Year in Preview: D.C. Development in 2011, Before it Happens.
2010 was a big year for development in the District.
Capital markets unfroze, allowing a slew of stalled projects to break ground. Large empty spaces in the architecturally uninspired NoMa and Capitol Riverfront business improvement districts finally started to fill out. A Web-savvy smart growth constituency became a force in planning and politics, and car-centric suburbs awoke to the need for walkability, density, and transit. Meanwhile, a once-popular mayor went down in part because of a sense that he was building too fast and consulting too little with the people affected.
D.C. might have lost its chance at a future World Cup in 2010, but it won the undisputed title of the nation’s fastest growing, most dynamic urban center. We’re No. 1 in job creation and real estate values. All of that has sent cranes rising around the city, and sets D.C. up for a crackerjack 2011—even if a slowdown in city-subsidized building projects takes the edge off a bit.
So what’s on deck for the District this year? Let’s break it down.
For flying dirt, look to Ward 7:
Mayor Vince Gray’s home base will get going in a big way in 2011. Skyland Town Center, a massive mall and condo development at the corner of Good Hope Road SE and Alabama Avenue, made it through the zoning process last summer. If ongoing legal challenges get resolved, demolition could begin by the end of the year. Meanwhile, senior housing and townhouses will kick off the 15.5-acre Parkside development. And Donatelli Development and Blue Skye construction are expected to start work on a 473-unit residential and retail complex at Minnesota Avenue SE and Benning Road SE this spring.
Getting District real estate off the books:
The pace of construction of city facilities like recreation centers, schools, and libraries will probably let up, both because there’s just barely enough money to keep the lights on these days, and because Gray’s priorities are more centered around getting D.C. residents employed than getting concrete in the ground. Nonetheless, there are still a slew of District properties that will likely either be sold to developers or move forward as public-private partnerships.
• In the last weeks of his administration, Adrian Fenty recommended that the landmarked Franklin School on 13th and K streets NW be sold to a private developer. Though a number of advocacy groups want the deteriorating building to be redeveloped for low-income housing, a social services facility, or educational use—on the campaign trail, Gray expressed a preference for the University of the District of Columbia Law School—it’s unclear where 20-odd million dollars would come from to do that. Selling the building to a boutique hotelier might be the only way to finance its renovation (although with the number of hotels already in the works around the city, the business case for another one seems shaky).
• The historic white-brick Stevens School on 21st Street NW between K and L streets, is back in play after community groups got the Fenty administration to yank the building from a private developer that had previously been cleared to renovate it as multifamily housing. Some preferred Don Peebles’s proposal to turn it into yet another luxury hotel, but the latest buzz favors a charter school, a case that will be strengthened by the D.C. Council’s recent vote to give charters the first crack at all school buildings the District decides to unload.
• Speaking of charter schools: The council will also have to decide whether to follow through with a Fenty-backed plan to lease the J.F. Cook School on P Street NW near North Capitol Street to a partnership of the alternative education non-profit YouthBuild and the Latin American Youth Center, which plans to put 47 apartments on the top floor for at-risk youth. Some community members have protested, but with the group’s financing nearly in place and a clear need for transitional youth facilities in the city, the council may plug its ears and let the plan move forward anyway.
• The city will offer a request for proposals for St. Elizabeths East Campus, which is supposed to be transformed into offices and housing for middle-income folks. The proposal will be crafted to help a developer get a chunk of federal funds for sustainable community development, but considering they’re already plowing $3.4 billion into the Department of Homeland Security across the street, there may not be much cash left.
• Plans for the McMillan Sand Filtration Site will hit the Zoning Commission and Historic Preservation Review Board, but the big question remains whether the city will come up with enough money—estimated at $60 million, likely doled out in chunks—to help keep the project moving.
• There will be some re-jiggering of the map at Walter Reed Army Medical Center, where the federal General Services Administration has decided it doesn’t need to keep a full 30 acres after all. That could free up more valuable Georgia Avenue frontage for the District to play with, but also make for more meetings and votes to decide what to do with the Walter Reed site.
