Washington Post

By Jonathan O'Connell July 16

 

Developers of the District’s Southwest Waterfront successfully convinced operators of a luxury hotel, a slew of restaurants and a 6,000-capacity concert hall to sign on for space in their $1.2 billion project.

What they’ve been missing is an employer willing to relocate its operations there, one with enough workers to generate lunchtime business for the restaurants and create a lively daytime presence on the waterfront boardwalk.

Now the companies behind their project, developer PN Hoffman and Madison Marquette, have that too. The companies convinced the American Psychiatric Association to move its headquarters of about 220 employees to Southwest D.C. from Rosslyn.

The APA will lease 63,000 square feet of office space in the project, called the Wharf, and relocate there in the fall of 2017, when the first phase is set to open.

The developers and D.C. Mayor Muriel E. Bowser (D) announced the deal at a Thursday press conference.

Since last March, when digging began, the waterfront along the Washington Channel has become one of the largest mixed-use construction sites in the country. There are 14 cranes in operation presently and to date some 300,000 cubic yards of dirt have been removed from the site, the equivalent of 30,000 dump trucks full.

The first phase will include 871 residences, three hotels and 20 restaurants plus a concert venue by the operators of the 9:30 Club and public space along the waterfront.

The APA deal represents less than one-fifth of the 445,000 square feet of office space that is under construction already but Monty Hoffman, chief executive of PN Hoffman, said it was an important for all the project’s other elements to have a major employer on the site.

[Related: High-stakes battle ensues over Advisory Board Co. headquarters]

“It’s essential to the environment,” Hoffman said. “The daytime population is important for lunch time activity, for fitness and other retailers that are coming here. The mix of commercial and residential and entertainment is exciting because it means that in the daytime during the week, when office use is most intense, you have all that activity. And then in evening you have the residential activity that’s most intense.”
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There have been signs of an uptick in office leasing in recent months, but much of Washington’s real estate market remains largely flat with some above average vacancy rates. Hoffman and his partners had tried to lure employers including the Graduate School and The Washington Post to relocate to the project.

Dr. Saul Levin, chief executive and medical director of the APA, said the choice was obvious. His organization’s 36,000 members want to have a bigger presence on Capitol Hill in coming years as lawmakers consider mental health reforms, he said.

“We spend a fair amount of time on the Hill obviously, talking about mental health and substance abuse issues for our patients and our members…You want to be close to the legislators or the people who make the decisions on the Hill and as part of the administration,” Levin said.

Having previously served as interim director of the D.C. Department of Health, Levin was also intimately familiar with the District.

“To me it’s one of the most exciting projects. It’s waterfront property. Beautiful views and just waiting for a big development to come in. I really admire the group that came together to do it,” he said.

[Previous: Southwest Waterfront redevelopment set to break ground, but not without concerns]

Levin said officials from Arlington County and Virginia tried to change his mind about the move. The APA was among a number of employers choosing between D.C. and Northern Virginia, led by the Advisory Board Co.

Bowser said Thursday at the announcement that the project both shows the city’s high aspirations for new development and its commitment to affordable housing, as 135 of the project’s housing units will be rented at below market rate rents.

“This is an investment that creates jobs, it creates tax dollars, it creates the story that allows us to attract more investment to our city, and we are so happy about that,” she said.

She said she expects the project to generate $50 million annually in tax revenue.

“That’s important, because as this city grows and prospers, we want to make sure that that prosperity reaches every corner of the District of Columbia,” she said.