Housing Complex

A Big Chunk of Congress Heights Was Just Auctioned Off. Hardly Anyone Noticed.

housing-48

On typical days, the sprawling collection of abandoned, mostly-built houses and vacant lots tucked behind 4th Street SE sits fenced-in and empty, a distorted mirror image of the flattened construction site across the street, which will soon become the new Ballou High School. But on a recent Wednesday afternoon, a crowd of mostly men (mostly wearing lots of hair gel) milled about the property, examining the vinyl-sided rowhouses and making small talk. Then the auctioneer called the event to order.

"You're here today to buy 400 to 472 Woodcrest Drive," began the auctioneer, Tranzon Fox's Suzy Stegmaier. "The property and all improvements are sold in as-is condition."

The property in question is a 59-lot site on a hillside in Congress Heights, known as the Congress Heights Vistas. The improvements are 18 cookie-cutter townhouses, plus another eight stacked units in four houses, that were finished by the Bernstein Companies after the previous developer, UniDev, ran out of money and bailed on the project. The condition is near-complete for the constructed units, and not-at-all-complete for the remaining lots that'll eventually supply the rest of the property's 94 units, save for a few concrete foundations.

Standing in front of one of the existing townhouses, Stegmaier and a colleague laid out a few ground rules, and then she was off to the races, calling at lightning speed for bids of $6 million for the property. There were no takers. In a blur of syllables, she dropped the starting bid to $5.5 million, then 5, then 4.5, descending all the way to $2.5 million before a silver-haired man in gold-rimmed sunglasses and a black blazer raised the card bearing his bidder number, and the contest was on.

Slowly, the bids climbed, as a Tranzon Fox wrangler with an impressive handlebar mustache urged bidders with outstretched arms and pleas of "C'mon! C'mon!," and cheered their reluctant card-raises with fist-pumping yelps of "Yeeeah!" At one point, Stegmaier asked for bids of $3.9 million. No one bit.

Handlebar turned to the silver-haired bidder. "Three eight-and-a-half!" he yelled hopefully. "Three eight-and-a-half," Silver concurred.

"Ya! Ya! Ya!" shouted Handlebar.

A man with a cast on his arm soon put in a bid for $3.95 million. Silver nudged the bid up to $3.96 million. No one else reacted.

"Going once," said Stegmaier. "Going twice."

A man in the back with a shaved head, a red waffle sweatshirt, and baggy cargo khakis lifted his sign bearing bidder number 959 to up the bid to $3.97 million. Silver went to 3.98. Red agreed to 3.99. Silver raised his bid to $4 million.

"Ten," said Red. $4,010,000.

"I'm done," conceded Silver.

And just like that, in a haze of congratulations and signed documents, a sizable chunk of Congress Heights was handed to a man no one seems to know, for purposes no one but the red-shirted man himself can guess.

* * *

The winning bidder is named Roger Black. He lives, or at least recently lived, in Deale, Md. Several lawsuits have been filed against him in recent years, including a case that was reopened this year in which he and others were accused of knowingly selling shoddily constructed condos in Anacostia and defrauding customers. The case file states, "Black regularly conducts business in Washington, D.C., and is currently developing and selling his own condominium ventures in southeast Washington, D.C."

That is the full extent of the information I was able to gather about Black. I couldn't reach him by phone; Sacha Moise, a real estate agent who helped him at the auction, has called, texted, and left him voicemails over the past two weeks, but got no response. None of the developers active in the area with whom I spoke have heard of him. Ward 8 Councilmember Marion Barry has as much knowledge as anyone when he says, "I understand he's a white developer."

Simply put, the sale of a 59-lot site to a developer no one has heard of, in an auction that the city officials I talked to outside of Ward 8 had no idea had occurred, would not happen in Petworth or Cleveland Park or Capitol Hill—or even Anacostia, a struggling part of Ward 8 that has recently received outsized public attention. But it happens in Congress Heights, where residents complain of neglect from the city with good reason.

