Phase II of Transformative Development Project Featuring Walmart and Affordable Housing Gets Underway
Launching Phase II of a transformative $220 million mixed-use, transit-oriented development project in Northeast Washington, A&R Development, the D.C. Housing Authority and Walmart broke ground today for what will become a Walmart Supercenter and a 312-unit apartment building.
Phase I of the project, now complete, is comprised of 380 apartments and townhomes. In Phase II, A&R will deliver a mixed-use town center that includes a LEED-certified apartment building above 20,000 square feet of retail space and a Walmart Supercenter, offering fresh groceries, a pharmacy and an assortment of retail goods.
Prior to the redevelopment initiative near East Capitol and 58th streets, area residents had few, if any, options for food shopping and other types of retail. In partnership with the D.C. Housing Authority, A&R is transforming the so-called food and retail desert by developing a new 40-acre community – Capitol Gateway – that includes affordable for-purchase and for-rent housing, a grocery market, retail space and open green space, as well as easy access to the metro station and East Capitol Street, a gateway thoroughfare for the City.
“One of my top priorities as mayor is to build a pathway to the middle class,” said Mayor Muriel Bowser. “Part of that effort is providing residents with affordable, high-quality housing. But that is only half of the equation, residents also need jobs and retail options in their own neighborhoods. Capitol Gateway Marketplace will help make that goal a reality. I look forward to working with the development community and Ward 7 neighborhoods to ensure this project benefits D.C. residents and working-class families for generations to come.”
“This is a great day not only from Ward 7, but for the entire City of Washington. We are turning this area into one of our city’s premier neighborhoods, one where residents and visitors alike can work, shop, play, make convenient use of mass transit, and enjoy safe streets and high-quality homes. I’ve participated in countless community meetings regarding this effort, and I can tell you that everyone is excited about the future here,” D.C. Councilmember Yvette Alexander said.
“This project required tremendous dedication, unrelenting perseverance and strategic innovation from everyone involved. Through collaboration and commitment, we will soon deliver a community that serves our residents’ needs for housing, retail and food shopping, and jobs. I want to thank all of our partners, including the residents who played an integral role, and my staff for making this possible,” said Adrianne Todman, executive director of the D.C. Housing Authority.
“My company, A&R Development, is dedicated to transforming urban landscapes like this one for the better. We commit our time and resources to large-scale projects such as Capitol Gateway with one objective in mind: to create high-quality homes and communities that better serve the people who live, work, and learn there. We are proud of our contribution, grateful for our partners, and eager for the day when this place is bustling with people on their way to and from work, dinner, the park, the metro or the grocery store,” said Marjorie Rodgers Cheshire, A&R’s President and Chief Operating Officer.
“A new Walmart Supercenter at the Capitol Gateway Marketplace will not only serve as a retail anchor in the area and provide fresh groceries to residents, but will also create 300 jobs, provide opportunities for local contractors and vendors, and encourage investment by other businesses and retailers in this neighborhood,” said Nina Albert, Director, Public Affairs and Government Relations, with Walmart. “We are very appreciative to business and community leaders in Ward 7 for welcoming us and look forward to helping our new neighbors save money and live better.”
“To have a hand in bringing this transformative and anticipated community space to fruition is truly a proud moment for Clark Builders Group. Our team is looking forward to delivering Capitol Gateway Marketplace which will be a cornerstone for this community,” Keith Anderson, Clark Builder’s Group President said.
Media Contacts Information:
- A&R Development, Mark Cheshire, 443-560-1554
- Clark Builders Group, Mike Shenkle, 703-779-5214
- Walmart, Eve Hemsley, 443-878-7360
A&R, with partner The Henson Companies, is leading the redevelopment of the former East Capitol Dwellings/Capitol View Plaza public housing complexes located along East Capitol Street SE, virtually on the District’s border with Prince George’s County. The Capitol Gateway site, a third of a mile from the Capitol Heights Metro station, is owned by the D.C. Housing Authority. Nearly 30,000 vehicles pass by it daily.
The larger Capitol Gateway property is already home to a 151-unit senior housing building and roughly 380 for-sale and rental townhome units. But the biggest projects are still to come.
A&R is finalizing its financing for a 312 affordable unit mixed-use building on the eastern most portion of the property, fronting East Capitol Street east of 58th Street Northeast. Ground is expected to break by April 1 on that nearly $80 million project, which will include 20,000 square feet of ground floor retail.
The sources of funds include $33 million in short-term D.C. Housing Finance Authority bonds, a $13 million long-term D.C. Housing and Community Development loan, a $1.6 million DCHA loan, $29 million in private equity raised through the syndication of low-income housing tax credits and $5.4 million in “deferred developer fee,” according to documents recently submitted to the D.C. Council.
