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The Arts at 5th & I “super-development” (Rendering: Shalom Baranes and Associates)

Despite recession-related obstacles in the every facet of the development market, the Donohoe Development Company’s ambitious Arts at 5th & I mixed-use project is still headed towards its projected 2010 groundbreaking – and could possibly be extending even further into the surrounding Mount Vernon Triangle neighborhood.

The developer is currently in talks with the owners of Louis’ Rogue, a long-running strip club at 476 K St. NW that abuts Donohoe’s site at the corner of Fifth and I streets NW. Since the Office of the Deputy Mayor for Planning and Economic Development (DMPED) accepted the Donohoe-led development team’s $7 million bid for the DC-owned vacant parcel in September of last year, the company has not been shy about their intention to pursue further development in the immediate area via the acquisition of derelict or underutilized buildings.

“There is a parking lot and several vacant storefronts [that we are interested in],” said Jad Donohoe, development director of the Donohoe Companies. “We’re still in close conversations with the Fifth Street owners, and we hope to have some good news to report on that in the coming weeks.”

Originally, the Donohoe Companies had intended for the entire Arts at 5th & I development – including a 260-room luxury ME hotel by Spanish hotelier Melia; 166 new rental apartments; a string of retail outlets, including an “urban café”; and the first US location for the London-based Boisdale Jazz Club – to fall within the confines of their empty, 20,600-square-foot corner lot. However, it now appears that the historically protected townhomes that house Louis’ Rogue are being scouted for the site of DC’s soon-to-be newest jazz hotspot.

“It has not yet been acquired, [but we] have been in negotiations for the jazz club directly,” said Robert Holland of the Holland Development – a company that, along with Spectrum Management, Harris Development, and architects Shalom Baranes and Associates, is a member of the Donohoe team. “We are going to try to have the club open within 18 months.”

Brothers George and Anthony Sigalas purchased the site of the Louis’ Rogue for $371,000 in 1983 and continue to operate the club to this day. At the height of the building boom in 2006, The Washington Post estimated that their building at 476 K St. may have been “worth 10 times” that sum. That appraisal, however, was before the real estate bubble burst, and George Sigalas is reportedly “considering” an offer for the property put forth by the Donohoe team. Louis’ Rouge is currently one of only five adult-entertainment venues operating in Northwest Washington.

A ‘Super-Development’
Bill McLeod, executive director of the Mount Vernon Triangle Community Improvement District, an organization that courts development and arranges public safety initiatives for the neighborhood, says that Donohoe’s acquisitions are part of larger strategy of “super-development” that will benefit not only corporate interests, but local residents as well.

“When [the Arts at 5th & I] project was vetted to the public for proposals by the city, I went around the neighborhood and told everyone who either owns or rents that they needed to come to the public meeting for the top five proposals. I didn’t want anyone to be surprised, and many of the property owners came,” said McCleod.

“They knew what was coming down the pike, and once the developer was selected, I said, ‘Here’s the final proposal that’s been selected by the city. You need to sell your building or your empty lot to Donohoe to make a super-development.’ For the most part, we think it worked. … A lot of people have held onto these properties for 20, 30 or 40 years, when things were pretty bleak. Now things are changing for the better. If they can cash out and sell their building or move to another location and pocket some cash, even better.”

Indeed, most of the property owners in Mount Vernon Triangle have seen an unprecedented amount of interest in their neighborhood, which spent decades being primarily known for an inordinate amount of parking lots and prostitution. The area’s biggest success to date, Lowe Enterprise’s $200 million CityVista at Fifth and K streets NW, followed the same “super-development” strategy. Built atop the former site of the DC Wax Museum, the development has not only succeeded in adding neighborhood-serving amenities, such as a new Safeway, Busboys and Poets and Results Gym locations, but 150 new jobs and nearly one thousand new residents to the community as well.

Due to the collapse of the condo market, however, other nearby, residential-centric projects have floundered. The Broadway Management Company’s DuMont Condominium project at 401-425 Massachusetts Ave. NW, for instance, was foreclosed upon in January and remains vacant, though entirely completed.

“The economy has changed development in Washington and around the country. At one point, every lot in [Mount Vernon Triangle] was spoken for – so somebody had bought it, they had a design for it, and they were ready to go. But with financing being on hold and the condo market being overbuilt, no one’s breaking ground,” said McLeod. “We’re hoping that [Donohoe Development], with the city’s help, can break ground before everybody else and set an example for jumpstarting the economy.“

According to DMPED, the Arts at 5th & I project is expected to generate approximately $85 million in tax revenue for the District and create a new, bustling extension of the K Street corridor. It’s a vision that represents a makeover of unprecedented scale for Mount Vernon Triangle. Once completed, Donohoe’s “super-development” will be bookended by CityVista on one side and their own hotel, apartments, café, jazz club and retail outlets – including a bike shop and art gallery – on the other. Strip clubs patrons, however, will have to take their business elsewhere.

Pending DC Council approval of Donohoe’s deal with DMPED and a Historic Preservation Review Board hearing regarding 476 K St. – if and when that transaction is finalized – Jad Donohoe hopes to have definitive plans for Arts at 5th & I in place by this winter.