• The D.C. Housing Authority is set to finish a number of renovations at housing projects in LeDroit Park and Washington Highlands, and is hoping for another HOPE VI award at Highland Additions. That would mean more mixed-income housing there, along the lines of the Capper/Carrollsburg buildings near the ballpark.
• The Fenty administration ran out the clock on Hill East, where neighbors have been waiting for the contract on the 67-acre development to go to a team led by Gray buddy William C. Smith. The developer plans a heavily residential mix on the site. Gray may decide to break the logjam, or he may let it lie until more funds become available.
Shakeup at the Historic Preservation Review Board:
Five of the nine seats on the board that reviews historically significant projects are set to expire this year, giving the new mayor the chance to reward staunch supporters from more traditionalist groups like the Committee of 100, Capitol Hill Restoration Society, and Dupont Circle Conservancy. Meanwhile, the office–now with a Facebook page!–will formulate a new five-year plan that will focus more on outreach, reflecting chairwoman Catherine Buell’s push to get neighborhoods not so far concerned with historic preservation more involved.
In the Wilson Building:
• Ward 5 Councilmember Harry Thomas Jr., newly elevated to the chairmanship of the Committee on Economic Development, won’t fight particularly hard for conscientious neighborhood planning over big box development.
• It’s going to be a lot harder to land public incentives for development projects, after the backlash against a wave of reluctantly-approved tax abatements at the end of the 2010 D.C. Council session—particularly a $46 million deal for a luxury hotel in Adams Morgan. In the new age of fiscal austerity, At-Large Councilmember Michael A. Brown’s proposal to develop a way to comprehensively and systematically vet all those giveaways may gain some traction.
• Closing a $400 million budget hole will be tremendously painful, since there’s not room in many public agencies to cut: Building inspectors? Police officers? Trash pickup? Emergency rental assistance? Basic city services spared this time around could face reductions come fall, if Gray and the council don’t pass some significant tax increases.
• Gray could set up a redevelopment authority like those in Baltimore and Pittsburgh, consolidating real estate functions at several agencies to bring land into productive use.
In your houses:
• Inventory of homes for sale is really low in popular D.C. neighborhoods like Brookland, Shaw, and Columbia Heights, while most condo and townhouse projects in the works won’t deliver until 2012 or later. That means continued high prices—and pressure on the rental market, as people defer buying and stick to apartments.
• This could be the year the District’s most long-running listings, like the $29.5 million Evermay Estate on 28th Street NW in Georgetown, finally sell—although if they do, I’m betting on some Middle Eastern oil magnate, rather than the kinds of American businessmen and diplomats who’ve owned it historically.
• Sales of multifamily buildings will likely continue at a quick clip, but since city money isn’t available to help assist tenant purchases, more of them could be the kind of creative financing arrangements where a third-party buyer agrees with tenants to buy the building and promises certain protections or improvements.
• Foreclosures of single-family homes will slow down, since recent legislation mandating mediation gives owners every chance in the world to hang on to their houses. At the same time, foreclosures on multifamily buildings—which already started in 2010—could increase, meaning banks become landlords until they manage to sell off the units. Turnover of vacant and blighted properties will also increase, since a new 10 percent tax rate makes it more expensive to hang on to them for long periods of time.
In your neighborhood:
• A few sparks have already flown in neighborhoods targeted for one of the District’s five allowed medical marijuana dispensaries. Expect flare-ups to continue. No community will likely welcome pot shops with open arms, but after the first is established somewhere—perhaps even a high-income, low-crime area like Georgetown, which also has a pawnshop—fear of the unknown will wear off.
• After MidCity’s successful effort to change elements of its zoning overlay—which restricted the number of bars and restaurants that could operate along 14th and U streets NW—the Office of Planning will likely entertain requests from other neighborhoods, like Barracks Row and Cleveland Park, to revisit outdated regulations that have stifled their growth.
• Walmart’s march will continue apace. The Ward 6 store will probably be the first to break ground, since it won’t have to go through extensive city review and hasn’t encountered significant resistance from the neighbors. The three others may take longer to get their approvals, but barring unforeseen changes of heart by developers or councilmembers, they’ll get there eventually.