And this is not the only case. The day after the Congress Heights Vistas auction, a 16-unit, four-storefront, 18,000-square-foot property on the neighborhoodÕs main drag, Martin Luther King Jr. Avenue, was scheduled to be auctioned. I was unable to determine how much was paid for it, who bought it, or even if the auction took place.

Last week, Mayor Vince Gray announced a $187 million investment in affordable housing, and one of the properties he plans to rehabilitate is a 20-building, 266-apartment complex just north of Congress Heights, the aptly named Parkway Overlook, which has sat vacant and overlooked for more than six years. The behemoth of a property received practically no attention from the city government or the press until a Washington City Paper story and a mayoral visit at the behest of a local ministry this summer.

To be clear, the Congress Heights Vistas is private property, and the city has no direct role to play in its planning or construction. Then again, for another private development, the Howard Town Center on Georgia Avenue NW, the D.C. Council approved an $11 million tax abatement last year even though D.C.'s chief financial officer said it wasn't needed. Clearly, the city doesn't mind lending a hand when so-called priority corridors are involved.

But when it comes to out-of-the-way places like Congress Heights, a huge site can remain vacant for years, and then be sold to a largely unknown bidder, all without attracting attention from city officials or top developers. And so while large swaths of the city are carefully planned to include a mix of uses and incomes, Congress Heights continues to accumulate a combination of cookie-cutter low-income apartment buildings and cookie-cutter suburban-style townhouses—where it gets any development at all.

Congress Heights residents are used to feeling neglected. "The fact that that property continues to fly under the radar is not shocking to me," says Nikki Peele, who's lived in Congress Heights for the past six years and writes the Congress Heights on the Rise blog, "because for a lot of people in the city, Ward 8 as a whole continues to fly under the radar."

"Development of vacant land in Ward 8 is very difficult," says Barry. "It took 25 years to get the Giant," referring to the store on Alabama Avenue SE that is the only supermarket in the ward.

"Part of the problem is that a number of developers don't think we have much spendable income," Barry continues. "And we don't. We've got about a $28,000 average income." (The median income for workers in the ZIP code that includes Congress Heights is $27,227, according to 2011 data from the Census Bureau; the per capita income there, including people who don't work, is $17,608.)

How to break this cycle remains a point of debate. Barry looks to the fact that three-quarters of his constituents are renters and argues that Ward 8 needs to focus exclusively on homeownership. Peele thinks the neighborhood needs to attract more middle-income professionals in order to lure retailers, and laments that so much affordable housing is being built in and around Congress Heights.

We don't know, of course, what type of housing Black plans to create at the Congress Heights Vistas. But in depressed housing markets like Congress Heights, affordable housing projects are often more viable for developers because they come with tax credits.

Other potential bidders had concrete plans for the site. The nonprofit Anacostia Economic Development Corporation, in partnership with the Ward 8-based Washington Business Group, was hoping to build an energy-efficient affordable housing complex as a demonstration of how green building can reduce costs for low-income residents, according to AEDC president Stan Jackson. But the bidding quickly rose beyond the team's means.

"Even in our stretch thinking, we were comfortable at about 3 [million], maybe 3.5," says Jackson.

But Black would have bid even higher. After the auction, I asked Moise, his real estate agent, if he and Black had set a maximum bid ahead of time. He nodded. Was $4 million close to it? He shook his head, suppressing a grin.

"We've had our eyes on this for many years," Moise said. "Many, many years. And it finally came to a head."

Black's $4,010,000 bid comes out to less than $68,000 per lot, or $43,000 per unit. It'll take a lot of work and expense to finish building the units and the accompanying infrastructure. But in a city where the average single-family home sells for more than $800,000, Black's price for the Congress Heights Vistas looks like either a steal or a sign of just how far Congress Heights is lagging behind most of the city. Or both.

Moise says he has no idea what Black's plans are for the site, how he's financing it, or even whether he's operating alone or with a group of investors. The project, with all its significance for the neighborhood, remains a mystery, while any site of comparable size in most of the city would attract instant interest from D.C.Õs heavy-hitting developers, and of course its politicians.

