Yesterday, CFO Nat Gandhi sent the Mayor a letter apprising him of the situation. The details, if you're into these kinds of things: In order to finance the project, the city floated $43.5 million in tax increment financing bonds. Paying that off requires the construction of a hotel, but at this point, getting the money and completing the designs for the hotel will take at least another 15 months.

"Due to this lag in the commencement of the hotel construction and the uncertainty surrounding the completion of a full hotel deal, the District would need to set aside $1 million in the financial plan annually to cover the potential shortfall in tax revenue available for debt service, beginning in FY 2015," Gandhi writes. "The funds would be required in the event that the hotel is not completed and the projected hotel tax increment is not available to support debt service on the proposed November TIF bond issuance."

Roadside's Armond Spikell says that the city's just being cautious. They do, in fact, have a signed deal for a hotel with not one but two major backers. "It's a cover-themselves letter," he says. "You know, 'we warned you, there's risk.' Is it a significant risk? No."

Spikell has only thinly veiled impatience for how complicated the process has been with the city. "Twenty-five percent of the bond proceeds go to pay teams and teams of lawyers that are on top of lawyers," he said, while praising the Deputy Mayor for Planning and Economic Development for "moving things a lot faster than they moved before."

There's still another big hurdle for one piece of the project, though. To construct the 80 units of senior affordable housing, Roadside had been counting on a $7.5 million loan from the city's Housing Production Trust Fund—which, you may recall, is pretty much empty until deed recordation taxes pick up again. So they're looking at other sources, like low income housing tax credits, to finance the project and begin construction on schedule. There's a strong incentive to do so: Besides the cost of restarting construction later, the city will exact financial penalties for breaking deadlines (which might have been useful for some other projects I could name).

Yeah, that banner's not there anymore. (Lydia DePillis)

It's a frustrating phenomenon: A "groundbreaking" takes place, and the relevant local figures all stand around making speeches and patting themselves on the back. And then...nothing happens. Shaw saw a slew of groundbreakings last summer, and a several projects are under serious construction or renovation, including the Howard Theater, Progression Place, Gibson Plaza, and the Convention Center hotel.

Others, however, have languished. O Street Market, which did its song and dance last September, only closed on its HUD financing late last month, allowing work to commence. A mixed-use building on 9th and P Street, slated to contain a Burmese restaurant, is still a hole in the ground, having applied for its construction permit on April 14th (the Department of Consumer and Regulatory Affairs says they still have some issues to sort out with the District Department of the Environment and DC Water).

The worst offender, though, is Shiloh Baptist Church, which closed down 9th Street on September 12th of last year to celebrate the start of construction on the $2.1 million Wallace Charles Smith Community Services building. They didn't have all their financing locked down, but it was supposed to be ready to start by the end of the year, and promised "suites available mid-2011." Nine months later, the banner has disappeared, no permits have been issued, Church officials haven't returned my calls, and community leaders don't know what's going on. That initial approbation, it seems, was premature.

The problem this creates is confusion, resentment, and cynicism on the part of people living in the area (and, in the case of O Street Market, a political event right before a hotly contested primary). I know that construction delays happen and it's hard to get lots of important people in the same place at the same time, but keeping groundbreakings and ribbon cuttings as close together as possible is better for everyone.

Not much happening. (Image via DCMetrocentric)

Exactly three months ago today, the CityMarket at O mixed-use project kicked off with a big groundbreaking ceremony–long speeches, lots of shovels, big tent, the whole bit. Finally, the long-dormant corner would get new life.

Today, though, it doesn't appear that much is actually happening at the site. No digging or demolition or other telltale signs that construction is actually underway, at least.

They're not behind schedule, says Roadside Development's Susan Linsky. Rather, it's just that sometimes groundbreakings happen well in advance of all the pieces completely falling into place. In this case, they still needed permits from Metro. Plus, part of the project funding is coming from the federal Department of Housing and Urban Development, but all the paperwork wasn't quite  done yet. Linsky explained in an e-mail:

While not highly visible construction, we have been working on soil borings and test pits to obtain WMATA approval for construction on the site and refine the foundation plans. The next steps will be to stabilize the walls of the market building. We are trying to organize the work so as to minimize the time that the Giant store will be closed.

As you may know, we will be receiving HUD 220 financing for the construction of CityMarket. This is a lengthy process that requires in-depth information on the project, including a complete set of construction documents for the site. We have been working with our design and engineering team and advancing our project plans to be able to provide this CD set to HUD as quickly as possible. However, on a complex, urban project such as O Street this process will take several more months. We anticipate that we will close on our HUD financing in late June (although this is a HUD process and we have no control of the closing date). We cannot start excavation until the HUD loan is closed.

Sometimes, construction does start right after groundbreaking, like at the Convention Center Hotel: After the number of years that project sat around waiting for the various parties to come to an agreement, it would be surprising if they weren't ready to go. At O Street Market, you have a groundbreaking in September, and construction nine months later. Nice timing for an election, though!

This week's Dupont Current has more details on the CityMarket at O project, which just received $1 million from D.C. Council emergency legislation.  The funds will be used to pay architectural, engineering and other pre-development costs (with a groundbreaking expected in summer 2010).

The city previously offered to assist with those costs by funneling money from a hike in downtown meter fees. But, according to the story, "mayoral aids refused to release the money until the meter fees were actually collected. The Evans emergency bill was crafted to correct that."

In addition to the emergency legislation's $1 million, the CityMarket at O developers will also receive $1.5 million that was originally intended for the Howard Theatre. And developers are hoping to get more money from the Department of Housing and Urban Development (HUD).