Housing Complex

Miller Time!

Ben and Dan Miller, flanked by colleagues Kenny Shin and Brandon Jenkins.

On a clear, late summer evening on H Street NE, the sun lances down the street, turning newly-laid streetcar tracks into rivulets of gold. Young professionals scuttle along, hauling backpacks and briefcases. But Ben and Dan Miller, along with their colleague Brandon Jenkins, saunter. The lanky trio is here to survey their domain, not make a happy hour.

Jenkins, who knows what’s moving behind every vacant storefront, plays the guide. There may be plenty of spaces, he explains, but the real opportunities are few; most places are either spoken for or overpriced. Jenkins walks the brothers back into an alley between the H Street Country Club and the Atlas Performing Arts Center. A little too polished in his pressed buttondown and brown Ray-Bans, Ben regards the hidden intersection with amazement.

“Look at that! If we just opened this up…” he says, transported by the alley’s potential. “We should do this. This is so obvious. I can’t believe we haven’t talked about this.” The younger Dan, whose prep school loafers betray the more casual ambitions of his diaphanous plaid and jeans, agrees. “We love the Fridge,” he adds, referring to the Barracks Row art hangout.

Of course, they’ve learned the curse of H Street real estate: Owners think they’re sitting on a gold mine, and price accordingly. “The second they perceive that this alley could be something great, it becomes impossible to make it great,” Brandon says, with not a little bitterness, as they emerge back onto the sidewalk.

The Miller brothers, though, aren’t your average set of D.C. dreamers. Their developer dad, Herb Miller, put up many of the city’s commercial blocks: Washington Harbour, the Verizon Center, the Georgetown Park mall. Through their family network, they’ve put together a $10 million fund to invest in small-scale restaurant and retail projects in emerging neighborhoods under their company, WestMill Capital. Their first move: Dropping $3.9 million on the 33,000-square foot H Street Autozone, with plans to eventually do…something.

Ten million is lunch money in the development world. The brothers Miller are banking on youthful innovation to leverage that cash into as much cache as possible, using financial models on which Dan, 24 years old and fresh out of Wharton, declines to elaborate.

“We’re doing some pretty crazy shit,” he says, with a wide smile.

Once upon a time, the elder Miller was also thought of as a guy who did some crazy shit. For all his establishment cred today—you don’t get into the Washington Business Hall of Fame for nothing, after all—his Western Development Co. was something of a pathbreaker for the 1980s, doubling down on the District when other firms were fleeing to the ’burbs.

Nowadays, the boys are teaching him new tricks, like the popularity of Bloomingdale’s Big Bear Café, which Herb included in an August presentation touting D.C.’s urban renaissance to hundreds of development types at the Willard Hotel. “What that is is the new generation seeing opportunities where the older generation sees problems,” Herb says of his progeny.

Indeed, the sons aren’t quite of their father’s world. After the presentation, Dan walked out and was chatting on the sidewalk when his father emerged. “Where’d you go?” Herb asked. “Everyone wanted to meet you!”

Dan will tell you he’s grateful for a stint at Credit Suisse, but that he couldn’t bear to stay in finance. After founding a liberal advocacy group—their father is a stalwart Democrat—Ben, now 35 and married with a baby boy, became president of his father’s company, and stayed for seven years before launching WestMill Capital earlier this year. Jenkins is a also corporate refugee, having worked for a national developer building strip malls.

Those big-money backgrounds help the guys understand the kind of capital they’re up against. Over jerk chicken at H Street’s Taste of Jamaica—we tried to get a table at Toki Underground, but balked at a 45-minute wait—they told me about something called a 1031 exchange, a tax loophole that makes it easier for big investors to build something that they can lease quickly, sell, and then roll over the profits into a new investment without paying capital gains tax.

The kind of neighborhood development the lads say they want to do, partnering with operators and owning for the long term, runs directly counter to dominant financial incentive structures. And they wax idealistic when explaining why they want to forego the world of 1031s. “You just end up with this homogenous America,” Ben says, with frank disdain.

It’s easy to be so brave, of course, when you were raised as Herb Miller’s kid. The pair grew up in a Q Street NW manse and met Jenkins at Georgetown Day School. In their childhood world, H Street didn’t exist. They’ll readily admit as much—then check themselves when they realize the political implications of negating a time when the strip served almost exclusively black people. But since going into business, the Millers have met the layer of restauranteurs and entertainers making D.C. hip—the Ian Hiltons and Xavier Cerveras and Joe Englerts—and discovered the neighborhoods they had transformed while the Georgetown boys weren’t watching.

Capitol Hill Association of Merchants & Professionals executive director Julia Christian says she’s impressed with the brothers’ outreach. “Anytime that someone really digs in to find what’s the right thing to do, as opposed to what’s going to make them the most money, it’s just really refreshing,” she says. Spreading cash helps, too. Besides meeting the neighborhood, WestMill Capital became a gold sponsor of this year’s Hilly Awards.

For all their focus on emerging neighborhoods, the Millers chose something safer for their office space, a light-filled suite above Kramerbooks in Dupont Circle. The brothers work next to each other, with Jenkins and web developer Kenny Shin in the next room. The décor is eclectic, but carefully curated. Behind Dan’s desk hangs a framed front page of the Philadelphia Inquirer from the day Abraham Lincoln was assassinated (pulled from the walls of the family’s vacation house on the Eastern Shore). Light reading for urbanist types is casually piled on the coffee table: Wallpaper magazine, a book called Urban Atrophy, and a copy of Monocle. Ben’s mutt, Zappa, lounges on a worn rug. They’ll offer you ginger beer or coconut water from a well-stocked kitchen.