The development team is in the process of pulling permits for its mixed-use building. It is doing the same for the Wal-Mart development site next door.
Within the next six monthly, A&R expects to begin site work on the Wal-Mart pad, which will be turned over to the retailer for construction of a 135,000-square-foot store. A&R executives expect that transfer to occur at roughly the same time ground is broken on the mixed-use building. Construction should be underway on both by next summer.
“This is an important project for DCHA,” said Adrianne Todman, the agency’s executive director. “Not only are we bringing much-needed amenities such as retail and a full-service grocery to this Ward 7 community, but we are also adding more transit-oriented housing.”
The mixed-use Capitol Gateway building is of similar size to Park 7, the largely affordable Donatelli Development that recently delivered at the Minnesota-Benning Metro station, again, in Ward 7. Park 7 includes 370 apartments and 20,000 square feet of retail.
A few miles away from that event, the 8.5 acres (3.4 ha) next to the Rhode Island Avenue–Brentwood Metrorail station was a commuter parking lot; surrounded by declining neighborhoods, it was a bleak place to leave a car and catch a train. Now, just six years later, the site has been transformed into Rhode Island Row, a thriving 274-unit mixed-use community offering affordable, workforce, and market-rate apartments; 70,000 square feet (6,500 sq m) of retail space; and upscale amenities, including outdoor fireplaces, a large outdoor wet bar and grills next to the pool, concierge services, a state-of-the-art fitness center, a green roof patio, and a sleek, thoughtfully appointed wood-and-glass community room with Wi-Fi access, lounging areas, large-screen televisions, a pool table, and an area for entertaining.
However, while all the perks are appealing, perhaps Rhode Island Row’s biggest draw is convenience: the Metro station is just steps away. “I wanted to live here because I can walk across the street and be on the Metro,” says community resident Melanie Clark, who moved into Rhode Island Row from a suburban neighborhood outside Baltimore. “Before [moving in], I did not have the same access to Washington. Living here has changed how I interact with the city. It’s streamlined my life in a way that is fantastic.”
The development—a 2012 winner of a Terwilliger Center’s Jack Kemp Workforce Housing Models of Excellence Award—exemplifies Terwilliger’s vision of mixed-income housing, which he considers the only viable solution to address the shortage of affordable housing near transit and employment hubs. The site, owned by the Washington Metropolitan Area Transit Authority (WMATA), lies less than two miles (3.2 km) from the city’s central business district and only two stops from Union Station, a regional multimodal transportation hub. Its transformation from a parking lot into Rhode Island Row was made possible through a public/private partnership with WMATA and Bethesda, Maryland–based Urban Atlantic, which developed the community in a joint venture with A&R Development, with offices in Baltimore and Washington. Open just over a year, the community is 95 percent occupied; among the residents are D.C. police officers, Metro workers, teachers, and graduate students from area universities.
The approach to the development—from the financing to the amenities—reflects in large part Terwilliger’s imprint on the career of Urban Atlantic president Vicki Davis, who worked at Trammell Crow Residential as a real estate developer in the mid-1980s and now serves on the Terwilliger Center’s advisory board. “Ron was hugely influential,” she says. “He indoctrinated the importance of only doing deals we knew would work and which were risk-adjusted for what we were producing. We also learned about using replicable design to hold down costs and the importance of providing great amenities and services.”
Another lasting impact: during Davis’s years at Trammell Crow Residential, the company developed some mixed-income housing—a relatively new concept at the time. “We learned that people with different incomes can live side by side without any knowledge by anyone that there is any significant difference,” she says.
While Urban Atlantic’s work ranges from the redevelopment of public housing to the development of luxury homes, the firm’s success in developing mixed-income communities (the company’s Capitol Quarter, also in D.C., is another Kemp Award recipient) is a particular source of pride for Davis. “If you understand this business, you can make affordable housing work with the correct capital stack that offsets the expense. Knowing that it can be done is the first step. And, it can be done.”
Rhode Island Row is a 274-unit, mixed-use, transit-oriented development located at the Rhode Island Avenue–Brentwood Metrorail station in northeast Washington, D.C. The project, which also includes 70,000 square feet of ground-level retail space, was developed by RI Station LLC, a joint venture between Urban Atlantic and A&R Development Corporation. The developer worked closely with local government agencies, federal agencies, and community leaders to transform the underused 8.5-acre commuter parking lot into much-needed housing and retail space for residents of Ward 5, a neighborhood that historically has been home to low- and moderate- income residents.