"I think when it comes to D.C.'s understanding of east of the river and Congress Heights, they are more familiar with what is going on half a world away then they are with what's going on across the bridge," says Peele. "I do not feel that my neighborhood is getting remotely the attention it should be getting. I feel like we're an afterthought at best."

Photo by Aaron Wiener

  • Chris hauser

    1. Don't count his money

    2. He still has to settle

    3. The mlking auction didn't achieve it's reserve

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  • Question?

    I just don't get it. Why didn't Gray and DHCD use their NSP funds to purchase these 72 properties and create affordable homes. Please ask them this.

  • BiLL

    Oh whaaa, the city is "ignoring" Congress Heights. It's all about the market -- and right now, the market isn't supporting high demand over there. And who's surprised -- look around. The high concentration of low-income housing forces the average income levels down to such a depressed point that no retailer wants (or can afford) to open there. Barry is right when he says many people don't have "spendable income" in Ward 8. So why would any commercial development want to move into an area that is unable to support it?

    "Affordable" housing is a joke -- all housing is affordable, to people in a particular income bracket. There are haves and have-nots in this world; to pretend otherwise is just foolhardy. Additional "affordable" housing only depresses the average income level even further. Rather than whine about affordable housing, let the market dictate the housing prices. What Ward 8 has going for it is that is affordable to many professionals -- but they don't want to move into an urban waste land. By encouraging development of market-based housing, the income averages will increase -- retail will increase (slowly, but it will), and increased demand for housing will push additional development. With increased development comes the attention of the city government.

    Rather than sit around, whining and lamenting the current status, one would do better by looking at the current economic causes of the situation and work to improve those. And as long as Barry is in office, Ward 8 is going to have a sigma (maybe earned, maybe not) that will leave it stagnant in putrid water.

  • http://urbanplacesandspaces.blogspot.com Richard Layman

    while I might disagree with some of Bill's sentiments, his piece sums up the situation very well. Ignorance/ignoring is a dependent variable. The independent variable is "the market" and market demand for that area. Because it is minimal, and for a variety of other reasons, more reputable organizations (other than WC Smith) aren't interested in working in that area. People aren't clamoring to live there. So it's attractive to bottom feeder type developers.

    OTOH, I agree that the city could step up and get involved in facilitating transactions favoring developers that do a better job. But it would require a level of planning that we don't really do.

  • atty2d

    The neighborhood is going to have a Greek letter?

  • Chris hauser

    By the way, did the houses come with the bid? Or just the lots?

  • DC Landlord

    Typical. The city wasted $11M on a tax abatement for Howard Town Center when that project didn't need any help. Then completely ignored Congress Heights.

    If the city spent even 10% of what they spent on Howard Town Center, they could have assured that the nonprofit AEDC won the bid. That would have resulted in a unique green demonstration project that would be a feather in Congress Height's cap.

    There are other ways the City could have helped if they were paying attention. For example, by helping to secure a federal grant for environmentally friendly construction or securing tax credits.

    Instead, the City will likely ignore anything going on in CH and the developer who has a reputation for ripping off homebuyers with shoddily constructed homes, will likely do the same here. At the very least, the City better be inspecting how this guy finishes constructing the townhouses with a magnifying glass because I bet he knows every trick in the book for cutting corners. It could be years before people realize how badly the homes were constructed, by which point the developer will be long gone.

    There are lots of developers who have shoddily converted apartments to condos EOTR who the city has never caught up with.

  • Hillman

    Not quite sure who we are supposed to be mad at here.

    The auctioneer, for somehow not notifying us all individually in advance of this auction? Perhaps by candy-gram?

    The city, for not caring?

    The non-profit, for not having the resources to bid on and develop this parcel?

    Marion Barry, for hyperbole?

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  • 20 Year Ward 8 Resident

    I hope it's not the same Roger Black who was an agent in another condo development I purchased in 1995. I wished i had the money to invest for the property.

  • Capital City Records Panhandler

    Run tell it. Folks don't even know.

