pdf | print

Hill East Waterfront

Almost a year after the Office of the Deputy Mayor for Planning and Economic Development (DMPED) released its short list of potential developers for the 50-acre, government-owned parcel known as Reservation 13, none of four teams vying for the $1.5 billion project have heard any official word on the status of the selection process.  At the same time, no progress appears to have been made on the congressionally mandated land swap that would see the General Services Administration transfer the site, which currently houses the former DC General Hospital and city jail, into the District’s portfolio.

“The silence has been deafening,” quipped Joe Sternlieb, Vice President of Acquisitions for Eastbanc –- one of the four named developers.  “I got a nice congratulatory e-mail from the project manager for Hill East when we won [an unrelated DMPED project], but I don’t think that counts…We had another round of best and final offers that were due in September. DMPED is still working away at it.”

With DMPED’s originally projected first quarter 2009 timeframe for the selection of a master developer having come and gone, questions regarding the viability of yet another large scale District development have begun to swell.  There are no less than four other similarly scaled redevelopment projects ahead of Hill East on DMPED’s to-do list, including the McMillan Sand Filtration Plant in Shaw, continued work on the Southeast Waterfront around Nationals Stadium, a new Southwest Waterfront, and the long bandied about Convention Center hotel and surrounding retail complex. 

Most tellingly, plans for yet another, from-scratch development district at Poplar Point in Ward 8, were scuttled this past January with then Deputy Mayor Neil Albert stating, “[In] this extremely challenging economic environment it is no longer practical…to pursue the deal structure we currently have in place.”

Initially, the 110-acre Poplar Point parcel was to be transferred to the District, along with the Hill East property, under the Federal and District of Columbia Government Real Property Act of 2006.  Sponsored by DC Congresswoman Eleanor Holmes Norton, that piece of legislation intended to free up underutilized federal lands in Washington for the benefit of the District and its residents. 

Nevertheless, Sean Madigan, Director of Communications at DMPED, said by e-mail that there was “no news as of yet” on the selection of a developer for Hill East and that the project offered “lots of assumptions that need to be tested.”  He did not respond to follow-up inquiries as to the status of the land transfer or the ability of the project to move forward in a fragile economic climate.   Similarly, representatives of the GSA and Congresswoman Norton did not return multiple calls pertaining the future of the Hill East property.

Development Teams Remain Optimistic
For their part, the four development teams shortlisted by DMPED last November are remaining optimistic.  Calvin Gladney is a Managing Partner with Mosaic Urban Partners -- one of the corporations that, along with Hunt Development, heads up HDG Waterfront Partners, whose Hill East proposal calls for an entirely green and sustainable development at the site.

“We’re still excited and ready to develop Hill East as we envisioned…It’s easily a ten year project, but in terms of the timing of anything, that remains to be seen,” said Gladney when asked how the project’s delays and the state of the markets could affect HDG’s pitch for a fourth DC waterfront destination.

“There are many large-scale projects still moving forward.  It’s just a matter of how the projects are set-up and we have a strong financial partner.  Yes, we believe that we proposed a financially feasible and viable project even in this marketplace.”

Meanwhile, Eastbanc, the only company to vie for Hill East without several development partners, believes their proposed piecemeal approach to Hill East –- one that allows for leasing and sales to other developers on an ad hoc, non-speculative basis – could result make the project attainable sooner rather than later.

“Our approach is to take the site and immediately begin programming it with interim uses and building infrastructure only.  We’d build the infrastructure from 19th Street back to the water and create development paths that are development-ready.  As we create value in the paths and the market returns, we would sell or lease them back to the marketplace…for immediate use,” said Sterlieb.

“So, if how many ever years from now, there’s demand for a residential, office, civic or institutional building or a healthcare facility, we can say that the road is there, the infrastructure is in place and you can break ground in six months. All you have to do is pull your permits.”

While the economic morass of financing such a large project all at once could indeed the chief concern amongst District higher-ups, an October 2008 presentation to the World Bank by DMPED’s former Chief Operating Officer and the now current Deputy Mayor for Planning and Economic Development, Valerie Santos yields some interesting insights to the department’s planning processes.