The site, owned by the Washington Metropolitan Area Transit Authority (WMATA), is less than two miles from the city’s central business district and only two stops from Union Station, a multimodal transportation hub for the region. Situated along the region’s oldest and busiest Metrorail line, the Red Line, the project site has long been considered a prime location for housing. Before the Rhode Island Row project, the area was experiencing steady decline and was in need of reinvestment. Despite the proximity to mass transit, the project site and several adjacent parcels were zoned for industrial use, offering little opportunity for new housing. Through strong partnerships and community support, RI Station was able to move the project forward, and even through a planning process that lasted five years, stakeholders remained committed to initiating a positive change to the Ward 5 neighborhood.
Not surprisingly, Rhode Island Row faced many financial challenges due to the recession. At the start of the project in 2008, the transaction was fully financed through tax-exempt bonds and a traditional retail mortgage. When the real estate market imploded, the developer went back to the drawing board and restructured the deal to pair a Federal Housing Administration (FHA) 220 program loan, which allows for mixed-use projects, and New Markets Tax Credit (NMTC) financing. The U.S. Department of Housing and Urban Development (HUD) was the mortgage guarantor for the FHA loan, and the U.S. Treasury Department provided the NMTC financing, which supports commercial development in economically disadvantaged communities. In addition, the District of Columbia helped finance construction of the new multilevel WMATA commuter parking garage with the city’s payment in lieu of taxes (PILOT) program, which provides financing and construction sales tax abatement. The program helped the developer meet the one-to-one replacement requirement for parking spaces in the previous lot.
The target incomes for the units evolved from several years of planning meetings with local stakeholders, including the local Advisory Neighborhood Commission (the elected body of neighborhood representatives), civic associations, and District of Columbia agencies. These stakeholders were concerned that the apartments at Rhode Island Row would be out of reach for Ward 5 residents and that the project would result in gentrification. In response, the developer carefully balanced the minimum rents, and although there are no income restrictions for the 219 workforce units, the units target households earning 80 to 120 percent of the area median income (AMI). An additional 55 units are set aside for households earning 50 percent of AMI.
Rhode Island Row is a well-designed, highly amenitized project that creates a vibrant, affordable, and walkable neighborhood in a previously underused site. Rhode Island Row also demonstrates the power of a developer working closely with community stakeholders to create a community that meets residents’ desires while bringing much-needed private investment to the neighborhood.
A rendering of what a redeveloped Barry Farm might look like. (Courtesy of D.C. Housing Authority) The board of the D.C. Housing Authority has selected a private sector development team to overhaul Barry Farm, the troubled public housing community in Southeast near Anacostia.
In a unanimous vote Wednesday, the board selected Preservation of Affordable Housing, a non-profit developer that focuses on housing for low- and moderate-income residents, and A&R Development, based in Baltimore. The developers are tasked with what may be one of the most difficult redevelopment projects in the city, overhauling the violence- and drug-plagued garden style apartment community into a mixed-income neighborhood that also includes new public housing units for Barry Farm’s existing residents.
Located in the poorest of the District’s eight wards, Barry Farm plays host to the George Goodman Basketball League in the summer, which has attracted big-name NBA stars like former Washington Wizard Gilbert Arenas. But in 2005, violence and blight at Barry Farm prompted the District government under then-mayor Anthony Williams to include it in the city’s New Communities initiative, in which the District aimed to redevelop some of the city’s most troubled public housing projects.
Seven years later little work has been completed. After countless community meetings with District officials, some residents testified before the D.C. Council in February that they were being asked to stay in units where there were rat and insect infestations. Others say they are afraid of moving out of their homes and being displaced. The plans prompted the filming of a documentary, “Barry Farm: Past and Present,” that chronicles the neighborhood’s history.
Both Preservation of Affordable Housing (POAH) and A&R have experience in the District, with POAH having developed the Garfield Hill Apartments and A&R serving as a partner on multiple other projects, including one on East Capitol Street that is slated to include a Wal-Mart. Along with its development partners, the housing authority plans to apply next year for a Choice Neighborhoods Implementation Grant from the U.S. Department of Housing and Urban Development to help fund the work.
David S. Brown Enterprises Ltd. wants to build a 29-story mixed-use project at 300 W. Baltimore St., a development that Chairman Howard S. Brown said will help revitalize the neighborhood surrounding the University of Maryland, Baltimore. The $70 million project, first reported by the Business Journal in August, is slated to include 100,000 square feet of office space, 224 apartments and first-floor retail that will likely be occupied by a drug store, Brown said.
When Brown disclosed his plans for the project, he said he would wait until he had pre-leased half of the 100,000-square-foot office space before moving ahead. Now, though, Brown said he is beginning the city’s approval process without any signed leases and will evaluate the market before beginning construction. Brown said he has confidence in the project because of the university’s presence. “I think the west side is really driven more by the university, the biotech parks, the medical school — that’s the submarket,” Brown said. “There’s demand down there for sure.”
