They have been buying blighted properties in bad areas for years, well before the boom and crash, even since Doug had some extra cash from his electronics retail stores in the early 80s.

    They buy and hold, wait for everything else in the area to improve, THEN they develop it...when the equity in the property is huge. Sure, the crash slowed this already sloooooowwwww development model, but they are hardly victims of the real estate crash.

    A Douglas Development-owned property is an albatross around the neck of a neighborhod, and if they recently purchased something---that's really a bad sign.

  • http://lifein.mvsna.org Si Kailian

    one significant piece of news is Millstein said that DD sold 450 K street NW. wow.

  • Bob See

    In Douglas Development's defense, they've preserved many unique buildings, ones that another developer would have deemed too difficult to work with and razed.

  • Anonymous

    Will this be bannered as a part of the "Places from Which You Can See the (a) Douglas Development Sign" or as part of the "Mid City Etc. Arts Etc. District"?

    Does anyone else think the scandal surrounding the slush fund hobbled together to finance this bumblebrained bannering bonanza (for the consultants) cost Jack the Pro-Tem gig on the Council? Word is.....!

  • WardQueen

    "Does anyone else think the scandal surrounding the slush fund hobbled together... bumblebrained bannering bonanza (for the consultants) cost Jack the Pro-Tem gig..."

    Certainly did not help! When some sunshine lights up those banners it might be Finance too!

    200K for consultants to put up some tacky banners...Outrageous!

  • drez

    @Bob See-
    How nice. How much do they owe in back taxes, again?

  • Bob See

    ^I don't know. Should it keep me up at night?

  • Thomas

    I am confused; is it the 450 K Street site or the Block 450 site?

    "The 6th St. and New York Avenue site [on Square 450] hosted A.V. Ristorante Italiano for nearly 60 years before Jemal's Douglas Development Corp. bought it in 2007 with plans to turn it into an office building. The market tanked, plans stalled and, three years later, the only tenants the site has seen are the Fringe Festival and a billboard. To move off the sidelines and onto the playing field, Jemal is considering building apartments. In its mid-year residential market update, Delta Associates reported that there were 500 units planned for the site."
    Jemal mulls downtown residential projects | Washington Business Journal

    "[Douglas Development Corp] is nearing a joint-venture agreement withhome-building giant Kettler on 450 K St. NE, 22,000 square feet Douglas owns in NoMa. Kettler plans more than 200 apartment units."
    Washington Post

    "A 200-unit, Shalom Baranes-designed rental building on the site where the Fringe Festival has been allowed to stage for the last few years [on Square 450], to be built in a joint venture with residential giant Kettler. That one's in the bag, and Millstein says he hopes to break ground within 12 months."
    Washington City Paper

  • Thomas

    Does Douglas Development intend to lease Square 451 or sell Square 451?

    “The AAMC is negotiating to buy a parcel [Square 451] at Seventh and K streets NW from Douglas and build a 300,000-square-foot building there.”
    AAMC picks new headquarters location | Washington Business Journal

    http://www.bizjournals.com/washington/news/2011/01/06/aamc-picks-new-headquarters-location.html

  • http://lifein.mvsna.org Si Kailian

    450 K is a completely different parcel not far from sqs 450/451. The significance is that DD SOLD something. Is this a first?

  • KDC

    RE: JTE
    "A really bad sign?" Douglas Development is the reason Chinatown is what it is today. It used to be an area that people avoided and now it is one that is filled with museums, offices, restaurants, and stores. If anything, it is a good sign if DD purchases property in your neighborhood.

  • Pingback: Mt. Vernon Square Blowing Up: More Condos Planned for 4th and Eye Street - Housing Complex - Washington City Paper

  • Pingback: An Elegant Addition to Mt. Vernon Square - Housing Complex

...