(Washington, DC) – Mayor Adrian M. Fenty announced Monday that the District has reached a deal with Hines | Archstone to lease the so-called B parcel to the development team who has agreed to build a Four-star, 400-room high-end hotel and 100,000 square feet of additional retail space at the 10-acre downtown site. Hines | Archstone also unveiled the entire project’s branding and new name: CityCenter DC.
"It is time we start calling this place what it is, our City Center,” said Mayor Fenty. “CityCenter DC is going to be a true retail and entertainment destination – the heart and soul of our dynamic new downtown.”
Hines | Archstone is the master developer for an $850 million mixed-use project that spans roughly six acres along the southern half of the 10-acre site. The B parcel, which is about 53,000 square feet, had been considered as potential site for a new central library. But under the terms of its development agreement with the District, Hines | Archstone had the first right of refusal to lease the B parcel from the District if the city chose not to locate a library on the site. Under the terms of the new agreement, Hines | Archstone will lease the B parcel for 99 years and the District will have the right to approve any retail or hotel tenants for the site.
Late last year, the District also completed a land swap with developer Kingdon Gould III, which gave Gould the parcel on the Northeast corner of the site. He is preceding with his own development plans, but any development must be consistent with the entire site’s master plan.
In December, the District and the Hines-led team closed on a deal for the southern parcels. The team is expected to break ground on the site by January 2009. Located between New York Avenue and 9th, H and 11th streets in downtown, the project will deliver a pedestrian-friendly neighborhood with more than 350,000 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 a 400-room high-end hotel and parks and entertainment areas – a combination that will make the site a live/work/play environment unlike any other in DC. 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.
While the District is still determining the economic impact of the B parcel deal, the remainder of the site is expected to generate significant community benefits including:
- 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.