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Capital Business
Posted at 05:40 PM ET, 01/24/2013

Only one developer shows interest in Hill East project

The D.C. government’s plan to breathe new life into development of Hill East, a 67-acre site adjacent to Capitol Hill and RFK Stadium, has attracted interest from just one development team.

A combination of local firms Donatelli Development and Blue Skye Development were the only parties to respond to Mayor Vincent C. Gray’s search for partners interested in building the project’s first phase, which calls for new housing and retail on two vacant lots along 19th Street SE.

Few developer searches in the District — currently one of the country’s hottest apartment markets — return such a slim response. Hill East, often referred to as Reservation 13, offers a choice location immediately adjacent to the Stadium-Armory Metro station and the eastern end of Capitol Hill.

“We’re disappointed that we did not receive more submissions,” said Jose Sousa, spokesman for Victor L. Hoskins, deputy mayor for planning and economic development, in an e-mail. “Our pre-offer conference was well attended and we feel this site has a lot of potential. We’re evaluating the proposal we’ve received and will be moving forward on next steps with the community in the next few weeks.”

Dontaelli and Blue Skye, both based in D.C, are partners on another housing development being built on city land at the intersection of Minnesota Avenue and Benning Road in Northeast. Donatelli built mixed-use apartment projects near Metro stops in Northwest neighborhoods and said he planned something similar for Hill East.

“For us it’s a similar project to U Street as far as the mixed-use component of it — Columbia Heights, Georgia Avenue, Minnesota-Benning. This is sort of what we’ve been doing for the last 10 years plus,” he said.

Gray previously canceled a solicitation for nearly the entire Hill East area that was issued by his predecessor, Adrian M. Fenty, but then languished during the economic collapse and the 2010 election that made Gray mayor. Once in office, Gray considered building a training facility for the Washington Redskins on part of the site.

Council member Tommy Wells (D-Ward 6) said residents of the neighborhood were eager to see progress and that the city may need to provide financial assistance to generate more interest. Not only does the first phase require new sewers and other infrastructure, but the larger Hill East property includes 20 buildings of around 1.3 million square feet, including a drug treatment facility and the D.C. Jail, that require relocating.

“Of course we would have liked to have had more offers so we could choose from folks who are bidding against each other and we could get the best offer for the neighborhood,” Wells said.

Council member Yvette Alexander (D-Ward 7). said she wasn’t sure why there were not more responses. “I haven’t the slightest idea.”

“I am shocked that they are the only ones because that is a hot ticket item. I know a lot of people have called even my office and asked about it,” Alexander said.

Donatelli said many of the companies that bid last time were much busier now. Chris Smith, of William C. Smith & Co., agreed. His company was one of the leading bidders for Hill East project under Fenty but said this time that, “we’ve decided that we’ve just got plenty on our plate.”

Wells said the Donatelli team deserved the chance to present their plans to the community.

“I think there’s an obligation to look at what’s been proposed but I think it’s going to be without the benefit of knowing that it’s the best possible thing for that site,” he said.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

By  |  05:40 PM ET, 01/24/2013

Tags:  Hill East, Vincent C. Gray, Donatelli Development, commercial real estate

 
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