(Washington, DC) Mayor Adrian M. Fenty announced on Tuesday that the District has reached an agreement with Hoffman-Struever Waterfront LLC to transform 16 acres along the Washington Channel into a world-class urban waterfront that will attract local, regional and international visitors alike.
“This project has been promised to the residents of Southwest and the rest of the District for years,” said Mayor Fenty. “I am proud to say we’ve reached a true milestone today that will make this project a reality.”
The Fenty Administration sent legislation to the DC Council seeking authority to dispose of the site to the Hoffman-Struever team and provide up to $200 million in Tax Increment Financing (TIF) and Payment-In-Lieu-of-Taxes (PILOT) financing to pay for public parks, infrastructure, build new public piers and rebuild the bulkhead. The financing, which will be repaid by future sales and property taxes generated by the site, represents about 18 percent of the $1.1 billion project cost.
A fiscal impact analysis of the project estimates the site will generate about $32 million in tax revenue each year, about $27 million more than what the site is currently producing.
The project is going to create about 2,880 new jobs, about 100 new businesses, and provide homes for 1,100 new residents. It will include five new public parks, a half-mile promenade, bike trails and the renovation of Washington’s historic fish market.
“We’ve studied waterfronts all over the world,” said Monty Hoffman, of PN Hoffman, which is leading the development team. “We’ve reached out and forged working relationships and agreements with existing leaseholders. We’ve conducted over 100 meetings with regulatory agencies and surrounding stake holders. And we’ve really just begun the process of creating a ‘world class’ waterfront.”
The current development plan for the site* calls for 767 units of housing, both condos and apartments, including 231 affordable units. The plans also call for 400,000 square feet of office space, 280,000 square feet of retail space, 476,000 square feet of hotel space and 150,000 square feet of cultural space. Nine buildings will be built to LEED-Silver green building standards.
Should the DC Council approve both pieces of legislation this spring, the project is scheduled to begin construction early 2010, with construction of Phase I to come online in 2014.
- Jobs. This project is projected to generate almost 2,900 new permanent jobs and 3,000 new construction jobs.
- New Business. The project will bring between 90 and 100 businesses to the neighborhood, while there are currently only nine businesses in the development area right now.
- District Contribution. The District will contribute approximately $200 million in Tax Increment Financing (TIF) and Payment-In-Lieu-of-Taxes (PILOT) financing, or about 18 percent of the total project cost to help cover the cost of new parks, piers, a refurbished bulkhead and infrastructure associated with the project including the closing of Water Street, SW. However, the District anticipates a $27 million increase in new taxes each year generated by the project, which greatly off-sets the cost of the financing.
- Affordable Housing. At least 30 percent of all housing built on the site will be made affordable for residents earning no more than either 30 percent or 60 percent of the area’s median income.
- CBE Commitment. At least 35 percent of development and operations contracts will go to Certified Business Enterprises (CBE) contractors. At least 20 percent of the equity participation and ownership of the Hoffman-Struever Waterfront team will be CBE partners.
- Local Ownership. Seventy percent of the total ownership of the Hoffman-Struever Waterfront team is by DC-based developers (this figure includes the 20 percent CBE partner ownership).
- First Source Commitment. District residents will be given priority for at least 51 percent of all new jobs created in relation to the project.
- Open Space. The project will include five new parks, new public piers and promenades and the expansion and renovation of the existing fish market.
- The Development Team. The Hoffman-Struever Waterfront team is lead by PN Hoffman, a District-based development company, and includes: Struever Bros. Eccles & Rouse, a Baltimore-based developer that has built much of Baltimore’s waterfront, as well as other major waterfront projects along the Eastern seaboard; McCormack Baron Salazar; ER Bacon Development; Acresh; Gotham Development; City Partners; and Triden Development.