The project will first go before the Urban Design and Architecture Review Panel, Brown said. UDARP has not yet released agendas for May. The upper half of the building will include 16 stories of apartments, Brown said. The 100,000 square feet of office space will sit below the apartments, occupying four floors, and nine floors of parking with 424 spaces will sit below that.
A rendering released Monday shows the base of the building, including the garage and retail, will have a brick exterior. The exterior of the upper floors will be glass. Brown has been a key player in the revitalization of the western section of downtown, even as efforts to redevelop the area surrounding the Hippodrome Theatre have stalled since the historic venue was reopened in 2004. In March, the fast-casual restaurant Nando Peri Peri opened in the 400 block of West Baltimore Street, joining Panera Bread, PNC Bank, Pita Pit, Samuelson’s Diamonds and State Employees’ Credit Union in property redeveloped by Brown.
Property acquisitions on the 300 block of West Baltimore have occurred over the last five years, Brown said, and the last parcel — a 93-year-old, 23,000-square-foot office and retail building at 327 W. Baltimore St. — was purchased for $328,000 in February. Several vacant lots, a small office building and an aging parking garage stand on the site now. The building and the parking garage will be demolished to make way for the new project, Brown said.
Editor’s note: This story has been updated to reflect the latest project cost estimate, as well as the latest number of stories, apartment units and parking spaces planned for the project, as provided by Lynn E. Abeshouse, a managing principal for David S. Brown partner Abeshouse Partners.
On April 8th, the D.C. Zoning Commission held a preliminary hearing on the Capitol Gateway Marketplace planned unit development (PUD), a significant public-private partnership in the northeast neighborhood of Capitol View. The approximately 488,000-square-foot mixed-use project will be anchored by a Wal-Mart superstore, one of the retail giant’s six planned locations in the city.
The city-owned 12-acre site will also deliver a 283-unit residential building with ground-floor retail, a 21,900-square-foot office building, and a sit-down restaurant to an emerging neighborhood bereft of retail options and employment opportunities. The proposed project was previously approved in 2002 as the commercial component of the 40-acre Capitol Gateway Estates PUD, funded in part by the HOPE VI program to replace the notorious East Capitol Dwellings.
The original plans called for a suburban-style retail center, but were scuttled when the prospective grocery store tenant and the city could not agree upon the size and location of the parking field. The residential community at the Capitol Gateway Estates, however, was able to go forward. Completed in 2009, the infusion of 379 mixed-income and senior housing units made the retail component “more timely,” according to the development team, thus helping to secure a full-service Wal-Mart that includes a grocery store.
The proposed shopping and dining options represent a significant addition of retail services to Ward 7, amenities that east-of-the-river neighborhoods have historically lacked. The project area consists of two vacant D.C. Housing Authority (DCHA) parcels that straddle 58th Street, N.E., along the north frontage of East Capitol Street: the 10.6-acre primary parcel to the east with the proposed Wal-Mart, apartments, and office building, and a 1.4-acre parcel to the west that will feature the sit-down restaurant.
The site is one block west of the Capitol Heights Metrorail station and the D.C./Maryland line. The three-phase project is being developed jointly by the DCHA, which owns the site, and A&R Development. The first-phase Wal-Mart building will anchor the primary parcel. The master plan shows the 135,000-square-foot urban superstore fronting the northeast corner of 58th and East Capitol streets, presenting a significant departure from the set-back, parking-dominated footprint of most retail superstores.
The site’s steep grade change, rising 48 feet from east to west, allows the designer to stash 337 parking spaces below the store in structured parking. The proposed façade – clad in brick and Trespa panels, with a multi-story glass entryway – bears little resemblance to the company’s ubiquitous blue boxes and was positively received by the commission. According to the submitted phasing plan, the developer anticipates a construction start of no later than December 2016.
East of the Wal-Mart, the proposed 283-unit residential building will be the first structure visible upon entering the city along East Capitol Street. Plans show four stories of apartments, 10-percent of which will be reserved for those making 50- to 80-percent of Area Median Income (AMI), rising above a two-story parking podium, which is wrapped on its southern frontage with approximately 24,000 square feet of ground-floor retail. The construction of the second phase of the PUD, which includes the apartment building and an 8,800-square-foot sit-down restaurant on the west parcel, is scheduled to start no later than December 2017.
The final phase will include the 21,900-square-foot office building. Situated behind the apartments, the building, referred to as a “small jewelbox” by the applicant, features two stories of office space perched over a parking lot. The PUD and associated rezoning request (to C-2-A district) requires relief from a number of zoning requirements. The project will require a special exception for additional retail parking and relief from loading, building height, and roof structure requirements. The public amenity package totals $750,000, and includes two public plazas, a Capital Bikeshare facility, and outreach programs that include adult education, scholarship programs, and science funding.
*Excerpts reprinted with permission from the www.virginianewsletters.com – The D.C. Newsletter