Last week, Shin ran through lines of code that will serve as the backbone of a major piece of WestMill’s development strategy: a web portal to engage future customers in their projects. They’re cagey about its exact nature, but promise it’ll be revolutionary.

“We’ll be able to do things that will be normal 10 years from now,” says Ben. A dogeared copy of the 2007 book Wikinomics: How Mass Collaboration Changes Everything sits on his desk. “It’s the Wikinomics approach to real estate.”

Today, the brothers have more immediate concerns. They’re about to close on a small commercial space on the 1300 block of H Street, which they want to serve as a kind of demonstration project for their development philosophy (“People just don’t believe it until it happens,” Dan explains). Office opinions differ on what to do with it, and imaginations are running wild: Dan favors a high-end, Chesapeake Bay farm-to-table concept like a place he loves on Manhattan’s Lower East Side. Ben thinks the neighborhood needs a more informal pizza joint, like Red Rocks in Columbia Heights. Shin wants Bon Chon, the South Korean chicken chain for which people will travel all the way to Annandale, Va.

The Millers get their inspiration on trips to New York City, where the density of people, money, and talent is so great that every hole in every wall seems filled with the kind of wildly creative enterprise that D.C. has only in pockets. Besides checking out opportunities in Brooklyn, they’re also hoping to use their trips to lure down some designers and architects to work on new spaces. “They’re just better in New York,” Dan says.

In the meantime, there’s more straightforward development to do. WestMill’s first big purchase, the Autozone, is proving to be a headache. The shop has a 10-year lease, which says the boys would have to find the car-parts vendor another spot in the immediate area in order to boot it from H Street. But there just aren’t that many 8,000-square-foot lots left. An ideal site on Bladensburg Road got snapped up for a new Denny’s location.

Back on H Street, we walked past a vacant lot at 14th* Street and Maryland Avenue that used to be a Shell station. Maybe—maybe—it could work for the Autozone. “It looks a lot bigger than it does on a map,” Ben says, hopefully. Could they put cars on top instead of having a surface parking lot? Or keep the Autozone where it is, and build something on top?

“Parking on the roof,” muses Dan. “Huh.” It isn’t what anybody had imagined, but might be just crazy enough to work. “It’s always a joke until you actually have to do it,” Ben says.        CP

Visit the Housing Complex blog every day at washingtoncitypaper.com/blogs/housingcomplex. Got a real-estate tip? Send suggestions to ldepillis@washingtoncitypaper.com. Or 202-650-6928.

Comments

  1. #1

    Oh man. These guys are great...

  2. #2

    Over privileged twits spending Daddy's money. They will dump a ton of money into H street and help further inflate that bubble. Good for H street, bad for them and their investors.

  3. #3

    I will throw a shitfit if they try to move AutoZone to 14th and MD. Deal with the bad purchase you made, something good might finally go in across from Checkers and help that intersection.

  4. #4

    Never quite understood why DC politicians don't go to Autozone corporate HQ and makevrhe case for Autozone terminating their lease. They got the lease through a sweetheart deal with city funds. Since then they've been terrible citizens. They allow illegal auto body work in their parking lot, yet for years wouldn't allow the lot to be used after hours to help out neighboring businesses. They rarely even bother to shovel their sidewalks after snow.

    Why can't DC convince them its in their best interest to relocate elsewhere so thwy can be bad citizens elsewhere?

  5. #5

    The 14th and MD site is WAY too small for an auto zone. Most of land there is actually public space, not private property. The lot is only 6,398 SF and you won't get approval to park cars in the public space.

  6. #6

    These guys are HILARIOUS! It will be even funnier watching them miserably fail, but maybe the parents will just replenish it? There's a lot to be said that these guys are looking at H street now, which means they are REALLY late to the game. You guys need to go looking north of Rhode Island Ave.

  7. #7

    Lydia,

    Why did you interview a person from CHAMPS, about H St NE, and not H St Main St or H St CDC?

    What's City Paper's agenda here? I read several of your article and you are constantly praising Joe Englert and the new business on H St, while vilifying and degrading the ones that have been on H St for decades. In one article you used a derogatory term , "the old-timers" to label these business owners and suggested that it's time for their businesses to give-up the ghost and, for the owners to retire.

    To sensationalized the article, you wrote that one of the H St "old-timers" paid $10.00 (yes ten dollars) for her building in the 80s, which was an absolute LIE.

    If you knew anything about real estate and housing, you would have known the $10 amount listed on the deed is standard, industry practice and it is called the "consideration amount".

    FYI-- Ms. Real Property reporter-- the next time you need to look-up the price of a sold property, referenced the loan docs, not the deed.

  8. #8

    should have typed, "reference" the loan docs...

  9. Brian on Capitol Hill
    #9

    Who knows if these guys are capable or not, but if it means we get a little more variety on the street rather than the option of vacant store fronts or themed bars, then I am all for it!

  10. #10

    How does it go? ... promise a hamburger, deliver a steak? You give a new meaning to "second generation rich kids", when referring to developer heirs. One more win for the hard working developers who EARN their place among the building industry.

Leave a Comment

Blogs Linking to this Article

  1. The Brothers Miller Get Ready to Unveil Real Estate Crowdsourcing Doohickey - Housing Complex

    [...] of a development empire who struck off on their own to do neighborhood-scaled retail? When we checked in a few months ago, they were buzzing about a nascent web portal that would allow them to get [...]

  2. D.C. Real Estate Scions Crowdsource Future H Street NE Market Online, With More to Come - City Desk

    [...] year, developers Ben and Daniel Miller promised to deploy some "pretty crazy shit" to make enough to fund their projects, but kept mum on the specifics. As of yesterday, the crazy [...]

Comments Shown. Turn Comments Off.
...