D.C. Council Approves 3 Anacostia Development Deals

Washington Business Journal - by Jonathan O’Connell

The D.C. Council approved deals for three real estate projects east of the Anacostia River on Oct. 6, in an effort to continue improving neighborhoods — during the credit crunch that has shut down private construction financing.

The biggest deal is for Bethesda-based Donatelli Development Inc.’s $78 million housing and retail project planned for the corner of Minnesota Avenue and Benning Road NE. The project includes 325 apartments available to people with an income 60 percent or below the area median, 45 market-rate townhomes and retail. Construction could begin in the first half of 2010.

Two other projects in the far eastern end of D.C. are setting the table for the city’s planned redevelopment of dilapidated public housing at Lincoln Heights and Richardson Dwellings.

In one, Denning Development LLC, Urban Matters Development Partners and Beulah Community Improvement Corp. will build 56 new homes on Eastern Avenue and Dix Street NE. The other is a $5.4 million office-retail redevelopment of the abandoned Strand Theater, for which D.C. will foot about 60 percent of the cost.

Donatelli’s development would constitute the first major investment in the Benning commercial corridor in years, but it has drawn criticism from transportation advocates and some residents for not providing a right-of-way that would allow a future road to reduce traffic congestion. Preserving the right-of-way would have cut into the size of the development. However Cheryl Cort, policy director at the Coalition for Smart Growth, a D.C.-based group that advocates for smart growth in the region, said the city ought to have required the right-of-way after contributing 4.85 acres of Metro-accessible land for the project.

“We are deeply disappointed that the city made such a shortsighted decision to give away the parcel without reserving room for this valuable future street connection,” she said. “It’s the city’s own land. Why wouldn’t it better address the long term needs of the community?”

But Councilman Kwame Brown, D-At large and chair of the Economic Development Committee, said residents of Ward 7 — where he lives — wanted to see progress at the intersection. He said Donatelli had agreed to the largest community benefits package he could remember. It includes space for local retailers, internship opportunities for local youth and a partnership with the Ward 7 Arts Collaborative, a nonprofit organization. “The residents of that community that have been waiting for development for 20 years,” Brown said.

D.C. Deputy Mayor Valerie Santos, whose office picked the development teams, issued a statement praising the council passage of the three deals.

“Together they’ll create several hundred jobs, better retail amenities and new housing in downtown Ward 7, Lincoln Heights and Deanwood,” she said.

Brown withdrew a fourth land deal, a $193 million project to build two office buildings and a new fire station in Southwest. Mayor Adrian Fenty picked a five-member team for the project consisting of CityPartners LLC, Potomac Investment Properties LLC, Adams Investment Group, Paramount Development LLC and D.C. Strategy Group LLC.

Brown spokesman Mike Price said the bill was held because the developers did not have signed agreements to hire city-certified small businesses or hire District residents.