  • Freedc

    I have lived around the corner from this site for over 35 years. I didn't know about the auction and had trouble finding out why construction had stopped on the townhouses. (Since DC did not own the property). I accidentally found out about the auction by seeing an ad in a very expensive and little known newspaper called the Waahington Business Journal. The subscription is pricey and mostly law firms and investors bother.
    This paper has a creepy way of knowing more about Ward 8 and 7 than residents and the government does- but they are strictly business. Oddly, a small park area 1 block from this auction site was completely overhauled by a bunch of (90%) white people a while ago. No signs or advanced notice or calls for volunteers went out to the community. Again, I found out about it when I accidently dropped the Washington Business Journal (I work in a law firm library) and saw the BIG ad listing law firms and large architecture firms that were dontating their services to this event. I saw the ad days before the Saturday event and - literally, walked out of my home, down an alley and there it was.......tons of white people and 1 upscale looking black family- shovelling gravel, trimming branches, building gazebos....etc. They had a picnic and gave out t-shirt to each other. Later, a few black locals (young women and their kids) showed up as if they had been selected and invited.It was all so weird and had nothing to do with the real community. The whites who came looked at me like I dropped out from Mars. They had nothing for me to do. It was all very orchestrated anbd doled out to their people. It was all a social event for the legal and architectural community and some la-dee-da eco-charity that had young, white, architecter graduates "re-imagining" space in under served Congress Heights and (to a lesser degree) historic Congress Heights.
    In both cases (the auction and the Park redo) I told as many people as I could- but it was too late to really get the word out.
    A week AFTER the park redo, the same paper still had an ad announcing the park redo - with list of all the generous volunteer companies. Congress Heights STILL didn;t knwo what was going on. It was just another weekend with waves of whites coming thru, eyeing the place, walking in groups, parking EVERYWHERE and looking at us like they are scared.....then leaving.

  • freedc

    BTW- Bill's typical comment needs to be addressed.
    Whenever you are talking about a mostly black and/or low income area being neglected and underserved- someone like Bill posts "waaaa...stop whining" and then some bit of nonsense about free markets and "maybe if you....maybe if those people..."
    It should be noted that Marion Barry is also council person for Anacostia. This area is by the water, full of historic houses and NOW, just across a short, stylish, ramp connecting it to the Navy Yard and Capitol Hill (areas popular with whites and gentrifiers).
    If people can completely overlook Marion Barry to cycle and roller blade their way into Anacostia- they can do the same for Congress Heights.

  • Typical DC BS

    @freedc: Nice racist commenting. And you wonder why folks look oddly at you? Maybe it's YOU that has the problem.

  • Really?

    Billy Bob needs to have two seats! If you haven't been reading the tea leaves for the last couple of years it's only a matter of time before S.E. (excluding Cap Hill) will see changes. Just the fact (i.e. market) that there isn't enough land left in the city. Second, I think that folks should confuse and interchange the words affordable housing, low-income and workforce housing . They are very different things. Folks like Billy believe that affordable equals low-income. $300k in this city has become affordable housing.

    Lastly, I find it laughable when we give tax breaks, credits etc. to business that really don't need it but, we make a big stink with helping middle to low class families stay in the city. A city isn't a planned community and should be made to be as diverse economically and ethically has possible. Billy did you read the NY Times article on San Fran and the issue with letting the market dictate? If you haven’t I suggest that you google it. San Fran issues sound very similar to what’s happening in the District.

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  • Darla

    @ 20 year ward 8 resident - you better believe it's the same one and you can also believe that once that shady project is finished a lot of folks will be wishing they never touched that crap. Just like the poor residents up at Wilburn Mews. Those poor houses had so many corners cut that the city know about that it was disgusting that the city would even let Carey Winston sell those homes. Wonder how much of a kick back everyone received on that deal. I bet the economy would be a lot better off if not for all the greasing of pockets in governments as well as private industries. GOD BLESS anyone that has to buy whatever is to be finished up on that lot.

  • Darla

    @ Free DC can't see why you missed all those big signs outside that property about the auction and the number to call. I don't even live in the area but I've seen the auction sign when driving by. Still I see another bad deal going down for this poor area again.

  • Charles
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