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District, Hines Archstone-Smith Close Deal on Old Convention Center Site

Monday, December 17, 2007
Press Advisory for Immediate Release

(Washington, DC) Mayor Adrian M. Fenty announced Monday that the District has closed on its deal with Hines | Archstone-Smith, making way for an $850 million retail, residential and office project on the site of the former Washington Convention Center.

"This project is going to be a true city center—our downtown retail anchor—befitting a world-class city,” Mayor Fenty said. “We are creating a place, designed by one of the world’s most pre-eminent architects, which will complete the recent transformation of our downtown.”

The Hines | Archstone-Smith team expects to break ground on the site by January 2009. Located on a 10-acre parcel bounded by New York Avenue and 9th, H and 11th streets in downtown, the project will create a pedestrian-friendly neighborhood with 250,000 square feet of retail; more than 670 apartment and condos including at least 134 units of affordable units; 465,000 square feet of office space and parks and entertainment areas—a combination that will make the site a live/work/play environment unlike any other in DC.

As part of closing the land deal, Fenty also announced today that the District and development team have reached several other important milestones including the approval of the schematic design, the completion of zoning approvals, as well as agreement on the financial details of the land disposition.

“This is a tremendous milestone for the city and the Hines | Archstone-Smith team,” said Hines Senior Vice President William B. Alsup, III. “With the closing of the legal documentation with the city and approval of the schematic design, we will continue to work collaboratively with the city and its agencies to complete the detailed plans and specifications and secure the necessary building permits to enable us to begin construction by this time next year.”

The design effort has been led by London-based Foster + Partners, the internationally acclaimed architecture studio headed by Lord Norman Foster; District-based Shalom Baranes Associates and Lee + Papa and Associates; and Gustafson Guthrie Nichol of Seattle.

The District awarded Hines | Archstone-Smith development rights to the site in June 2005, after the team prevailed in a competitive selection process. The master-plan was approved in October 2006, at which time the schematic design phase of the project began. The team is working to finalize design, bidding and permitting by November 2008. It is anticipated that a 35-month construction period will begin in January 2009, with initial occupancy in July 2011.

“This long-awaited project will set new precedents and rival the best live, work, shop and play urban mixed-use developments the nation has seen to date,” said Ken Miller, senior vice president, Archstone-Smith. “This development will further the transformation of our nation’s capital into one of the most thriving, dynamic and culturally rich cities in America.”

The office buildings will strive for the Gold or Platinum rating from the US Green Building Council’s LEED certification system. The residential buildings are expected to achieve a Silver rating. The entire development has been accepted into USGBC’s pilot program for the LEED Neighborhood Development (LEED-ND) certification.

District Benefits

  • Jobs. This project is projected to generate 3,000 development-related jobs and 2,500 direct permanent jobs.
  • Fiscal Benefits. The project is expected to generate more than $32 million a year in annual direct tax revenues.
  • Value for the Site. The District is receiving more than $200 million in consideration for the land as part of a long-term land lease, including: a minimum of $28.5 million in lease payments, $48 million in payments to construct streets, parks, a plaza and other public amenities, $55 million to provide affordable housing on site, and $14 million in payments to promote public space programming. If the project exceeds financial expectations, the District will receive 25 percent of excess profit.
  • Affordable Housing. 20 percent of all housing units will be affordable at a range of incomes for buyers and renters earning 30 percent of the Area Median Income (AMI); 60 percent of AMI, and 80 percent of AMI.
  • CBE Commitment. The development will create significant opportunities for Certified Business Entities (CBE). CBEs will also own 20 percent of developer equity. At least 35 percent of construction and operations contracts will go to CBE contractors. Five CBEs are equity partners on this project and 33 CBEs have been or currently are serving as consultants.
  • First Source Commitment. District residents will be given priority for at least 51 percent of all new jobs created in relation to the project.
  • Unique Retailers. There is a developer commitment that 30 percent of retail space will be devoted to merchants with six or fewer stores in the United States. Retail emphasis will focus on a broad range of restaurants and cafes, grocery/market foods, entertainment and performance venues, fashion and specialty retail, and neighborhood services.
  • Open Space. In addition to two newly constructed streets through the site, an additional 1.5 acres of public open space will be constructed. There is a developer commitment to make a $1.5 million annual payment to promote the programming of the open space for markets, festivals and events. A Common Area Association will be created to manage programming and maintenance of the space.